Sixty-first General Assembly

Second Committee

9^th & 10^th Meetings (AM & PM)

delegates in Second Committee stress importance of fulfilling monterrey

commitments to improve lives of world’s poorest people

 

The global community must bolster its efforts to meet the financing commitments laid out in the Monterrey Consensus four years ago if the living standards of the world’s poorest citizens were to be improved, Second Committee (Economic and Financial) members said today.

Partnerships were essential to that task, delegates stressed as the Committee considered the follow-up to and implementation of the outcome of the 2002 International Conference on Financing for Development, held in Monterrey, Mexico.  Developing nations retained the chief responsibility for raising resources to achieve their development goals while nations with more advanced economies met their financing obligations to support their efforts.  At the same time, developing nations needed to beef up their efforts to fight corruption and lay out good governance measures as international financial institutions made the reforms that were crucial to handing less developed nations a greater voice in their affairs.

Committee members expressed their support for the accord that emerged from the Monterrey Conference and welcomed the Qatar Government’s offer to host a follow-up meeting in 2008 or 2009 that would examine the implementation of the Monterrey Consensus.  Qatar’s representative described Monterrey as a uniquely useful event for having gathered together not only Heads of State and Government, but also officials from the World Bank, the World Trade Organization, the International Monetary Fund (IMF) and civil society.

Indonesia’s representative stressed that a renegotiation of the pledges made at Monterrey was not needed and called on richer nations to meet their commitments on debt relief and more open markets, especially for goods from the developed world.  The United States delegate noted that good governance wasat the heart of the development process and the promotion of competitive domestic markets was also important.

Uganda’s representative underscored the need for efforts to unify the global monetary, financial and trading systems to more smoothly solve the debt problems of developing countries.  And, as a way to begin reforming global financial institutions so they better reflected today’s realities, Malaysia’s delegate called on the richer nations to limit their claims for higher quotas so that developing countries could have a stronger voice.

Anwarul K. Chowdhury, Under-Secretary-General and High Representative for the Least Developed Countries, Landlocked Developing Countries and Small Island Developing States, said the least developed countries had actively striven to improve their situation and mobilize domestic resources as they worked toward policy reforms and improved governance.  Yet even with improvements in official development assistance (ODA) and debt cancellation, they were unlikely to achieve the targets and objectives agreed in the Brussels Plan of Action.  Regarding remittances, they were not a substitute for increased aid and foreign direct investment (FDI).

Also speaking today were representatives of South Africa (on behalf of the “Group of 77” developing countries and China), Guyana (on behalf of the Rio Group), Saint Vincent and the Grenadines (on behalf of the Caribbean Community, or CARICOM), Russian Federation, India, Cuba, Bangladesh, China, Pakistan, Switzerland, Norway, Fiji, Iraq, Jamaica, Ukraine (on behalf of Georgia, Ukraine, Azerbaijan and Republic of Moldova, or GUAM countries), Nepal, Zimbabwe and Libya.

The Permanent Observer for Holy See also spoke.

Oscar de Rojas, Director of the Financing for Development Office in the Department of Economic and Social Affairs, introduced the Secretary-General’s report on the follow-up to and implementation of the outcome of the International Conference on Financing for Development.

The Second Committee will meet again at 10 a.m. tomorrow, Wednesday 11 October, to consider strengthening of the coordination of humanitarian and disaster relief assistance of the United Nations, including special economic assistance.

Background

The Second Committee (Economic and Financial) met today to discuss the follow-up to and implementation of the outcome of the International Conference on Financing for Development.

Before the Committee was the Secretary-General’s report on Follow-up to and implementation of the outcome of the International Conference on Financing for Development (document A/61/253), which discusses the mobilization of domestic resources, official development assistance (ODA) and private financial flows in support of development.

The report notes that the 2005 World Summit Outcome commits all developing countries to plan better ways to mobilize domestic resources.  For low income countries, poverty reduction strategy papers -- a requirement for concessional assistance from the World Bank and International Monetary Fund (IMF), and a basis for the provision of debt relief under the Heavily Indebted Poor Countries (HIPC) Debt Initiative -- are developed to that end.  Some 46 countries had poverty reduction strategy papers in place out of the 50 circulated as of June 2006.

According to the report, external private capital flows to developing countries stood at around $165 billion in 2005, with a substantial increase of $40 billion to countries with economies in transition from the previous year.  But that inflow could become constrained as a result of volatility in the global financial market, should “a disorderly unwinding of global imbalances” take place.  Encouragingly, some developing countries -- mainly middle-income countries and India -- had become contributors of foreign direct investment (FDI), representing an opportunity for countries that typically receive marginal sums of FDI to improve their access.  Meanwhile, the World Bank has begun providing technical assistance to developing countries so as to improve their investment climate and mitigate volatility, as agreed in the Monterrey Consensus (2002).

The report highlights the link between development, finance and trade, stressing the importance of resuming the Doha Round of World Trade Organization negotiations, which were suspended in July 2005.  As for development financing, the percentage of income allotted to ODA is not sufficient to reach the $150 billion needed to achieve international development goals.  But efforts to encourage developing-country ownership of development strategy by “untying” aid -- as agreed in the Paris Declaration on Aid Effectiveness -- continues apace, and are being monitored by the Organization for Economic Cooperation and Development (OECD).

Persistent unsustainable debt in some developing countries had led to an enhanced HIPC Debt Initiative in 2004, the report says, as well as to a proposed cancellation by the Group of Eight (G-8) industrialized nations, the IMF, the International Development Association and the African Development Fund of 100 per cent of their claim over the poorest countries.  The inability of HIPC graduates to remain free from debt produced the conclusion that reducing debt alone was not sufficient to create debt sustainability; better fiscal management and improvements in financing terms were also needed.  To improve international policy coordination, the IMF agreed to establish a new process of multilateral consultations to enhance the international monetary, financial and trading systems in support of development.

Also before the Committee was a Summary by the President of the Economic and Social Council of the special high-level meeting of the Council with the Bretton Woods institutions, the World Trade Organization and the United Nations Conference on Trade and Development (New York, 24 April 2006) (document A/61/81-E/2006/73), which discusses the global landscape of development cooperation, such as the next steps in fulfilling the development dimension of the Doha work programme; building on current initiatives to enhance debt sustainability, such as the Multilateral Debt Relief Initiative (MDRI); and supporting the development efforts of middle-income developing countries.

The report says that many participants reiterated the importance of trade as an engine of growth, and that a task force was created to discuss how to implement “Aid for Trade”, which was given official recognition at the World Trade Organization Ministerial Conference in Hong Kong as a key instrument to integrate developing countries into the international trade system.  To promote debt sustainability, it was agreed that the modalities of the HIPC Initiative needed improvement so that the private sector could adequately price risk and consider new investments.  Meanwhile, middle-income countries needed assistance to enhance their macroeconomic stability because past crises had led to high social and economic costs.

Introduction of Reports

OSCAR DE ROJAS, Director, Financing for Development Office, Department of Economic and Social Affairs, introduced the report of the Secretary-General on the Follow up to and implementation of the outcome of the International Conference on Financing for Development (document A/51/253), reiterating its message that a country’s own domestic resources, such as savings and national investment, should be viewed as the first source of financing for development.  To enhance the effectiveness of those resources, it was necessary to provide guarantees to private investors that market regulations were reasonable, just, transparent and stable.  Well-defined development policies must be in place and clearly outline the resources needed for each action to be taken.  To make the economy more attractive to foreign investors was another responsibility of developing countries, to be directed to the transport, energy and communications sector, for example.

He said ODA estimates demonstrated that the developing world was far from receiving the $150 billion it needed annually to achieve the Millennium Goals.   Any increases in aid between now and 2015, therefore, should be channelled to the poorest countries as a priority, and any increase in South-South cooperation would be welcome.  The United Nations would continue to monitor efforts to increase aid effectiveness, as agreed by 50 partners at the high-level forum in Rome on that subject.

On innovative financing, he said concrete pilot projects to generate resources for nutrition and health projects had been set up, such as the solidarity airport tax and the UNITAID health facility.  To help countries suffering from unsustainable debt, a policy coordination framework would be established on the basis of the Basel II framework, alongside moves to improve governance in the international financial institutions.  For its part, the United Nations had done much to stay engaged: in April, the ninth high-level session of the Economic and Social Council had been held, with the participation of financial institutions, the Executive Directors of the World Bank and IMF, members of civil society and the private sector.

In the report’s final comments, the Economic and Social Council President proposed that consultations be held with all stakeholders on the selection of themes for future meetings, he said.  That important meeting had been held after much preparation by people originally involved in the Monterrey meeting.  The Financing for Development Office had also organized seminars and held consultations, expert meetings and panels.  For the period 2006-2007, the topics it would focus on would include how national development banks could better promote development; harnessing the energy of the diaspora to speed up economic growth; and increasing access to basic utilities.  Between 2008 and 2009, an international follow-up conference, to be hosted by Qatar, would be held on further follow-up to the Monterrey Consensus.  It was important to begin preparations for that conference straight away.

Questions and Answers

Mr. ROJAS, asked how the mechanism to follow up the Monterrey Consensus could be strengthened, said that compared to other major conferences, the follow-up mechanisms for Monterrey were very weak and the Department of Economic and Social Affairs had no functional commission to turn to, and only one major meeting had been held in the spring.  A high-level meeting was held every two years but it produced only a summary, not an outcome document.  The Financing for Development Office agreed that it would be productive to discuss ways to strengthen the follow-up process, especially after all the attention the conference had received from world leaders, particularly the 2005 World Summit.  The topic was also very important to Member States.

Statements

ANWARUL K. CHOWDHURY, Under-Secretary-General and High Representative for the Least Developed Countries, Landlocked Developing Countries and Small Island Developing States, said the least developed countries had actively striven to improve their situation and mobilize domestic resources as they worked towards policy reforms and improved governance.  Yet even with improvements in ODA and debt cancellation, they were unlikely to achieve the targets and objectives agreed in the Brussels Plan of Action.  The quest for adequate and predictable external resources for their economic and social development therefore continued and the least developed countries, especially the heavily indebted ones, remained net recipients of resource transfers during a time when net outward transfers had prevailed over the past decade.

Turning to the question of remittances, he acknowledged their positive development impact on the gross domestic product (GDP) of the least developed countries and their role in reducing poverty, pointing out, however, that they were not a substitute for increased aid and FDI.  The Office of the High Representative welcomed the specific commitments made by many development partners and noted that the envisaged increase in ODA had a built-in component of the Brussels target for least developed countries to the tune of 0.15 per cent to 0.20 per cent of GDP.

PETER LE ROUX (South Africa), speaking on behalf of the “Group of 77” developing countries and China, said more political will was needed to help developing countries realize their development goals.  The Group of 77 once again called on all developed countries for decisive action on every commitment made at major United Nations summits and conferences.  All senior executives of the Bretton Woods institutions, the World Trade Organization and the United Nations Conference on Trade and Development (UNCTAD) should do everything possible to continue engaging in meaningful dialogue on increasing financing for development. 

He said that although some issues pertaining to financing for development might be beyond the realm of the United Nations, it must nevertheless, as the primary intergovernmental organization in which developing countries had equal voice and participation, play a significant role in shaping the global economic environment.  A follow-up international conference to Monterrey was needed in order to take stock of achievements and outstanding work.  Qatar’s offer to host such a conference was welcome, and Member States should now begin preparations in an inclusive and transparent manner.

GEORGE TALBOT (Guyana), speaking on behalf of the Rio Group, said private financial flows represented an important source of external resources for developing countries and it was worrisome that they had turned into net remitters of resources.  As a result, there was a reduction in the volume of private FDI in infrastructure and basic services.  Meeting the Millennium Goals would require more funding and all interested parties were invited to comply fully with paragraph 41 of the Monterrey Consensus, which stated that a substantial increase in ODA would be required to attain the Goals.

Noting the progress made in exploring innovative sources of financing for development since the Monterrey Conference, he said further progress was expected.  The link between financing for development and attainment of the Millennium Goals could not be overemphasized, and the implementation status of the Monterrey Consensus should be reviewed thoroughly as soon as possible.

MARGARET HUGHES FERRARI (Saint Vincent and the Grenadines), speaking on behalf of the Caribbean Community (CARICOM), said the 2005 World Summit had reaffirmed the Monterrey Consensus as the reference point for a meaningful global partnership and a key to achieving internationally agreed development goals, including the Millennium Goals.  The focus on the theme of the general debate, “Implementing a Global Partnership for Development”, also showed the importance of addressing the challenges of implementation in the context of financing for development.

She said CARICOM recognized the need and importance of innovative sources of financing for development, which were complements to, not substitutes for, the fulfilment by developed countries of their obligations with respect to attaining the 0.7 per cent target.  The regional body urged a closer examination of innovative proposals for new and additional sources of financing that would complement ODA and not impose any burden on developing countries.  CARICOM remained committed to advancing the implementation of the Monterrey Consensus and welcomed the offer by the Government of Qatar to host a follow-up international conference.

JASON LAWRENCE (United States) said his country had met its pledge to increase foreign assistance by 50 per cent over 2000 levels by 2006, and it had done so three years early.  It had created a Millennium Challenge Account through which it channelled aid to countries that governed well, invested in health and education, and provided a positive and open economic climate.  The account covered 23 countries so far to the tune of $2.1 billion, and was on track to commit another $900 million before the end of 2006.  Meanwhile, payments for goods imported from developing countries stood at $487 billion and private investment at $146 billion.

Even so, he stressed a key point from Monterrey -- that developing countries must bear the primary responsibility for their own development.  Good governance was at the heart of the development process, and by using the World Bank’s Doing Business report, countries could learn where they were weak in areas that were critical for attracting investment.  Further, domestic savings in developing countries stood at $3.1 trillion versus only $106 billion in ODA from all sources, which underscored the need to focus more on domestic resource mobilization.

Promoting competitive domestic markets was also important, he said, noting that at the Doha trade negotiations, the United States had exercised its leadership by committing to remove all agricultural subsidies as soon as other countries were willing to join it.  Because some 70 per cent of tariffs imposed by developing countries were imposed on each other, they, too, had a role to play in freeing up trade.

ALEXANDER ANANIEV (Russian Federation), noting the progress in mobilizing internal domestic resources and private financial flows, said that, at the same time, he shared the Secretary-General’s concern over the halt in the progress in trade, which promised developed countries more stable advantages.  International trade was a dynamic factor in promoting development and reducing poverty and the stalling of the Doha trade talks impacted those efforts.

He said his delegation favoured consistent follow-up activity, such as the spring meeting of the Economic and Social Council with the Bretton Woods institutions and United Nations agencies and wished to see a further strengthening of the follow-up process.  The Russian Federation also favoured the participation of civil society and the private sector in strengthening the global financial and trade systems.  It supported the objectives of the Monterrey Consensus and would play a more active role in international development assistance.

C. K. CHANDRAPPAN ( India), aligning himself with the Group of 77 and China, said the Monterrey Consensus emphasized the role of the State in socio-economic development, which should not be limited to merely providing a favourable macroeconomic, legal and regulatory framework for private-sector growth and to attracting investments.  It should also invest substantially in human development and basic social infrastructure.  The World Bank, for its part, should remain steadfast in its mission in favour of a world free of poverty, keeping in mind that governance was characterized by the historical and contextual specificities of countries.

He said the sovereign functions of the State could not be undermined by regimes that eroded its autonomy, noting that lower overall tariff reduction commitments were essential to securing livelihood security.  What was needed was a way to address the manner in which different policies affected the development process, and to mobilize greater political consensus on improving international decision-making systems.  The United Nations should encourage steps to initiate a second stage of IMF quota reform, and play a predominant role in both setting and guiding the international macroeconomic agenda.  Greater synergy was needed between the annual meetings between the Economic and Social Council and the Bretton Woods institutions.

ATIYANTO PRAYONO ( Indonesia) said the report showed the need for the generation of funds to provide income for the achievement of the Millennium Development Goals as well as the need to correct the imbalances in financial flows.  Despite positive trends, there was much suffering in the world and development was powerless without finance.  In the present session, the Committee could work to change the situation.  Member States needed only to implement the commitments made at various summits, such as the 2005 World Summit Outcome and the Monterrey Consensus.

Calling on both developing and developed countries to follow through on their noble commitments, he stressed that it was not necessary to renegotiate them.  The developed countries should open their markets to goods, including agricultural produce, from the developing world; provide debt relief for low- and middle-income countries; direct greater flows of FDI to the developing countries; and share technology with the developing world.  The developing countries must ensure good governance and fight corruption.

LLANIO GONZALEZ ( Cuba), aligning himself with the Group of 77 and China, said the Monterrey Consensus acknowledged the need to increase stable and predictable financial flows to developing countries, yet they were net issuers of financial resources to the rich and industrialized world.  Meanwhile, developed countries spent nearly a billion dollars on agricultural subsidies on a daily basis -- three times as much as the amount devoted to ODA.  Indeed, the developed world needed more than ever to honour its commitments without conditions that subordinated the development needs of the recipient countries.

Underscoring the importance of establishing a mechanism for the supervision of and follow-up to ODA commitments, he said it was time for the international community to reflect on the situation faced by developing countries.  Most indebted poor countries continued to receive the smallest amounts of foreign investment; they were marginalized from the world economy; and their external debt continued to grow.  The principles of cooperation, selfless assistance and mutual benefit should be upheld.

IFTEKHAR AHMED CHOWDHURY (Bangladesh), aligning himself with the Group of 77 and China, said trade was a powerful engine of growth but the goods and services that the least developed countries could supply competitively was limited.  Even if they could export all their products, that would comprise a mere 2.4 per cent of global trade.  Duty- and quota-free market access was needed for all goods from the least developed countries, as was the elimination of arbitrary barriers and exemption from anti-dumping and similar measures.  Compensation should be given in cases where preferences were eroded.  Tools like Aid for Trade should be used to help the least developed countries build their capacity for international trade.

He said more use should be made of microcredit in addressing poverty, noting that only 5 per cent of total demand for microfinance was being met.  The international donor community should do more in the microfinance industry to help poor countries achieve their development goals.  So far, $1.5 billion had been committed to microfinance.

LIU ZHENMIN (China), supporting the Group of 77 statement, said financing had become a more prominent issue with the increasing expansion of globalization and ways to handle it appropriately were vital to achieving the Millennium Development Goals on time.  National Governments should take primary responsibility for financing for development, but international support was also essential.  China emphasized several points: commitments on increased aid, debt relief and market access should be fulfilled; the international economic, monetary and trade systems should be reformed to remove the structural obstacles to financing for development; new types of financing mechanisms should be explored as sources of development aid were increased and diversified; and partnerships should be encouraged.  China welcomed Qatar’s offer to hold a follow-up conference to Monterrey and would continue to pursue a basic State policy of opening up.

JAMIL AHMAD, Director (United Nations), Ministry of Foreign Affairs of Pakistan, aligning himself with the Group of 77 and China, said tied aid had reduced the value of bilateral assistance by at least $5 billion and the key indicator of external debt sustainability had worsened in 11 of 13 post-completion point HIPC countries.  More resources should therefore be channelled through national budgets to encourage full alignment with the needs of recipient countries.  Furthermore, debt cancellation must be much more broad and generous for the poorest countries.

He said FDI should be more consciously directed towards the weaker economies, for example through investment guarantee schemes.  The international financial system must enhance the participation of developing countries in order to ensure that a larger percentage of international liquidity was allocated to developing countries.  Finally, despite the current impasse, efforts should be made to revive the Doha Round of trade negotiations, and to review seriously the progress made towards implementing the Monterrey Consensus.

MOHAMAD SHAHRUM OSMAN ( Malaysia), aligning himself with the Group of 77 and China, said the present General Assembly session was critical for the issue of financing for development.  The international community needed to strengthen efforts to fulfil the commitments made four years ago after the adoption of the Monterrey Consensus.  Reform efforts, including attempts to strengthen the Economic and Social Council, should not detract from the key role of financing in development issues.  The proposed Development Cooperation Forum and Annual Ministerial Review should complement existing financing follow-up mechanisms.

Turning to the revision of the IMF quota system, he said the first phase of quota reform had included only one country from the Group of 77, some of whose members had seen a reduction in their quotas.  Malaysia’s quota, for example, had been reduced from 0.7 per cent to 0.68 per cent.  However, the real test of the IMF reform agenda was in the second phase and Malaysia asked advanced countries to limit their claims for higher quotas so as to allow developing nations a greater voice in representation, reflecting today’s realities.

THOMAS GASS ( Switzerland) said aid effectiveness was a high priority and that the Paris Declaration should be used as a code of conduct for all development actors including private foundations, whose contributions were growing.  Indeed, private financial flows from such foundations should be analyzed since they had increased significantly over time and care should be taken not to choke them off inadvertently as international financial institutions and others engaged in coordination efforts.  Meanwhile, the Aid for Trade mechanism should be extended to a wider circle of beneficiaries to include not only the least developed countries but also low- and lower-middle-income countries.

He said it was also essential that Governments widen their tax base or pursue progressive taxes in an effort to raise more domestic resources for development.  For the least developed countries, a balanced debt level should always be maintained so that freed-up resources could be better used for development.  Though Switzerland’s development aid would increase less rapidly in the coming years because of its current programme of financial stringency, the Government planned to increase the percentage allocated to aid after 2008.

CELESTINO MIGLIORE, Permanent Observer for the Holy See, agreed with the report’s emphasis on fighting all forms of corruption and the importance of a sound governance framework and strong institutions able to raise resources.  The Holy See agreed also that low-income developing countries should receive particular attention since they had the greatest difficulty in mobilizing domestic resources and received little FDI.

Poverty reduction strategy papers prepared by developing countries through participatory processes could help low-income developing nations reach the Millennium Goals and had an important role in poverty reduction, he said, encouraging all global institutions committed to reducing poverty to stay actively involved and to monitor closely the progress being made by each developing country towards attaining the Millennium Goals.

OLA BREVIK ( Norway) said “getting the basics right” -- to ensure private-sector entrepreneurship and growth -- was necessary, but not sufficient to achieve development.  Active redistributive policies were also crucial.  Policies to foster growth and ensure fair distribution were mutually reinforcing and ensured the social cohesion and stability necessary to create an attractive investment climate.  Growth with fair distribution depended on good governance encompassing not just the rule of law and fighting corruption, but also respect for human rights and due attention to the social and environmental impacts of policies.  On debt, he said Norway was prepared to make strategic use of unilateral debt cancellation in 2007.  For example, seven countries had outstanding ship export debts owed to Norway and it planned to cancel the debt of all of them save Myanmar and the Sudan until those two countries qualified for multilateral debt relief operations.  International debates on “illegitimate debt” should continue with a focus on creditor responsibility.  As the leading country of the Leading Group on Solidarity Levies to Fund Development, Norway found such debates invigorating.

FILIMONE KAU (Fiji), aligning himself with the Group of 77 and China, said he hoped the same spirit of cooperation that had given genesis to the Monterrey Consensus would prevail now during its implementation phase.  As a small island developing State with a highly vulnerable economy, Fiji reiterated that the achievement of international development goals would require domestic efforts as well as external assistance.  The Monterrey Consensus emphasized the critical and crucial role of trade in development partnerships and the strong commitment to scaling up ODA to developing countries, he said.  ODA accounted for less than 5 per cent of Fiji’s national budget and development partners should boost their level of support for Government strategic plans.  The Monterrey Consensus needed a follow-up to review its implementation and the General Assembly together with Member States should begin preparing for the important follow-up conference that Qatar had offered to host.

DINDAR ZEBARI ( Iraq) said the International Compact with Iraq, chaired jointly by Iraq and the United Nations with the support of the World Bank, had been launched in July to help channel international assistance to his country for the next five years.  It would use that assistance for political, security and economic reform, as well as for carrying “fiscal devolution” to local and regional authorities.  It would also create conditions to encourage private savings and strengthen commercial banks, entailing private ownership and competition in the banking sector.  Further, it would implement an oil and gas strategy, involving reform of the permit structure, the formation of national and regional oil and gas companies and the raising of funds to support capacity-building and training.

The Kurdistan Regional Government, meanwhile, had suggested agriculture and tourism as two ways to diversify the economy, calling for infrastructure to be developed around religious cities and holy sites, among other places, he said.  The Iraqi federal authorities and the Kurdistan Regional Government also foresaw action that included the construction of water plants and pipeline networks; the provision of adequate water resources; and the maintenance of existing pumping stations.  Education and health were other areas on which to focus.  The International Compact was the best channel to provide the Iraqi federal authorities with the support they needed to achieve those goals.

DIEDRE MILLS ( Jamaica), aligning herself with the Group of 77 and CARICOM, expressed concern about the increased net outward transfer of financial resources from the developing to the developed world while FDI flows remained concentrated in a few countries.  The mobilization of financial resources was particularly challenging as FDI flows to Latin America and the Caribbean declined.

She said her country was pleased with a decision by the Economic and Social Council to let its President begin consultations on enhancing the impact of its special meeting with the Bretton Woods institutions, the World Trade Organization and UNCTAD.  The outcome of that meeting should be reconsidered so as to maximize the benefits gained from such exchanges and ensure a more practical and action-oriented outcome beyond a Presidential summary.  That would help produce a more comprehensive and coherent approach to crucial development issues.

ANDRIY NIKITOV ( Ukraine), speaking on behalf of the GUAM countries ( Georgia, Ukraine, Azerbaijan and the Republic of Moldova), said sustained development required increases in FDI and efforts were underway in the GUAM member countries to improve investment legislation and ensure equal opportunities for domestic and foreign investment.

To ensure the stability of the international financial system, he said, the GUAM countries would strengthen the national banking infrastructure with an eye to achieving greater transparency and increased participation in decision-making by transition economies.  World Trade Organization members should help economies in transition with their accession to that body and improve its transparency.  The international community should recognize the special development needs of transition economies.

DINESH BHATTARAI ( Nepal), associating himself with the Group of 77 and China, said he appreciated the commitment that the international community had made at Monterrey as well as the offer by Qatar to host the first follow-up conference.  All stakeholders should participate in the preparatory work for the review.

Underscoring the need for longer-term and more predictable aid flows, he called for the increased channelling of ODA through national budgets.  The ownership of development activities should be left to recipient countries, yet the question of transparency, predictability and ready availability of aid was important in terms of aid effectiveness and harmonization.  Nepal had given high priority to foreign investment for industrial development and wished to boost the role of the private sector in industrial development and the development of entrepreneurs.  Foreign investment procedures had been streamlined and simplified to make them more transparent and business-friendly.

BONIFACE CHIDYAUSIKU (Zimbabwe), associating himself with the Group of 77 and China, voiced appreciation for pledges by developed countries to achieve the target of 0.7 per cent of gross national income as ODA, but pointed out that concerted effort was needed to brighten the gap between rhetoric and practice.  Mechanisms were needed to effectively measure aid flows, and all the unsustainable debt of developing countries should be eliminated.  Since only enhanced exports could lead to a sustainable increase in domestic resources in developing countries, the developed world should remove the subsidies on its agricultural products so as to level the playing field.

While acknowledging that national Governments should shoulder the primary responsibility for developing their countries, he said international cooperation should support, not hamper, national development programmes.  Aid should be politicized and the international community should reject the practice of imposing regulations with extraterritorial impacts and other coercive economic measures against developing countries.  In Zimbabwe, support from international financial institutions had been blocked and investment inflows restricted, including the suspension of financial support from the IMF and World Bank, all on account of political differences.  The country was left to grapple with the challenges posed by HIV/AIDS, droughts, floods and other problems.  With international support, Zimbabwe could do better.

MOHAMED ALMABROK ( Libya) said a truly multilateral financial system was needed to guarantee financing for development.  There was a need to emphasize a global financial system that would allow developing countries to play a role in their own development and participate in international financial institutions.

He expressed the hope that developed countries would respect the commitments they had made to developing nations and welcomed efforts to create a follow-up mechanism to Monterrey as well as Qatar’s offer to host a follow-up conference.  Libya also stressed that the special needs of Africa should be considered as it was very important to integrate the continent into the world economy.

MOHAMMED SULTAN AL-KUWARI (Qatar), thanking those who had voiced support for his country’s offer to host a follow-up conference to Monterrey, said a dynamic business sector required good governance, sound democratic institutions and a secure environment.  Efforts by developing countries to achieve those goals in the face of so many challenges were commendable.  The Group of Eight industrialized nations was to be commended for its efforts to forgive debt and increase ODA.

But of all the tools used to generate growth, trade was the most significant because the income derived from it was a sustainable form of financing for development, he stressed.  For that reason, a non-discriminatory international trade structure was needed and hopefully, there was enough political will and flexibility to resume the Doha trade talks.

Describing the International Conference on Financing for Development as a uniquely useful event, he said that was not just because of the participation of kings and other Heads of State and Government, but also due to the presence of the World Bank, World Trade Organization, IMF and civil society.  Qatar supported all international initiatives on development, and for that reason had decided to host the follow-up meeting to the Monterrey Conference.  Hopefully, the Committee would be able to name a date for it soon.

HUSNIYYA MAMMAODOVA (Azerbaijan), noting the continued efforts by developing countries to implement nationally owned development strategies through sound macroeconomic polices and the rule of law, emphasized that a core principle of the Monterrey Consensus was that each country had primary responsibility for its own economic and social development and that the international community should support those efforts in a timely and efficient manner.  Azerbaijan welcomed the efforts of the international financial institutions, particularly the World Bank, to improve their services as they strengthened investment frameworks and climates.  Azerbaijan was making headway during negotiations on its accession to the World Trade Organization and was continuing its domestic reforms in the areas of tariffs, customs, taxation, banking and finance.  Its challenge was to develop the non-oil sector of the economy and promote labour-intensive industries.

BENEDICT L. LUKWIYA (Uganda), aligning himself with the Group of 77 and China, said the Monterrey Consensus was built on the premise that the growth process in developing countries was heavily influenced by external factors, among which were ODA and debt.  Efforts were required to make the international monetary, financial and trading systems more coherent and consistent so as to bring about effective solutions to debt.

Meanwhile, ODA should rise by $75 billion by the end of 2006 if internationally agreed targets were to be reached, he said.  To a large extent, current increases in ODA went into debt relief and, in truth, countries could only benefit from such “aid” if they did not have any debt servicing to deal with, he said.  Another area where international resources should be targeted was trade.  Major development partners should open up their markets and remove protective subsidies.  South-South trade should also become more open, with the removal of tariff barriers between developing countries themselves.

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