Preparatory Committee for the

High-level International

 Intergovernmental Event on

 Financing for Development

3^rd Meeting (AM)

NEW INTERNATIONAL FINANCIAL SYSTEM REQUIRED TO MEET NEEDS

OF DEVELOPING COUNTRIES, PREPARATORY COMMITTEE TOLD

United States Warns against Changing Mandates of IMF and World Bank

A new international financial system was required to meet the unique needs of developing countries, as current mechanisms were inadequate, a number of countries stated this morning as the Preparatory Committee for the High-level International Intergovernmental Event on Financing for Development continued its discussions on the agenda for the conference scheduled for early next year.

The representative of Malaysia said the present system was ill-equipped to deal effectively with the complex problems and challenges of globalization.  The East Asian financial crisis exposed major flaws in macroeconomic policies and proved that even countries with sound economic fundamentals were vulnerable to shocks in the international financial markets.  Efforts to ensure orderly and stable international financial conditions must also include measures for substantive reform of international financial institutions. 

Noting that the United Nations had benefited from the expertise of the Bretton Woods institutions and the World Trade Organization in preparing for the High-level Event, the representative of the United States said the mandates of those institutions should be respected.  He was concerned that the development financing process might be used as a vehicle for the United Nations to interfere in their governance and decision-making mechanisms.  Any such attempt, if made, would seriously undermine not only the credibility of those institutions, but also the United Nations work in development generally.  The United States would oppose any such attempt, he asserted.

There was a lack of representation on the part of developing countries in the governance of those institutions, the representative of Cambodia said.  He believed that it was vitally important for the Preparatory Committee to seriously consider that issue and come up with meaningful recommendations to redress those shortcomings. 

The representative of South Africa said it was necessary for developing countries to participate in the rules-making process.  The rules should take into account the specific needs of developing countries, rather than take a “one size

3^rd Meeting (AM)

fits all” approach.  Flows of foreign direct investment into developing countries were urgently needed.  Structural poverty reduction strategies should replace structural adjustment programmes to meet the needs of developing countries, she said.

The Director of the Bureau for Resources and Strategic Partnerships of the United Nations Development Programme (UNDP), Bruce Jenks, said the UNDP had launched a major initiative with the Government of the Netherlands, together with other partners, on reforming technical cooperation.  The initiative followed a study completed in 1993 on rethinking technical cooperation.  The concept of global public goods, of which UNDP was among the pioneers, could be a very important complementary approach to official development assistance (ODA), he said.

A representative of the Food and Agriculture Organization (FAO), Frederick Weibgen said the Preparatory Committee should work to promote the critical role of agriculture in development, as well as the need to increase both national and international investment in the agricultural sector.  The FAO was particularly interested to see that the commitment, made at the 1996 World Food Summit, to halve the number of the world’s undernourished by 2015 was not thwarted by lack of resources.

Also speaking this afternoon were the representatives of Bhutan; Russian Federation; Morocco; Lao People’s Republic, on behalf of the Group of Landlocked Developing Countries; Viet Nam; Denmark; the Former Yugoslav Republic of Macedonia; Cuba; Egypt; Ghana; Bangladesh and Indonesia.

The Committee will meet again this afternoon at 3 p.m. to conclude its general debate and hold an interactive dialogue on mobilizing domestic financial resources.

Committee Work Programme

The Preparatory Committee for the High-level International Intergovernmental Event on Financing for Development met this morning to continue consideration and review of the inputs to the substantive preparatory process and the High-level Event scheduled for early next year.  (For background, see Press Releases DEV/2283 issued 9 February and DEV/2285 of 12 February.)

Statements

BRUCE JENKS, Director, Bureau for Resources and Strategic Partnerships, United Nations Development Programme (UNDP), said the financing for development process was an opportunity to give expression to the commitments made by world leaders at the Millennium Summit.  An important recommendation was the launching of a five-year campaign to reach the millennium development goals.  The UNDP, working closely with its United Nations partners, stood ready to fully support the proposal.

Globalization must ensure that, both at the national and international levels, the choices available to nations and individuals were increased, not narrowed, he said.  In a globalizing world it was vital that countries nurture successful indigenous enterprise.  A flourishing civil society, including a vibrant home-grown private sector, was critical to the construction of an inclusive vision of globalization, he said.

The measures for strengthening the enabling environment, outlined in the Secretary-General’s report, constituted a strong case for the renewed importance of technical cooperation and investment in capacity-building.  Those must be understood, particularly by finance ministers, as hard investments with a high rate of return.  Moreover, they were critical in ensuring full country ownership.  Globalization must open new opportunities to all, rather than narrow real life choices.  The United Nations had a vital role to play “to ensure that globalization became a positive force for all the world’s people”.

The UNDP was committed to pursuing efforts to enhance the effectiveness of official development assistance (ODA).  It had launched a major initiative with the Government of the Netherlands, together with other partners, on reforming technical cooperation.  The initiative followed a 1993 study on rethinking technical cooperation.  The concept of global public goods, of which UNDP was among the pioneers, could be a very important complementary approach to ODA, he said.

FREDERICK WEIBGEN, of the Food and Agriculture Organization (FAO), speaking on behalf of Jacques Diouf, the organization’s Director-General, said the Committee should work to promote the critical role of agriculture in development, as well as the need to increase both national and international investment in the agricultural sector.  In a recent letter, the Director-General had expressed concern to the Committee’s co-chairs at the widening gap between the commitments made in international meetings and the resources subsequently made available to fulfil those commitments.  The FAO was particularly interested to see that the commitment made at the 1996 World Food Summit to halve the number of the world’s undernourished by 2015 was not thwarted by lack of resources.

Unfortunately, he continued, reports had shown that resource constraints were still holding back progress.  In November, the FAO would host the follow-up to the Summit with the hope of accelerating the fight against hunger.  That meeting will examine practical ways and means of overcoming resource constraints and the problem of political priorities.  In that context, the organization had been closely following the Committee’s work.  He hoped the Committee would be able to deepen its consideration of financing for the agriculture sector.  That would be essential, given the actual low level of current financing in relation to the funds needed to achieve the international development goals.

OM PRADHAN (Bhutan) said developing countries must identify and work towards efficient mobilization of domestic resources.  The existing base of a national economy must be expanded, so that increasing resources could be mobilized from within the country.  A growing economy meant an expanding base for resource mobilization.  Developing countries needed external financial and technical resources, and a favourable international trading regime, to establish an economic base that would enhance the domestic mobilization of finance.

He also said more emphasis should be placed on external financing for development, particularly in the case of low-income countries.  Concessional financing, through an international development association facility, would be required.  He said foreign direct investment was also vital, but only for specific commercial projects.

YURI ISAKOV (Russian Federation) said his country attached importance to the contributions of the Bretton Woods institutions, the World Trade Organization (WTO) and other relevant institutions in the preparatory process and in the High-level forum itself.  Those institutions should indicate as soon as possible the form of their participation.  Russia also supported the participation of civil society organizations, non-governmental organizations and the private sector in both processes.

The preliminary agenda of the High-level Event approved by the General Assembly had important practical meaning for the Russian Federation, he said.  The agenda items included mobilizing domestic and international resources for development, trade, increasing international financial cooperation, debt and enhancing the coherence and consistency of international monetary, financial and trading systems.  He hoped decisions on the agenda would reflect the interests of all, including the developing countries and States with economies in transition.

He advocated dialogue with the international financial institutions, donors, civil society and the private sector in the search for solutions to the problems related to financing for development. 

He also said the Secretary-General’s report was a very good basis for the work of the Preparatory Committee.  He expressed regret about the delay in its publication.

AHMED AMAZIANE (Morocco) noted that the Preparatory Committee’s session was taking place in an extremely important time, following the Millennium Summit and its call for the eradication of poverty by 2015.  No effort should be spared by the international community to meet that goal.  The level of participation at next year’s Event should be very high.

Turning to specific issues in the proposed agenda, he said developing countries should be able to adopt measures to protect their economies.  Equitable rules in the area of international trade should be developed.  There was also need for solidarity between countries of the North and South, and sound policies should be adopted by developing countries based, among other things, on good governance and progressive taxation.  Political will was also necessary.

In a globalizing world, he said national efforts required support from a good world environment.  It was not right that movement of capital went most to developed countries.  There was need for consensus on foreign direct investment in developing countries.  He noted the decline of development assistance and urged reversal of the trend, adding that a solution should be found for the problem.

Morocco believed that middle-income countries should be able to enjoy some relief in their foreign debt.  Trade must be liberalized for exports of developing countries to enter markets of developed nations.  Developing countries required technology transfers for their development.  He said difficult but necessary concessions would be required of rich countries, whether in the North or South.

ALOUNKEO KITTIKHOUN (Lao People’s Democratic Republic), speaking on behalf of the Group of Landlocked Developing Countries, said while his delegation supported the statement made on behalf of the "Group of 77" developing countries, there were some crucial issues that reflected the unique concerns of landlocked developing countries.  Due to the geographic isolation of the Group’s member States, import bills continued to increase, and exports became less and less competitive.  Unfortunately, it appeared those countries would continue to suffer from high transit and transport costs of goods.  Indeed, import and export costs for landlocked developing countries were often more than 10 per cent higher than for other regions of the world.  In light of those and other issues, the particular problems and needs of the landlocked developing countries should be addressed so that those countries might be successfully integrated into the world economy.

He said that ODA was a significant aid to development for landlocked developing countries and could therefore play an important role in poverty reduction and socio-economic growth.  Also, the remoteness and isolation of those countries made it necessary for the international community to consider special and extraordinary measures to ensure that they could compete in the international marketplace.  Turning to domestic resource mobilization, he said that while he agreed that sound macroeconomic policies and establishing enhanced savings mechanisms were necessary, landlocked developing countries were among the poorest in the world, and their gross domestic product (GDP) was very low.  No matter how hard they might try, great problems would remain.  He called on the world community to show concern and understanding for the situation of landlocked developing countries.  He reiterated his hope that these concerns would be taken into account as the Committee moved forward with its work.

LE HOAI TRUNG (Viet Nam) said globalization opened tremendous new opportunities but presented  complicated challenges.  The overriding task was to make the forces of globalization more positive and its benefits more accessible.  Lessons from past failures and successes, as well as innovative approaches, were required. 

Viet Nam, like many other developing countries, recognized the responsibility and vital need for creating a favourable domestic environment to attract external resources.  It was Viet Nam’s long-term policy to develop a multi-sector economy, and it was negotiating to become a member of the World Trade Organization.

Experience had shown that a number of elements in the trade and financial policies of the major industrialized countries could be improved to help reduce the vulnerabilities to which developing countries were exposed, he said.  It was estimated, for example, that the current costs of protectionism by developed countries significantly exceeded aid flows.

HASMY AGAM (Malaysia) expressed his delegation’s long-held view that the international financial system, in its current form, was ill-equipped to deal effectively with the complex problems and challenges of globalization.  Malaysia had consistently urged the international community to reform the international financial architecture to ensure more efficient and stable global markets.  Existing financial architecture was inadequate to deal with the effects of large, volatile international financial flows. Indeed the East Asian financial crisis, which had adverse effects on every country in that region, exposed major flaws in macroeconomic policies.  It proved that even countries with sound economic fundamentals were vulnerable to shocks in the international financial markets.

He said that while Malaysia had recovered from that crisis by instituting a number of drastic but sound domestic policies to negate its effects, the country remained wary of another collapse brought on by external factors.  It was therefore essential that measures taken to negate the crisis in the region be complemented by similar efforts at the global level to ensure stability in the world financial system.  Efforts to ensure orderly and stable international financial conditions must also include measures for substantive reform of international financial institutions. 

No one was challenging the legitimacy or continued relevance of the Bretton Woods institutions, he said.  The issue now was the need to enhance their transparency and accountability.  Malaysia had particularly emphasized that the International Monetary Fund (IMF) should strengthen its diagnostic capabilities and resist a “one-size-fits-all” approach.  Without action by the international community to address the risks of globalization, individual countries might be forced to fend for themselves or look to regional cooperative efforts.  Indeed, many developing countries were already responding by strengthening their own financial structures and liberalizing their markets.  Unfortunately, however, many obstacles remained.  In that regard, Malaysia had consistently suggested a regional financial mechanism that would complement the role of the IMF.

ELLEN MARGRETHE LOJ, State Secretary, Ambassador, Ministry of Foreign Affairs (Denmark), said that while promoting international cooperation for development had been one of the main pillars of the work of the United Nations for over 50 years, globalization presented the international community with new development challenges and opportunities.  To exploit those opportunities, the developing world must possess the necessary capacity.  Building that capacity required not only the right policies, but also sufficient resources.  In that regard, the financing for development process provided a unique opportunity to study the entire spectrum of development financing and to create a common understanding of the respective roles of international financial actors.

She went on to say that Denmark hoped the financing for development process could, among other things, strengthen the political will of industrialized countries to increase their development assistance so that it reached United Nations targets.  The process should also strengthen the level and impact of foreign direct investment, as ODA alone could not put developing countries safely on track towards sustainability.  She further hoped the process would improve market access for products such as textiles.  That concern should be the main objective of the next round of WTO meetings.  Special attention must also be given to products from developing countries.  The United Nations should play an important role in building the framework for the development financing process.

LAMBE ARNAUDOV, Deputy Minister of Economy of The former Yugoslav Republic of Macedonia, said that for countries in the Eastern European region, the financing for development process held special significance.  Most importantly, it meant support for the finalization of the region’s transition and speedy integration into the European Union economy.  The process would also mean economic growth, liberalization of foreign trade, more direct investments and assistance with the region’s debt problem, among other things.  Overall, the complex process required political will on the part of all stakeholders and should successfully result in mobilizing human, material and adequate financial resources for development.

During the last 10 years, the former Yugoslav Republic of Macedonia had undertaken substantial reforms to enable it to enter the modern market economy, he continued.  Among those reforms was the adoption of a package of laws aimed at market liberalization, developing entrepreneurship, banking reform and customs tariff harmonization.  To stimulate investment and production growth, the country had also enacted a law on free economic zones to benefit investors.  His country was also in the process of acceding to the WTO.  He hoped that negotiations would soon be successfully completed.

He recognized the importance of first mobilizing domestic potential, but foreign financial investment was also important.  His country was making its best efforts to meet the standards and requirements of the World Bank and the IMF.  He was pleased to report that so far, those efforts had met with success.  The financial arrangements reached with those two organizations provided the necessary security and attractive conditions for foreign investment.  In fact, reports had shown that the Republic had reached the envisaged annual GDP growth of between 5 and 6 per cent and was now the leading nation among the 26 countries in transition.

JEANETTE NDHLOVU (South Africa) said the process of financing for development offered a unique opportunity for addressing the problems of poverty and underdevelopment, especially in Africa.  The developed countries had a duty to partner with Africa as it formulated strategies for development and poverty alleviation.  There was a strong realization among African leaders that African countries had to lift themselves up from the quagmire of poverty and underdevelopment.  However, support from the developed world had to be an integral part of the overall international development approach.

The Millennium Summit had already set the stage where heads of State and government had resolved to create an environment conducive to development and to the elimination of poverty, she said.  Many African governments had, under difficult circumstances, responded positively to the prescriptions of bilateral donors, prospective investors and multilateral organizations.  Many developing countries had created the necessary climate to attract direct foreign capital flows by liberalizing their trade, privatizing State-owned enterprises, reforming their legal and tax systems and generally adhering to the prescribed injunctions.  Those initiatives had, however, failed to solicit the required responses.

It was necessary for developing countries to participate in the rules-making process, she continued.  The rules should take into account the specific needs of developing countries, rather than take a “one size fits all” approach to the rules.  Flows of foreign direct investment into developing countries were urgently needed.

The external debt problems of developing countries must be tackled in a holistic manner, she said.  The world trading system should be adjusted to incorporate the special needs of developing countries.  Structural poverty reduction strategies should replace structural adjustment programmes to meet the needs of developing countries.

BRUNO RODRIGUEZ PARRILLA (Cuba) said his delegation considered the Secretary-General’s report useful and a key element in the discussions in the Preparatory Committee. It supported the convening of the High-level Event next year and welcomed Mexico’s offer to host it.  He said the Secretary-General’s report did not make specific recommendations on how developing countries could overcome their development problems.  It was important for a conducive environment to be created for development.

On the question of trade, he said protectionism was increasingly rife in developed countries.  Non-discriminatory and equitable rules were needed.  There was also need for a propitious climate for economic development.  The only solution to the external debt problems of developing countries was the complete cancellation of that debt.  A solution should also be found for middle-income countries.  The ODA target of 0.7 per cent should be met by rich countries.

Mr. BEBARS (Egypt) said that while many delegations had noted the call by heads of State and government at the Millennium Summit for halving poverty by 2015, the Committee should recognize that the Millennium Declaration specifically outlined the ways to achieve that goal.  Those measures included:  the need to create an enabling environment for the mobilization of development financing; the need to establish a fair international trade order; the need to find a solution to the debt problem; and the need to take into account the special needs of developing countries.  The up-coming High-level Event then provided the unique opportunity to create ways to meet those objectives. 

He went on to say that this could be primarily accomplished through broad cooperation at all levels.  The value of such cooperation was evidenced by the comprehensive report of the Secretary-General on financing for development that was now before the Committee.  Those goals could also be reached by adopting realistic objectives for development financing that could address the rapidly-changing world political and economic spheres.  It would be critically important for the Committee to address all the issues before it within a global framework.  He urged the Committee not to let slip this excellent opportunity to create sound mechanisms for development financing.

He said it was beyond question that reform of all international intergovernmental organizations, financial or otherwise, was necessary so they might more adequately address the development realities of the new century.  It was important to note that those changes could be made without infringing on the mandates of any of those organizations.  The Committee should also be aware that the protectionist policies of certain developed countries constituted a serious attack on the principles of human rights and good governance.  Such practices have prevented developing countries from obtaining the resources to which they were entitled.  All should realize the impact of such arbitrary and discriminatory practices and work to avoid the serious consequences, including confrontation, that could arise.

NANA EFFAH-APPENTENG (Ghana) said the process of financing for development offered a historic opportunity for international consensus on actions at national and international levels to build sustainable livelihoods and lives of dignity.  In Africa, where low incomes limited the potential for savings and taxation, drastic reduction in budget deficits, lowering inflation and cost-recovery policies had increased levels of impoverishment among vulnerable segments of society.  Keen attention must therefore be paid to the constraints for mobilizing domestic resources.

Increased levels of ODA would be critical in the short-term for countries faced with enormous challenges, as they pursue austerity and other measures to improve economic management as well as costly reforms of governance structures, he said.

As developing countries had adopted various frameworks, such as those contained in the Poverty Reduction Strategy Papers, to better integrate the social objectives of their economic programmes, developed countries needed to shoulder their responsibility to use those frameworks in the delivery of aid.  It should be easier for such countries to show flexibility in shifting aid from projects to budget support, for instance.  Any strategy for development which failed to have as a major plank funding for diversification would fall short of achieving its goals, he said, adding that such a strategy would require partnership among the Bretton Woods institutions, the WTO and the United Nations system.

He said the financing for development process should seek to bring concentrated focus to the activities of the United Nations system organizations, in partnership with other relevant development actors.  Ghana believed that United Nations development activity should focus on stimulating regional integration in regions where it was most necessary.  The Preparatory Committee had a clear opportunity to break the cycle of ineffective global action, and the only way to do so was not by refining old proposals but by reflecting the best knowledge and current needs.

MOSUD MANNAN (Bangladesh) said the international community should create and promote an international economic environment supportive of sound macroeconomic policy and domestic resource mobilization in developing countries and countries with economies in transition.  Member States should facilitate access to finance by small and medium sized enterprises through the provision of credit -- particularly microcredit. 

Bangladesh strongly supported ideas related to good governance, broad-based taxation and the fight against corruption as necessary conditions for successful mobilization and utilization of domestic financial resources, he said.  The foreign direct investment process should develop appropriate ways and means to increase and optimize flows.  For developing countries, the development of physical infrastructure could be one of the major sectors where capital might be invested. 

The high-level meeting should establish an expert group to examine ways to encourage foreign direct investment flows among developing countries, he said.  On the issue of trade, all developed countries should immediately provide duty-free, quota-free market access to all non-arms exports from developing countries.  Efforts should be made by the international community to establish a non-discriminatory trade system.  He opposed the linking of environmental and labour standards with trade.  Both bilateral and multilateral creditors should pursue debt relief vigorously and expeditiously, including steps to provide significant and immediate debt relief to the poorest countries.  Debt burden was a major hindrance to economic development.  Therefore, a comprehensive approach, including the provision for debt financing, was expected from creditors.

MAKMUR WIDODO (Indonesia) said that as globalization was here to stay, more emphasis should be placed on ways to give globalization a human face to ensure that its workings were inclusive.  The High-level Event presented an excellent opportunity to set in motion alternative approaches to recent trends.  The number of relevant actors involved in the world economy had greatly broadened, and the impact on the intergovernmental negotiation process had also increased.  Despite many positive trends, developing countries continued to be sidelined.  The challenge was to bolster their participation in policy and decision-making.  Without meaningful participation, there could be no genuine representation and no lasting stability.  Systemic issues, such as enhancing the coherence of international monetary, financial and trading systems in support of development, were of critical importance.

The ascendancy of globalization and the liberalization of trade and finance had overshadowed the development approach and had resulted in the retreat of multilateral cooperation for development, he said.  Commitments made at the major development conferences in the 1990s to generate resources were never realized, and high expectations were withering on the vine.  The need to mobilize adequate financial resources, both at the domestic and international levels, for sustained growth and development was a critical challenge. 

External resources had become crucial, he said.  Since the advent of globalization, the volume of those resources had been severely eroded.  Financing for development had proven to be highly volatile and complex.  The great challenge was to put financing for development back on a firm footing.  Closely related was the issue of debt.  Since strategies had fallen short of a lasting solution, developed countries should be asked to consider the cancellation of all official debt of the Heavily Indebted Poor Countries.  However, debt relief should not become a substitute for ODA.  Developed countries should guard against export bias and help to ameliorate the system's acute competition.  Developed countries should also reduce their tariffs and non-tariff barriers on a number of export produces from developing countries. 

JOHN DAVISON (United States) said his country believed that confronting the problem of lack of development and poverty was an important challenge.  The United States was the second largest bilateral donor to worldwide development work, contributing $9.1 billion of ODA in 1999.

Recognizing that trade was an important source of economic growth and development, the United States had put in place a Generalized System of Preferences that covered over two thirds of the export goods from developing countries, he said.  The United States was also one of the largest markets for goods and services from the developing countries.  In 1999, over $500 billion of exports from developing countries entered the United States market, and that figure was expected to have grown to $600 billion in 2000.

In addition, he said the United States was expanding market access for many least developed countries through the African Growth and Opportunity Act and the Caribbean Basin Initiative Enhancement. Under the former, duty-free treatment under the Generalized System of Preferences was granted for almost all imports from Africa.  The Act also provided beneficiaries with significant advantages through the textile benefit provisions.

The United States recognized, he said, that many developing countries, particularly least developed ones, not only faced supply-side and market access difficulties, but also challenges in effective integration into the world trade system.  His Government, therefore, supported trade-related technical assistance and capacity-building, and had been involved in technical assistance programmes bilaterally or through multilateral agencies, such as the International Trade Centre.

The United States believed that a focused agenda on the issues dealing with mobilization of domestic resources could yield fruitful results, he said.  In that regard, the following issues were ready for discussion at the High-level Event:  institution-building, including governance, the rule of law, transparent and predictable regulatory systems, pro-growth and pro-poor economic policies, including trade and direct foreign investment policies; and international assistance to complement national efforts, including effective and strategic use of ODA.

Noting that the United Nations had benefited from the expertise of the Bretton Woods institutions and the WTO in preparing for the High-level Event, he said the mandates of those bodies should be respected.

The United States was concerned that the development financing process might be used as a vehicle for the United Nations to interfere in the governance and decision-making mechanisms of the Bretton Woods institutions and the WTO.  Any such attempt, if made, would seriously undermine not only the credibility of those institutions, but also the United Nations work in development generally.  The United States would oppose any such attempt, he asserted.

OUCH BORITH (Cambodia) agreed that the substantive agenda for the High-level Event should mirror the chapters and recommendations of the Secretary-General’s report.  On mobilization of domestic resources, he said that sound domestic macroeconomic management and transparent government had to be complemented by transparency in the operations of global financial actors.  In Cambodia, he added, financing for development was indirectly helped by the achievement of good governance.

Turning to discuss mobilizing foreign direct investment, he emphasized that Cambodia did not benefit from private flows such as commercial loans or portfolio investment.  Most foreign investment in Cambodia came from neighboring Association of South-East Asian Nations (ASEAN) countries as well as Japan, China and the Republic of Korea.  He believed that foreign investors were cautious in the aftermath of the 1997 financial crisis. 

On international cooperation through ODA, he said that in order for the Government to achieve its objectives, it should open a “new era” of expanded partnerships with the international community.  While praising the support of international initiatives aimed at increasing assistance, he also noted that some of those initiatives were often tied to conditions of a non-economic nature, such as human rights and democracy.  Those concepts were often molded by the interpretations of particular donors, and it was therefore important for the Committee to address such conditionality issues in detail.

On the topic of systemic issues relevant to the development financing process, he said that while many may disagree on the need to reform the international financial institutions and the lengths to which any reform should go, there was definitely inadequate participation by developing countries in the formal reform process.  There was also a lack of representation on the part of developing countries in the governance of those institutions.  He believed that it was vitally important for the Committee to seriously consider this issue and come up with meaningful recommendations to redress those shortcoming. 

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