Economic and Social Council

Special High-Level Meeting

 With Bretton Woods Institutions

3^rd Meeting (AM)

MONTERREY CONFERENCE GIVES TIMELY LIFE TO QUEST FOR DEVELOPMENT COOPERATION

SAYS SECRETARY-GENERAL, AS ECOSOC MEETS WITH BRETTON WOODS INSTITUTIONS

Secretary-General Kofi Annan told the Economic and Social Council this morning that the International Conference on Financing for Development,which was held in Monterrey, Mexico, from 18 to 22 March, had given new and timely life to the noble quest for international cooperation for development.

Addressing the Council as it met with the Bretton Woods institutions to discuss the outcome of the Conference and of the meetings of the Development Committee and the International Monetary and Financial Committee, he said the challenge now was to maintain the positive spirit that had led to the Conference's outcome document, the "Monterrey Consensus", and translate it into real and meaningful implementation.  The Consensus had enormous potential to bring about “significant, overdue change.”  

Today’s meeting was well-timed to sustain the momentum, he said.  He hoped it would be used to explore how best to address the task of addressing issues of coherence, coordination and cooperation and build on the Monterrey experience.  A common vision had been set out in the Millennium Declaration and now in the Monterrey Consensus.  He hoped that the unprecedented level of collaboration between the United Nations, the Bretton Woods institutions and the World Trade Organization would continue, “so that our institutions can respond effectively to the new responsibilities that have been placed upon us.”

Ivan Simonovic (Croatia), President of the Economic and Social Council, said the Monterrey Conference had been an important first step in creating a coherent and more participatory multilateral system.  A massive effort was now required to mobilize more and better cooperation for development and to build an international economic system that was more conducive to the development of the poor.  To maintain the momentum of political commitments made in Monterrey, it was necessary to consider how to make the most of the annual spring meetings.

The goal was obviously to make financial, trade and economic activities and systems more supportive of development goals, as well as to make the most of existing institutions by strengthening cooperation between them.  A close link must be established between individual Millennium Development Goals and principles set in Monterrey for their financing, he said.  That would finally improve effectiveness in dealing with the real world problems such as hunger, illiteracy, poverty and disease.

Trevor Manuel, Chair of the Development Committee and Minister of Finance of South Africa, said that the Committee would endeavour to reflect a new consensual approach to development.  Stressing the need to enhance technical capacity in many developing countries, he said problems involving those countries included lack of coherence within governments, as well as between the governments of the recipient and donor countries.  Citing the words of World Bank President James Wolfensohn, who emphasized at the weekend that it was time to move forward from philosophy to implementation, he added his own call for a move from talk to action.

Eduardo Aninat, Deputy Managing Director, International Monetary Fund (IMF), speaking for the International Monetary and Financial Committee, welcomed the sense of solidarity with which the international community had worked to take decisive actions to maintain financial stability in the face of the economic slow down.  The current global economic challenge was to strengthen the recovery under way, an undertaking that would require continued vigilance.  Improving living conditions throughout the world was a clear priority of the international community.  The Committee, therefore, fully supported the Monterrey Consensus.

Eduardo Sojo Garza-Aldape, Head of the Office of the Presidency for Public Policy, Mexico, said Monterrey had been a turning point in the debate on financing for development.  For the first time, the subject had been examined in a comprehensive and integrated fashion with contributions from all parties involved.  A new awareness had been gained of the importance of the economic growth of developing countries.  That process would reach a crucial stage at Johannesburg.  The future must now be built, rather than merely awaited.  It was time to capitalize on the growth of awareness achieved throughout the world.

Following the opening statements, the meeting was suspended so that a dialogue could be held on the overall theme of the meeting in an informal setting.  Gert Rosenthal (Guatemala), Senior Vice President of the Economic and Social Council, and Dumisani Shadrack Kumalo (South Africa), served as chairs of the two round table discussions that took place.  When the meeting resumed, they gave reports on the round tables.

Evelyn Herfkens, Minister for Development Cooperation of the Netherlands, also spoke.

Concluding remarks were made by:  Mr. Aninat; Shengman Zhang, Managing Director, World Bank; and Nacer Benjeloun-Touimi, Senior Advisor, World Trade Organization.  Mr. Simonovic (Croatia), President of the Economic and Social Council, made closing remarks.

Background

The Economic and Social Council this morning convened a special high-level meeting with the Bretton Woods institutions to discuss the outcome of the International Conference on Financing for Development, which was held from 18 to 22 March in Monterrey, Mexico, and of the meetings of the Development Committee and the International Monetary and Financial Committee.

The Council had before it a note by the Secretary-General on the theme of the meeting (document E/2002/13), in which he states that this year’s meeting provides a unique opportunity to lay down the foundation for staying engaged, as called for in the “Monterrey Consensus”, the outcome document adopted at the International Conference on Financing for Development.

The note states that the Monterrey Consensus encouraged “the United Nations, the World Bank, the International Monetary Fund (IMF), with the World Trade Organization (WTO), to address the issues of coherence, coordination and cooperation, as a follow-up to the Conference”, at the spring meeting between the Council and the Bretton Woods institutions.  It also notes that “the meeting should include an intergovernmental segment to address an agenda agreed to by the participating organizations, as well as a dialogue with civil society and the private sector.”  In that regard, the Secretary-General writes, an essential aspect of coherence lies in ensuring that each international organization contributes to the agreed objectives within its own area of expertise and responsibility.

The Secretary-General writes that the meeting, which is being held shortly after the Conference, provides a valuable opportunity to continue the Monterrey process and to have a first discussion about the issues that would be relevant for organizing the dialogue next year.

Among the questions put forward by the Secretary-General for possible consideration during the meeting are:

-- How could future cooperation be developed among the Council, the Development Committee, the International Monetary and Financial Committee and the appropriate intergovernmental body of the WTO in the follow-up to Monterrey? 

-- Are more effective outcomes of our future spring meetings possible? 

-- By what means can we engage other stakeholders?

-- How can we collectively monitor progress in the implementation of the Consensus?

-- What benchmarks could be agreed upon on specific aspects of the Consensus?

-- What actions should the international community take to support the achievement of the Millennium Development Goals, as countries carry out the national policies envisaged in the Consensus?

The Secretary-General further writes that to maintain the political momentum reached in Monterrey, it is important to underline the continuum between Monterrey and the World Summit on Sustainable Development, to be held this year in Johannesburg.  The former embodied a first crucial stepping stone in the road to a global system more conducive to the realization of the Millennium Development Goals.  The Summit will be another key opportunity to rekindle the collective effort towards shared goals and to enhance coherence among economic, social and environmental policies.

Statements

IVAN SIMONOVIC (Croatia), President of the Economic and Social Council (ECOSOC), said that over the last four years, the Council’s annual spring meetings had evolved into a unique forum enabling dialogue between key policy-makers on financial, monetary, development and foreign affairs.  The meetings had contributed to the strengthening of policy coherence, coordination and cooperation, as well as maintaining an important focus on the Millennium Development Goals.

He said that in the run-up to Monterrey, cooperation with civil society and the business community had been carried forward to an unprecedented level.  The Millennium Development Goals could only be achieved with the mutual commitment of international organizations, non-governmental organizations (NGOs), the business community, as well as developed and developing countries.

The Monterrey Conference had been an important first step in creating a coherent and more participatory multilateral system, he said.  A massive effort was now required to mobilize more and better cooperation for development and to build an international economic system that was more conducive to the development of the poor.  To maintain the momentum of political commitments made in Monterrey, it was necessary to consider how to make the most of the annual spring meetings.

The goal was obviously to make financial, trade and economic activities and systems more supportive of development goals, as well as to make the most of existing institutions by strengthening cooperation between them.  A close link must be established between individual Millennium Development Goals, and principles set in Monterrey for their financing, he said.  That would finally improve effectiveness in dealing with the real world problems such as hunger, illiteracy, poverty and disease.

Secretary-General KOFI ANNAN said Monterrey had been a real achievement.  It had given new and timely life to the noble quest of international cooperation for development, and it had been the culmination of wide-ranging efforts to put development at the core of the international agenda. 

“But let us be clear -– Monterrey was not an end in itself,” he said.  The challenge now was to maintain the positive spirit that had led to the Monterrey Consensus, and translate it into real and meaningful implementation.  That Consensus had enormous potential to bring about “significant, overdue change.” 

Where once the international community had spoken about conditionality, the Consensus was based on partnership, with shared responsibilities and mutual accountability, he said.  Where once it had debated over competing visions of development and how to measure it, there was now a common platform in the Millennium Development Goals, which the international community would be striving to achieve and monitoring together each year.

He added that “where once we were mired in misconceptions about official development assistance (ODA), today we see clearly that ODA can work in the right circumstances, and the Consensus is firm in its call for more and better ODA.”  Today the international community also recognized the need for good governance, sound macroeconomic policies, debt relief and access to markets and foreign investment.  It understood the imperative of fighting corruption and equitable burden-sharing in times of financial crisis.  It also realized that developing countries must have a greater voice in economic decision making, and that the global monetary, financial and trading systems must work in better tandem.

Today’s meeting was well-timed to sustain the momentum, he said.  He hoped the meeting would be used to explore how best to address the issues of coherence, coordination and cooperation and build on the Monterrey experience.  The inclusive approach must be continued and care must be taken not to duplicate processes that were already taking place.  For his part, he would ensure that the requests addressed to him in the Monterrey Consensus would be carried out fully and in a timely fashion.  He would do all he could to ensure that “our organizations stay on the same page”.

One of the major tasks faced was to ensure the success of the upcoming Johannesburg Summit, he said.  Among the other efforts made, Johannesburg must put a crucial piece of the puzzle into place by offering the prospect of sustainability -– development that made a difference not only today, but over the long term.

While the world economy was slowly recovering, many questions remained regarding the strength of the recovery, its breadth across the economies and sectors, and its sustainability.  Growth prospects of many developing countries remained constrained by the slow recovery of the developed countries, lackluster flows of private capital and by declining prices for non-oil exports. 

The need for sustainable, equitable development, in rich and poor countries alike, should be clear to all, he said.  “But let us also devote our energies to taming development’s worst enemy -- armed conflict, which can extinguish, in days or even hours, years of work to reduce poverty,” he added.

A common vision had been set out in the Millennium Declaration and now in the Monterrey Consensus, he said.  He hoped that the unprecedented level of collaboration between the United Nations, the Bretton Woods institutions and the WTO would continue, “so that our institutions can respond effectively to the new responsibilities that have been placed upon us.”

TREVOR MANUEL, Chair of the Development Committee and Minister of Finance of South Africa, said that the Committee would endeavour to reflect a new consensual approach to development.  He said that in the wake of the recent global economic shocks, the events of 11 September and the ongoing tragedy in Palestine, there had been increased attention to and interest in international economic development.

Stressing the need to enhance technical capacity in many developing countries, he said many intractable problems involving those countries had been pointed out.  They included lack of coherence within governments, as well as between the governments of the recipient and donor countries.  In addition, developing countries were burdened by the conditionality imposed by the donor countries in return for assistance.

Much more must be done to increase the effectiveness of aid, he stressed.  Citing the words of World Bank President James Wolfensohn, who emphasized at the weekend that it was time to move forward from philosophy to implementation, he added his own call for a move from talk to action.

EDUARDO ANINAT, Deputy Managing Director, International Monetary Fund (IMF), spoke for the International Monetary and Financial Committee (IMFC).  He said the IMFC had held its fifth meeting in Washington on 20 April.  The Committee welcomed the sense of solidarity with which the international community had worked together to take decisive actions to maintain financial stability in the face of the economic slow down.  The current global economic challenge was to strengthen the recovery under way, an undertaking that would require continued vigilance. 

He said the advanced economies had the global influence and responsibility to ensure a strong and sustained economic recovery.  In countries where the recovery was more advanced, consideration might need to be given in the months ahead to reversing previous policies.  Many emerging market economies had become more resilient by adopting sounder economic policies, he noted.  Fiscal decisions must be further strengthened and more reforms must be undertaken.  

Improving living conditions throughout the world was a clear priority of the international community, he said.  The Committee, therefore fully supported the Monterrey Consensus.  It was encouraged by new initiatives being undertaken, such as the New Partnership for Africa’s Development (NEPAD).  More open trade was of critical importance for a durable economic recovery and for sustained broad-based growth.  Market access for developing countries must be increased.  The Doha trade rounds should be concluded in a timely manner, he added.

The recovery of low-income countries affected by the recent economic slow down would continue to require attention, he said.  The IMF stood ready to respond.  While progress in the Heavily Indebted Poor Countries (HIPC) Initiative was encouraging, many eligible countries needed to step up their reform efforts.  The IMF had made progress in implementing elements of its action plan to combat money laundering and financing for terrorism, he said.  The agenda ahead of the international community was rich, challenging and encouraging.

EDUARD SOJO GARZA-ALDAPE, Head of the Office of the Presidency for Public Policy, Mexico, said Monterrey had been a meeting point between developed and developing countries, civil society, the business sector and the government sector.  It had been important not only for the occasion and its intensive working sessions, but also as a turning point in the debate on financing for development.  For the first time, that subject had been examined in a comprehensive and integrated fashion, with contributions from all parties involved.

Monterrey was also important as part of a new stage in the global process of development, he said.  A new awareness had been gained of the importance of the economic growth of developing countries.  That process would reach a crucial stage at Johannesburg.  The future must now be built, rather than merely awaited.  It was time to capitalize on the growth of awareness achieved throughout the world.

He said tremendous progress had been made and the dream contemplated in the Millennium Declaration was achievable through the mobilization of all the available resources for the eradication of poverty and the promotion of sustainable development.  Now it was necessary to move from programmes to projects and the establishment of the means to measure progress.  Today's meeting was an opportunity to make proposals that could be examined at the next substantive session of ECOSOC.

After a recess, GERT ROSENTHAL (Guatemala), Senior Vice President of the Economic and Social Council, then gave a report on one of two round table discussions held to discuss the theme of the meeting in an informal setting.  He said the discussion had taken up how to move ahead after the Conference –- what steps to take.  Speakers had, with varying degrees of enthusiasm, endorsed the ideas contained in the Consensus –- both as an instrument to orient the work to be done, and also as what some had called a covenant between the developed and developing countries.  It had also been seen as a new platform that deepened the ties between the United Nations and the Bretton Woods institutions. 

Speakers had stressed that the outcome of the Conference was a milestone for partnership, he said.  The integral, coherent and consistent nature of the commitments embodied in the Consensus had been highlighted, as had the responsibilities incumbent upon developing countries.  The importance of the international community directing their support through ODA, foreign direct investment and others had also been underlined.  The need for an open and transparent trade regime had been emphasized by all. 

The importance of embarking on a round of negotiations to truly actualize the Doha commitments had also been stressed, he said.  Bringing the Council and the General Assembly, civil society and others into the follow-up process had also been stressed.  The tone of the discussion had been very constructive. 

DUMISANI SHADRACK KUMALO (South Africa), Chair of the second round table, reported on its discussions, saying suggestions had been made that, in order to make the ECOSOC spring meetings more beneficial, the dialogue should be structured in such a way as to make the issues for discussion more specific.

Another point raised was that structural policies must lead to a reduction in trade barriers and an end to subsidies in the North that caused distorted trade in the South, he said.  A new approach to policy-making was a critical step in signaling a new form of engagement involving the United Nations, the Bretton Woods institutions, civil society, the business sector and non-governmental organizations.

Implementation of the Monterrey Consensus was an enormous responsibility for all concerned, he said.  Developing countries must address policy reform, attract foreign investment and create an enabling environment for it.  Developed countries must increase official development assistance and foreign direct investment, as well as assist in capacity-building.

He said the situation in Africa had received special attention, especially the issues of poverty, HIV/AIDS and the New Partnership for Africa’s Development (NEPAD) initiative, which had received strong endorsement.  In addition, many participants had emphasized the need for measuring progress and to focus on outcomes rather than processes. 

EVELYN HERFKENS, Minister of the Netherlands, noted that there had been a great deal of talk about the need to build on the spirit of Monterrey, while at the same time another conference was being prepared -- as if, in a way, Monterrey had not happened.  The outcome of Monterrey must be implemented, she stressed, noting that much had been achieved there.

A very good transparent mechanism to monitor, country-by-country, the degree to which development goals were being met must be instituted, she stressed.  Building upon the capacities of countries themselves was key.  She called on the United Nations Development Programme (UNDP) and others to build monitoring mechanisms into their poverty reduction strategies.  She hoped the mechanisms could come about with the input of the financial institutions and that peer reviews would also be part of the process.  Peer review mechanisms in the North should be strengthened.  She was looking forward to the elaboration of a mechanism, and good debates thereon.

Mr. ANINAT, Deputy Managing Director of the IMF, said Monterrey had been a success and the Consensus defined the right priorities, with the principles of fair responsibilities, on the one hand, and mutual commitments, on the other.

There were no easy solutions or formulas for quick fixes, he pointed out.  Growth was essential, as was the stability required for its consolidation.  In addition, better instruments and more focused social policies were needed to pursue and implement domestic and international initiatives.  It was necessary to concentrate on the areas of greatest possible return.

SHENGMAN ZHANG, Managing Director of the World Bank, said he was quite impressed with the degree of consensus and convergence that had emerged.  He could feel the international community’s expectations of all the international financial institutions.  The key message of the gathering was to “implement, implement and implement”.  

He assured participants that the Bank wanted to make concrete progress on the goals that had been forwarded.  They would proceed with the challenge of harmonizing operating procedures.  Very clear and specific timetables would be laid out.  The Bank wished to do its part in ensuring better development opportunities, in, among other ways, delivering better on the HIPC debt initiative.  It would also do its part to ensure that the Doha process was a success.  In conclusion, he said the Bank would work with all and would stay engaged through effective monitoring. 

NACER BENJELOUN-TOUIMI, Senior Adviser, WTO, said a great myth had been highlighted by the organization’s Ministerial Conference held in Seattle that the WTO was not transparent.  On the contrary, it was an open body in which decisions were taken by consensus.  Developing countries were well organized to express their interests.

He said that one key to success was technical assistance and capacity-building.  The WTO had been doing a lot on that front.  There was a commitment to build the capacity of developing countries, so that they would be able to participate in the negotiations.  However, without the participation of the World Bank and the regional banks, the WTO would not be able to play its own part.

Mr. SIMONOVIC (Croatia), President of the Economic and Social Council, expressed pleasure at having the WTO on board for future spring meetings.  He thanked all the participants and was grateful to the lead discussants,

representatives of non-governmental organizations and the business community for their participation. 

He said it was clear that there was a firm commitment to realizing the Millennium Development Goals.  It had been pointed out that staying engaged in the Monterrey process meant moving from philosophy to action.  In that regard, improved interaction between stakeholders with regard to certain practical activities had been seen.  Speakers had put forward the idea that the Consensus should represent a sort of performance contract.  There had been a shared view that there must be transparency regarding the overall progress of implementing the Millennium Development Goals, and that a time framework would be very useful.  Conclusions from the day's proceedings would be prepared and distributed in written form. 

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