Preparatory Committee for the

International Conference

 on Financing for Development

3^rd Meeting (AM)

PREPARATORY COMMITTEE IS TOLD DRAFT DOCUMENT FAILS TO MEET POTENTIAL

FOR DEVELOPMENT FINANCING CONFERENCE TO HELP POOR NATIONS

Australia Says Too Much Stress on Outside Help; UN Commissioner

Says Human Rights Perspective Must Be Key to ‘Better Life’ Proposals

In choosing too broad a canvas, and failing to focus on the central theme, the “draft outcome” of next year’s International Conference on Financing for Development had compiled a list of wide-ranging initiatives that were inappropriate, impractical and ineffective, said the representative of Australia as the Preparatory Committee for the Conference continued its resumed third session this morning.

The draft outcome, the representative added, exhibited neither a balanced recognition of the roles to be played by developing and developed countries nor a practical awareness of what was achievable.  It attempted to place responsibility for the majority of the initiatives on the donor community.  It also provided scant attention to the responsibilities of national authorities.  She said the conference -– to be held from 18-22 March 2002 -- had the potential to deliver on some very real possibilities for action, but that potential remained untapped by the draft outcome document.

The representative of the Dominican Republic told the Preparatory Committee the outcome document needed more concise and realistic recommendations, to achieve the greatest consensus at all levels.  There was also need to expand the chapter on the external debt burden.

The Preparatory Committee is meeting all this week to discuss arrangements and outcomes of the Monterrey Conference.  The conference seeks to address broad development concerns, primarily obstacles faced by developing countries in mobilizing the resources needed to finance their development.

Also addressing the Preparatory Committee this morning, Mary Robinson, United Nations High Commissioner for Human Rights, said financing for development was the best investment that could be made today, in order to ensure security and human dignity for all.  The human rights perspective must be a key feature of the roadmap to Monterrey.  “We must pursue, both individually and collectively, strategies that aim to give everyone decent life chances and that seek to ensure realization of all human rights -– civil and political, economic, social and cultural as well as the right to development,” she said.

3^rd Meeting (AM)              

Angela King, Assistant Secretary-General and Special Adviser to the Secretary-General on Gender Issues and Advancement of Women, said that formal programmes to promote savings and entrepreneurship had tended to neglect women.  That was due in no small part to the perception that women were dependent on men, and their income was supplementary and of less importance for household survival.  Studies had shown, on the contrary, that women’s income was critical for family well-being, as women tend to allocate a greater share of their income to health, education and nutrition-related expenditures.

Statements were also made this morning by the representatives of the United States, Samoa (on behalf of the Alliance of Small Island Developing States), Canada, Lao People’s Democratic Republic (on behalf of Land-Locked Developing Countries), Zambia, Bangladesh (on behalf of the Least Developed Countries), Algeria, Belarus, Peru, Cuba, New Zealand, Nepal, Brazil, Burundi, and Iran (on behalf of the “Group of 77” developing countries and China).

The representatives of the United Nations Development Programme (UNDP) and the Organisation for Economic Cooperation and Development (OECD) also spoke.

The Committee meets again at 3 p.m. today to continue its discussion on the draft outcome document.

Background

The Preparatory Committee for the International Conference on Financing for Development met this morning to continue its resumed third session.  The Committee planned to continue its consideration of the draft outcome prepared by the Facilitator (document A/AC.257/25).  For background information see Press Release DEV/2345 of 15 October, 2001.

The Committee will meet until Friday, 19 October, to discuss arrangements for the Conference, planned for 18 to 22 March 2002 in Monterrey, Mexico.  The Conference seeks to address broad development concerns, primarily obstacles faced by developing countries in mobilizing the resources needed to finance their development and to fulfil the social and humanitarian goals set by global conferences of the past decade.

Statements

MARY ROBINSON, United Nations High Commissioner for Human Rights, said attention must be focused on making increased resources available for development.  Financing for development was the best investment that could be made today, in order to ensure security and human dignity for all in the future.  In parallel to mobilizing additional resources for development, the Conference would consider important issues of governance, the rule of law and policy coherence.

The human rights perspective must be a key feature of the roadmap to Monterrey, she said.  “We must pursue, both individually and collectively, strategies that aim to give everyone decent life chances and that seek to ensure realization of all human rights -– civil and political, economic, social and cultural as well as the right to development.”  Equality of opportunity for development must be an imperative principle of international cooperation.  In such strategies, human rights were no longer viewed as a finger-pointing agenda, or treated as conditionality for aid.  Rather, human rights offered important guiding principles for development and international cooperation.

It was not surprising, she said, that many of the issues that were on the agenda for the Conference found normative and legal basis in international human rights instruments.  The human rights framework merited due recognition in the final outcome of the Conference –- although it was currently absent from the draft document before the Committee.  A human rights perspective could, for example, contribute to better defining the “principles of global economic and social governance”.

ANGELA KING, Assistant Secretary-General and Special Adviser to the Secretary-General on Gender Issues and Advancement of Women, said that formal programmes to promote savings and entrepreneurship, which were vital to national economic development, had tended to neglect women.  That was due in no small part to the perception that women were dependent on men, and their income was supplementary and of less importance for household survival than that of men. Studies had shown, on the contrary, that women’s income was critical for family well-being, as women tended to allocate a greater share of their income to health, education and nutrition-related expenditures.

Taxation systems were another important area, she said.  Systems where direct taxation provided a major proportion of public revenue, tended to benefit the poor, including women, more directly.  Women’s entry into the labour market, and the condition of their involvement, could also be directly affected by taxation structures.  For example, employment disincentives still existed for women where joint income-tax rebates were a further disadvantage to women entering the labour market.

She added that an increasing number of economists had begun to demonstrate that macroeconomic policies and institutions, which did not take gender perspectives into account, did not make sound economic sense.  Such policies had in fact further exacerbated gender inequality, which in turn impeded the achievement of macroeconomic goals.  Existing inequalities in the ownership of, or access to, economic resources bar women from taking advantage of new investment opportunities in the export or domestic sectors.  Barriers to women farmers’ and entrepreneurs’ access to credit may also impede their ability to expand production and take advantage of new opportunities.

TERRY MILLER (United States) said the first and greatest challenge for Monterrey was to communicate clearly the message that there were prerequisites to successful development –- countries must control conflict, commit to freedom and embrace capitalism.  If only that much was done, Monterrey would be a success.  Of course, much more could be done.  Participants could commit to openness, promote the exchange of ideas and information among countries, liberalize trade to increase efficiency and to produce and obtain more goods and services as well as free movement of capital to allow investment to go where the returns were greatest.  They could also commit to cooperation. 

On how to do that, he said, a one-page political declaration of will and commitment should be the primary document emerging from Monterrey.  Secondly, the dialogue and cooperation that had characterized the financing for development preparations and set the process apart from its predecessors should be continued.  The goal must be to find the balance between the challenge to do more and respect for what was already being done, between the activities of the private sector and those of government, between national efforts and international support.

He said that rather than a negotiated plan of action, the Conference should produce a sort of compendium of ideas, much as the Secretary-General’s report and the Zedillo panel had already done.  The challenge was to find ways to help countries on the margin integrate themselves more fully and advantageously into a system that was known to work.

TUILOMA NERONI SLADE (Samoa), speaking for the Alliance of Small Island Developing States, said the condition of 2.8 billion people living in poverty was unacceptable.  The Financing for Development process should work to cure that condition.  There was a need to ensure that the social problems facing the world today were alleviated.  There was a need for the conference to develop measures that would transfer into practical solutions.  In that regard, the draft outcome document was an excellent starting point for negotiations.

Within the priority areas of the conference goals, he added, there were a number of concerns that were of particular concern to small island developing States.  Those included capacity building, institutional strengthening and financing for development.  Those were necessary preconditions to enable developing countries to address their needs, which were economic and social in nature.  There was also a need for the careful identification and balancing of roles of all stakeholders, especially the roles that should be played by developed and developing countries to ensure that sustainable growth and development was achieved in every respect.

JACQUELINE DELACY (Australia) said she was disappointed that the draft outcome exhibited neither the balanced recognition of the respective roles that need to be played by developing and developed countries, nor a practical awareness of what was achievable.  In choosing too broad a canvas, and failing to focus on the central theme of financing for development, it had compiled a wide-ranging list of initiatives that were inappropriate, impractical and ineffective.  In attempting to place responsibility for the majority of the initiatives on the donor community, it provided scant attention to the critical importance of national policies and the responsibility placed on national authorities.  The document was not a constructive basis for further discussions.

She added that the draft outcome lost the opportunity that may well prove pivotal in the fight against poverty.  While it was clear that poverty remained a fundamental problem of huge dimensions, there had been recent indicators of some progress.  Member States should examine the broad range of policy frameworks –- domestic and international –- to determine what aspects were working well, and where there was a need to do better.  In short, the conference had the potential to deliver on some very real possibilities for action and successful outcomes, but they remained untapped by the draft outcome document.

JIM CROWE (Canada) said the Financing for Development process was just one part of a wider array of approaches to many of today’s challenges.  With regard to the final outcome document, he said that it was important to avoid wasting energy trying to duplicate work being done in other multilateral meetings.  The outcome of upcoming negotiations in other forums must not be prejudged.  In the area of trade, what should be done was to launch a new round of multilateral trade negotiations.  There was little value in trying to create new bodies and institutions.  Rather, ways should be explored on how to better use existing structures.

The Financing for Development process was unique, in that it brought together the World Bank, the International Monetary Fund (IMF) and the World Trade Organization with the United Nations system, he said.  Shared responsibilities for financing for development made such cooperation vital.  Ways should be explored to improve cooperation among them and enhance coherence in their policies and programmes.  The bulk of resources, he said, must be generated domestically.  Therefore, the outcome document should be enhanced regarding the responsibility of governments in creating enabling environments for attracting resources.  Countries should take greater ownership for their own development.  The role of international resources, such as official development assistance, should serve to act as a catalyst to attracting other resources. 

ALOUNKEO KITTIKHOUN (Lao People’s Democratic Republic), speaking for landlocked developing countries, said that of the six issues discussed in the Financing for Development process, the three most important to landlocked developing countries were:  trade, domestic resources mobilization and official development assistance.  Those countries needed preferential treatment, designed to address their specific trade-related problems.  In that context, prescriptive measures would be necessary to help improve trade performance of landlocked developing countries.

While recognizing that domestic resource mobilization was the primary responsibility of developing countries themselves, he said, the support and cooperation of the international community were needed, especially for those who were economically vulnerable, such as landlocked developing countries.  They were generally among the poorest in the world, with their weak growth rate and poor trade performance caused mainly by high transit transport costs.  Their gross domestic product, their primary source for domestic savings, was very low.

Such conditions, he continued, imposed serious constraints on their overall socio-economic development efforts and limited their ability to mobilize both domestic and international resources to finance their development projects.  Thus, official development assistance would continue to be a significant source of financing for development in landlocked developing countries.

AGNES MUSUNGA (Zambia) said the access of developing countries’ commodities to world markets needed to be in important step in the Financing for Development process.  Import controls in Zambia had been abolished, but like most African countries Zambia had suffered from trade barriers and restrictions set up by developed countries.  Trade matters were of primary concern for her country.  She looked forward to the adoption of measures suggested in the draft outcome, especially regarding the establishment of a financing mechanism that would protect developing economies from the effects of natural disasters and armed conflicts.

While development responsibilities fell mainly on the countries themselves, the role of the international community was crucial.  In that regard, the role of official development assistance was very important.  In recent years there was a process of lowering official development assistance and many countries had not reached the target of 0.7 per cent of gross national product.  At the same time, restrictions for disbursement of official development assistance had been increased.  Zambia had embarked on many structural adjustment programmes yet cooperation by its development partners had been lacking.  With a solid Financing for Development process in place, many of the goals of developed and developing countries would be realized.

SHAMEEM AHSAN (Bangladesh), on behalf of the least developed countries, said poverty eradication continued to be the main focus of work.  Attention must be given to those economies with a reasonably sound foundation and clear emphasis on social and human development, in combination with targeted poverty alleviation programmes.  Those economies remained seriously “cash-strapped”.  A massive rededication of public and private capital flows to those economies was necessary for successful poverty eradication.

Along with liberalization, he said, the principles of non-discrimination, predictability, transparency, and equity should be the focus of international trade policies.  There should be efforts to mainstream trade policies into the wider framework of development and poverty reduction.  That effort was important to allowing the benefits of trade liberalization to be fully realized.  To develop appropriate arrangements for capacity-building in trade matters, it was important to strengthen technical assistance for trade and trade-related matters.  That was needed, particularly by the least developed countries, to raise their ability to appropriately and gainfully participate in trade negotiations.

EDUARDO TEJERA (Dominican Republic) said the draft document was too lengthy in some areas; it needed more concise and realistic recommendations that could garner the greatest consensus at all levels.  He said next year’s Conference should have a political document, separate from a more detailed action plan.  The circumstances of the current global economic recession had radically changed the entire picture characterizing economic development and financing for development. The document must, therefore, include a chapter adequately referring to that situation.

With regard to trade, he said there was no question that it was the chief source of creating wealth and spearheading development.  The document must make more direct reference to negotiations under way in the World Trade Organization and the need for developing countries to enjoy preferential treatment in the global trading system.  In that context, it must also stress the need to get rid of subsidies as well as the need for anti-dumping measures.  It was also necessary to expand the chapter on the external debt burden, the servicing of which blocked social investments, among other things.  Further, the text should reflect the important role played by the private sector and civil society in mobilizing resources for financing development.

NOUREDDINE BARDAD-DAIDJ (Algeria) said events of the last few years had highlighted many problems related to development, both economic and cultural.  Many solutions to difficulties faced by developing countries were in their own hands.  However, developing countries’ efforts for economic development had been carried out at heavy social costs.  Resources provided so far by the international community for development were clearly insufficient.  Much of that assistance had been enough only to meet debt obligations, with little left over for development.

The Financing for Development process, as well as the Monterrey Conference, presented a key opportunity to build cooperation for development and to address many of the problems of the international financial system.  Member States should use that opportunity to mobilize greater resources for development around the world, particularly for the eradication of poverty.  The draft outcome, while being far from perfect, was a good starting point for negotiations.

In that regard, he said, there was a need to ensure that there were transparent and equitable conditions in the system of multilateral investment.  The global context facing Member States was far from helpful in reaching development goals.  The form of the final conference document should reflect the international community’s spirit of commitment to development.

ALIAKSEI A. MAZMUKHOU (Belarus) said that it was critical not to sweep away all the good work that had been achieved by consensus thus far.  The final outcome must take into account the contributions of the business community, non-governmental organizations, the regional preparatory meetings and governments, all of whom provided key ideas to the Financing for Development process.  On the structure of the document, he said that a brief preamble should be added to the document reflecting current economic realities, as mentioned by some speakers.  The second portion could cover the subjects on the agenda.

The key responsibility for defining the priorities for national development lay with the national governments themselves, he said.  Small nations, particularly the least developed, could not make the contributions to global development that they could if they had the necessary financing.  It was also key, she said, to identify the themes of the round tables, so that ministers could have sufficient time to prepare for them.

MARCO BALAREZO (Peru) said that there were two aspects he wished to highlight.  In the first place, the sense of support that the paper had received reflected a certain degree of consensus on its usefulness.  It contained some controversial elements, which required further discussion but which were important ideas.  He wished that more proposals from the Secretary-General’s report had been included.  The paper was a good starting point for a substantive discussion. 

Secondly, he continued, it was necessary to look at it from the point of restoring balance.  A balance must be struck between national efforts and international support.  The document should also clearly set forth commitments regarding domestic policy.  A balance must also be struck among the needs of all countries.  Further, the document must take an approach based on human rights, and poverty must be at its core.

ORLANDO REQUEIJO (Cuba) said that never had the issue of financing for development been more relevant that now.  The world economy had grown far more interdependent, but they had led to a disparity of benefits.  The conference should address the proper flow of resources, the allocation of public funds, access to markets by developing countries and giving developing countries greater decision-making in the international economic system.  The United Nations must be the place to address social and environmental issues and ensure that the economic system responded to the needs of development.

He said the imposed models of development had not worked for many developing countries.  Some of them sought to use deceitful language to strip people of the developing world of their rights.  They attempted to use coercive measures to impose upon developing countries a system that did not meet their needs.  The old models did not address the problems faced by mankind.  It was now time to begin to work out the results and outcomes of the conference that would meet the needs of developing countries and construct new models of financing for development.

REBEKAH RILEY (New Zealand) said that in considering the Financing for Development process, her Government had focused on a number of areas where it believed value could be added.  These included:  encouraging more innovative use of official development assistance to improve efficiency and harmony in the mobilization and delivery of resources; calling for greater international cooperation between the many development and financing agencies to improve efficiency and delivery; seeking to improve the conditions for effective developing country participation in global trade; ensuring that the needs of small island developing States were adequately accommodated; and supporting internally driven, stakeholder-mandated reform of existing international institutions, as a more effective alternative to imposing radical change on those bodies from without.

The draft outcome, she said, contained many positive points, especially references to developing countries as being primarily responsible for achieving growth and equitable development, and promoting a domestic environment conducive to private sector development.  However, the document should avoid recommendations, which would be overly controversial and unlikely to attract consensus, as those might distract delegations from moving ahead with other worthwhile initiatives for financing for development.  Given that poverty eradication was a headline issue now for many countries and international delivery agencies, she believed it warranted greater attention in the document.

WILLIAM NICOL, Organisation for Economic Cooperation and Development (OECD), said policy coherence across finance, trade, environment and development cooperation policies was a key ingredient and tool to make development cooperation more effective and to make globalization work for the poor.  In that connection, the involvement of all multilateral organizations in the preparations for Monterrey was necessary.  In fact, coherence and governance both nationally and globally would underpin the approach towards a better integrated and more closely interactive financing for development.  It would guide the involvement and action of the private sector, and hence the credibility of the whole process.

He added that coherence and governance would be key principles and watch-words in shaping a new, broad consensus in the international community on ways and means to move decisively towards fulfillment of the Millennium Declaration goals and the implementation of poverty- reduction strategies.  The OECD, he said, was very much involved in the many substantive issues to be addressed at the Conference.  And after Monterrey it would continue to be involved in the vital issue of mobilizing financing for development.

BIMAL PRASAD KOIRALA (Nepal) said resources were the limiting factor with regard to development in developing countries.  Most of them had opened their economies in the early 1990s and had gained some progress.  However, that openness had also brought with it some anomalies.  Those countries had not been able to create strong social safety nets.  It was necessary to ensure compatibility and coherence among the six elements in the draft.  It seemed that the linkages among them had not been analyzed carefully enough.  There were questions that should not remain unanswered in the final text.

The draft, he continued, looked like a code of conduct for the poor countries, which needed external resources for financing development.  The widening resource gap was the foremost concern for those countries.  It was difficult for poor countries, especially the least developed, to redirect their resources.  Thus, greater efforts were needed to place recipient countries in the driver’s seat so that they could do that.

ZEPHIRIN DIABRE, United Nations Development Programme (UNDP), said he hoped the meeting of the Committee would not only help map out a clear route to Monterrey but also indicate where best the services of the UNDP and other relevant organizations may be utilized, to ensure that the intended destination was reached.  Progress on several of the critical, but also complex, issues before the Committee called for an even stronger spirit of accommodation and balance, whereby all stakeholders commit themselves to taking the necessary action to mobilize resources for development.

He said financing for development could not rely on isolated streams of funding.  External resources and an enabling environment were important.  Internal

reform, strong national institutions and the commitment of the vibrant forces of society to “pro-poor growth” were crucial to meeting the goals of the Millennium Declaration.  He added that the operational activities for development of the United Nations were essential for poverty eradication.  United Nations development cooperation was more than aid; it was the vivid expression of world partnership to end poverty and the means to break the cycle of aid dependence.

ANTONIO GUSTAVO RODRIGUEZ (Brazil) said the document was comprehensive and tried to reflect the views of all countries.  The statement delivered by the representative of the United States had brought attention to the need to be realistic.  It was also necessary to avoid scaring away some stakeholders.  The issue of subsidies was one area in which the words of governments did not match their actions.  It was necessary to create a fair international environment in which all countries could compete.  The international community must not wait for another global recession to realize that action must be taken.

VENERAND NZOHA BONAYO (Burundi) said the Conference should be a pivotal moment to spell out the noble commitments undertaken at the Millennium Summit.  Two crucial issues that should be reflected in the outcome were official development assistance and debt relief.  The only way to enable the poorest countries to reduce poverty was to substantially increase assistance to them.  Africa needed a growth rate of 7 to 8 per cent annually over the next ten years in order to reduce poverty.  Despite their efforts, most African countries would not be able to meet that challenge.  International assistance must be increased and should be an integral part of the Monterrey Conference.

The Committee, he said, should do everything it could so that specific initiatives could be put together before its session ended.  The time had come for the international community to decisively support an approach to resolving conflicts and mobilizing resources to implement the New African Initiative.

In a concluding comment, BAGHER ASADI (Iran), on behalf of the Group of

77 developing countries and China, said that yesterday he presented a viewpoint of the developing community on the outcome document.  It was important for the Committee to focus its efforts and remain positive throughout the discussions.  The success of the preparatory process and the Conference itself depended on that positive participation of delegates.  In that regard, it was crucial that delegates proceeded in their discussions based on what had been discussed previously.

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