NGO PRESS CONFERENCE ON DEVELOPMENT FINANCING

NGO PRESS CONFERENCE ON DEVELOPMENT FINANCING

The Monterrey Consensus must put people before profits, Hellen Wangusa of African Women's Economic Policy Network, told correspondents this afternoon at a Headquarters press conference, sponsored by the Permanent Mission of Norway to the United Nations. 

Ms. Wangusa was speaking on behalf of the NGO Caucus to the fourth session of the Preparatory Committee for the International Conference on Financing for Development.  The Consensus, currently being discussed in the Committee, would be adopted at the conclusion of the Conference, to be held in Mexico from 18 to

22 March. 

Joining Ms. Wangusa were Martin Khor of Third World Network, June Zeitlin of Women's Environment and Development Organization, and Martin Koehler of the Campaign to Reform the World Bank. 

The non-governmental organization (NGO) community, said Ms. Wangusa, called on governments to urgently change the course of the current meeting to deliver equitable and sustainable policies to eradicate poverty and to create a consensus based on justice, international cooperation, and the realization of human rights and development.  They were deeply concerned about the direction of the current deliberations in which the rights of poor and working people had become secondary. 

Early commitments to reform the international financial and economic systems were being "whittled away", she continued, as governments clung to the policies of the Washington Consensus –- deregulation, privatization, cutbacks in social services, and trade and financial liberalization.  Those failed policies had led to massive job losses, increasing environmental degradation and the escalating impoverishment of millions, while a few were becoming richer than ever. 

She said the Conference must make several commitments.  First, donor governments must establish a timetable for meeting the 0.7 per cent official development assistance (ODA) target.  They should start with the Secretary-General's challenge to double contributions to $100 billion within the next two to three years in order to reduce by half the number of people living in extreme poverty by 2015. 

Secondly, governments must ensure the broad participation of civil society, particularly of women, in economic decision-making, she continued.  Thirdly, the Conference must establish the primacy of the United Nations in addressing the lack of institutional democracy in the international financial and trade institutions, namely, the World Bank, the International Monetary Fund (IMF) and the World Trade Organization. 

Fourthly, governments must ensure that trade rules were fair, people-centered and gender sensitive, she said.  In particular, they must reverse the trend that protects businesses at the expense of workers.  Finally, she called for the immediate cancellation of the debt of the most impoverished countries and the establishment of a fair arbitration process for the future.

Responding to a question regarding ODA commitments, Mr. Koehler said that there was an ongoing debate within the donor community on the 0.7 per cent target.  The language now being proposed by the European Union, while toned down, still mentioned the need to have time frames to achieve that target.  The NGO community continued to emphasize the need to have a time frame, which was consistent with the achievement of the millennium development goals. 

Turning to the text, Mr. Khor said that the proposals on terms of trade, for example, were so watered down that they hardly recognized that commodity price decline was a major factor in depriving developing countries from finance.  Perhaps most disappointing of all was the section on systemic issues, which had been so watered down that it did not even recognize that the world was in the midst of a very dramatic financial stability crisis.

He hoped that there could still be an upgrading of issues such as the need to prevent financial crisis through the regulation of private capital flows.  Also necessary were stable exchange rates.  The three big currencies must first stabilize among themselves and then have a system to control currency speculation in the developing countries.  Also, the text did not mention mechanisms to manage a crisis should one break out.

There also needed to be changes in the governance of the financial systems and financial institutions, both at the level of the World Bank and the IMF, as well as institutions such as commercial and investments banks and hedge funds, he added.  Unfortunately, the Conference did not deal effectively with any of the systemic issues mentioned. 

Ms. Zeitlin added that the NGO community had hoped discussions would bring out new ideas and would be different than those held in the Bretton Woods institutions.  The new draft of the Consensus was just more of the same.  They were counting on a United Nations-led effort to reinvigorate international financial governance.

* *** *