Preparatory Committee for the

High-level International

 Intergovernmental Event on

 Financing for Development

4^th Meeting (PM)

FINANCING FOR DEVELOPMENT COMMITTEE CONCLUDES DEBATE WITH GENERAL AGREEMENT

ON NEED FOR GOOD GOVERNANCE, PRO-GROWTH POLICIES, MARKET ACCESS

The Preparatory Committee for the High-Level International Intergovernmental Event on Financing for Development concluded its two-day general debate with consensus emerging on a number of issues, especially on how developing countries should be helped to improve their economies and to share the benefits of globalization.

With the recommendations of the Secretary-General’s report on development financing providing a backdrop for the Committee’s discussions, there was general agreement on the need for institution-building, including good governance,

pro-growth policies and the creation of liberalized investment and trade regimes, as well as the opening of markets for exports of developing countries.

Noting that official development assistance (ODA) was declining, developing countries urged the industrialized nations to match national efforts by reaching the United Nations target of 0.7 per cent of gross national product for their ODA contributions.  There was also agreement on the need for more equitable foreign direct investment to the developing countries.

There was general understanding that building a sound national framework for development was key, and that developing countries could undertake that responsibility themselves.  Some said, however, that while sound domestic policies could spur development, it was essential that those measures be complemented by similar efforts at the global level.

While the need for maintaining macroeconomic policies was agreed, some developing countries called for more realistic consideration of the issue which addressed deepening poverty, falling commodity prices and low savings.

A number of developing countries, while not challenging the legitimacy of the Bretton Woods institutions, called for transparency in their decision-making processes and accountability.  Some also called for participation in the governance of international financial institutions.  One developed nation, however, said the mandates of the Bretton Woods institutions and the World Trade Organization (WTO) should be fully respected and not undermined.

4^th Meeting (PM

At its meeting this afternoon, the representative of Norway underscored the importance of sensitizing a broader set of public and private actors on financing for development.  The development impact of investments must be discussed with the private sector, he said.  The High-level Event should further strengthen the emerging consensus that the decisive factor behind a sustainable development process was tangible policy implementation.

The Preparatory Committee should work towards a meaningful outcome of the High-level Event, focusing on priority areas where progress could be made, international consensus could be reached, and the political will to move forward could be strengthened, the representative of Canada said.

Also making statements this afternoon were the representatives of Nigeria and Nepal.

At the conclusion of its general debate, the Committee broke into an informal interactive dialogue on “mobilizing domestic financial resources”, one of the six priority themes in the Secretary-General’s report.

The remaining themes, which would be taken up at subsequent meetings during this session, include:  mobilizing international resources for development, including foreign direct investment and other private flows; enhancing trade for financing development; increasing international cooperation for development; confronting external debt challenges; and addressing systemic issues.

The Preparatory Committee will meet again at a time to be announced in the Journal.

Committee Work Programme

The Preparatory Committee for the High-Level International Intergovernmental Event on Financing for Development met this afternoon to conclude its general debate and review of the inputs to the substantive preparatory process and the High-level Event scheduled for early next year.  Following that, the Committee was expected to hold an interactive debate on mobilizing domestic financial resources. (For details about the work of the Preparatory Committee, see Press Release DEV/2285 of 12 February 2001.)

Statements

Before hearing the concluding statements of the Committee’s general debate, Committee Co-Chairman, ASDA JAYANAMA (Thailand), addressed concerns expressed yesterday by the representative of Saint Lucia on the participation of representatives of the United Nations Conference on Trade and Development (UNCTAD) in the preparatory process.  Out of courtesy, representatives from non-United Nations institutions such as the International Monetary Fund (IMF) and the World Bank had been seated on the podium.  And, in light of the broad, Organization-wide cooperation in assembling the Secretary-General’s report on development financing, the Secretary-General himself represented relevant United Nations agencies on the podium.  The absence of representatives from UNCTAD or any other institutional actors did not mean that they would not or could not be allowed to participate in the process.  He stressed his readiness to hear the interventions of any interested institutional actors at any time.

SONIA LEONCE (Saint Lucia) said her delegation viewed UNCTAD as having relevance to the development financing process equal to that of the Bretton Woods institutions.  In fact, those financial stakeholders themselves were most often seen as being United Nations agencies.  She reiterated her delegation’s request that representatives of UNCTAD be allowed to address the Committee.  She did not understand nor appreciate the Secretariat’s differentiation in institutional stakeholders.

The Co-CHAIRMAN reiterated that he would give the floor to any institutional stakeholders wishing to participate in the preparatory process.

AUSTIN PETER OSIO (Nigeria) said the demands of the developing countries for equitable participation in the decision-making processes of the Bretton Woods institutions should be met.  The cancellation of external debts, which African States at their regional consultation had suggested, should be considered expeditiously, as had also been urged by the Millennium Summit.  Cancellation of the debts, as well as those of heavily indebted middle income countries, would enable those countries to assume primary responsibility for undertaking development projects on behalf of their peoples.

An urgent solution should be found to redress the ever-falling price of commodities of developing countries, especially those in Africa.  Nigeria agreed with the Secretary-General’s recommendation that technology transfer would also enhance capacity-building and efforts at diversification of the economies of developing countries.  That would, in turn, remove their supply-side constraints and facilitate production for the global market.

His delegation supported efforts that would reverse the trend in the uneven flow of foreign direct investment.  Africa, in particular, needed such an investment which should be increased and evenly distributed.

He hoped the current Preparatory Committee session would foster the requisite political will of the international community, on which the successful implementation of the outcomes depended.  He was confident that the Committee would come up with a tangible document by its next session in May.

JIM CROWE (Canada) stressed several fundamental elements that his delegation believed were essential if the development financing process was to be successful. First, there should be a central focus on the basic objective of development.  The complex factors that affect development must be approached coherently for development efforts to be effective.  Secondly, there must be close cooperation among all relevant United Nations bodies and other international organizations, in particular the IMF, the World Bank and the World Trade Organization (WTO).  Regional development banks should also participate fully in the process.

There was also a need for close cooperation at the national level among all relevant domestic and international ministries, in both developed and developing countries, he said.  Those issues had been debated at length in many other forums.  But in order for the current process to be a success, the Committee must avoid “cobbling together” the outcomes of other meetings that had addressed those issues.  It must try to draw on those past discussions to identify ways in which synergies could be utilized to produce new and effective means to generate resources for development.

He said the financing for development process provided an opportunity for a real dialogue on interrelated issues.  Areas of potential progress due to a convergence of views included strengthening international financial architecture, promoting greater cooperation between multilateral donors and integrating trade into national development and poverty reduction plans.  He also believed the Committee should work towards a meaningful outcome of the Event, focusing on a few priority areas where concrete progress could be made; international consensus could be reached; and the political will to move forward could be strengthened.

DURGA BHATTARAI (Nepal) said that while money moved across continents at the click of a button, some countries were still attempting to manoeuvre around strict and inequitable trade policies that hindered the movement of their exports.  The outright fragmentation of socio-economic standards caused by globalization had proved debilitating for much of the developing world.  It was a sad fact that global conferences of the 1990s had led many in the international community to believe that the tide of globalization would “lift every boat”.  The truth, however, was that while some boats had been lifted high on waves of technological advancements and economic prosperity, many others had been lost at sea. 

This stark reality made it critical for the Committee to avoid selling dreams that would be hard to fulfil.  Members should use lessons of the past to create comprehensive measures to generate financing for development.  Debt relief was one way to ensure such resources could be mobilized.  It was also important to address inequities in international trade schemes.  Only a level playing field

would lift developing countries from the mire of inequality and ensure they could participate in world markets.

TROND FOLKE LINDBERG (Norway) said the final Event must result in a concrete and effective follow-up mechanism that would preserve and further develop the working relationships between the Bretton Woods institutions, the World Trade Organization (WTO) and the United Nations.  Noting that the preparatory process had given rise to new, comprehensive consultative processes at capitals, he underscored the importance of sensitizing a broader set of public and private actors on financing for development.  The development impact of investments must be discussed with the private sector.

There was a widely shared understanding that building a sound national framework was the key to development, he said.  He added that such policies could only be developed by the developing countries themselves.  The High-level Event should further strengthen the emerging consensus that the decisive factor behind a sustainable development process was tangible policy implementation.

The growing consensus on ultimate goals and developing policies must be met with increasing, not declining, official development assistance (ODA).  He urged developed countries to reach the United Nations goal of 0.7 per cent of their gross national product (GNP) for ODA.  In the same vein, he urged creditor countries to forgive debt under the Heavily Indebted Poor Countries mechanism without compromising the aid budget.

He also urged that additional financing be provided for the global public initiatives, such as the international environment agenda in preparation for Rio+10 (Review Conference on the 1992 United Nations Conference on Environment and Development held in Rio de Janeiro, Brazil).  Norway also looked forward to the forthcoming report of the Secretary-General on a currency transaction tax.

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