Sixty-eighth General Assembly

Plenary

31^st Meeting (AM & PM)

Channel Funds to Development, General Assembly Urged

 

As High-Level Dialogue on Financing Concludes

 

Round-table Discussions Held during Two-day Event at Headquarters

A broad range of stakeholders’ commitments, criticisms and concerns had built momentum towards redoubling efforts in achieving the Millennium Development Goals and towards advancing the United Nations development agenda beyond 2015, said General Assembly Vice-President Octavio Errázuriz today at the close of the High-level Dialogue on Financing for Development.

Over the two-day event, representatives of Member States, civil society and the private sector delivered statements and participated in round tables and an informal interactive dialogue that examined elements of how to effectively channel funding to promote and bolster development.  (See Press Release GA/11438)

Delivering a statement on behalf of John Ashe ( Antigua and Barbuda), President of the General Assembly, Mr. Errázuriz thanked the participants for their valuable contributions and constructive interventions.  Outlining the key points raised through the Dialogue, he noted that a changing world required an adapted conceptual framework to deal with new circumstances and challenges, particularly those related to the integration of the social, economic and environmental dimensions of sustainable development.

He also noted calls for an early conclusion to the World Trade Organization Doha Round of trade negotiations and for countries to fulfil their official development assistance (ODA) commitments to bolster development.  He said many delegations also called for the Follow-up International Conference on Financing for Development to be held before the end of 2015 in order to best contribute to the post-2015 agenda.

“I have also sensed optimism that we can come together to meet the challenges of sustainable development,” he said.  “The resources are there, they just need to be allocated effectively.  This requires a true multi-stakeholder effort and global partnership encompassing all stakeholders, in order to expedite the mobilization of financial resources, public and private, at the national, regional and international levels, for sustainable development.”

The General Assembly will meet at 10 a.m. on Wednesday, 9 October, to take up a report of its Fifth Committee (Administrative and Budgetary) and other matters to be announced.

Round Table II

Jeremiah Nyamane Kingsley Mamabolo, Permanent Representative of South Africa, chaired the round table on “Mobilization of public and private financing, including foreign direct investment and other private flows, and fostering international trade and sustainable debt financing, in the context of financing for development”.  It featured the following panellists: Mansur Muhtar, Co-Chair, Intergovernmental Committee of Experts on Sustainable Development Financing, and Executive Director, World Bank Group; Shamshad Akhtar, Assistant Secretary-General for Economic Development; Erik Berglöf, Chief Economist and Special Adviser to the President of the European Bank for Reconstruction and Development; Renate Hahlen, Head of Unit, Aid and Development Effectiveness and Financing, Directorate General for Development and Cooperation, EuropeAid, European Commission, Brussels; and, Bruce Greenwald and Robert Heilbrunn, Professors of Finance and Asset Management, Columbia Business School.

Mr. MAMABOLO said evidence suggested that financing needs for the economic, social and environmental dimensions of sustainable development were high and that estimated financing needs represented a global savings of around $17 trillion in 2012.  The challenge rested in facilitating a financial system that directed a portion of that investment toward sustainable development.  As financing needs for sustainable development far outpaced public sector resources, the focus must be on both private sources and public resources, domestically and internationally.  The public sector had an important role to play in incentivizing private investment into areas of global concern.  Institutional investors had been increasingly looked at as a potential source for long-term financing for sustainable development, yet investments had been limited due to a range of factors, including weak regulatory structures.  Foreign direct investment flows had also been falling globally.  Domestic resource mobilization was critical and should be driven by inclusive and sustained economic growth.  An important question he asked was how developing countries could raise their capacity to collect public revenues.  Current concerns include illicit financial flows, the potential of international trade as a source of financing development and sovereign debt.

Mr. MUHTAR said in view of the change in the development landscape and the global financial outlook, it was clear traditional ODA was coming under increased pressure, ever burdened by the economic crisis.  Other sources, including from the private sector and philanthropists, were now being directed towards development.  While it was important to recognize the weight of public resources, other sources needed to be leveraged.  The World Bank had been examining how to do so through existing and new channels.  More could be done to benefit from the private sector’s potential, however, there were risks.  The challenge was creating a conductive condition to tap into those resources, he said.  To do so, domestic conditions needed to be improved in many countries to make them attractive for investors.  Among the tasks at hand were mobilizing tax revenues, generating natural resource revenues and addressing illicit finance flows.  In addition, subsidies amounting to $400 billion were not reaching the intended beneficiaries and those funds could be tapped for development.

Ms. AKHTAR said that due to challenges, the financing framework for sustainable development had to be broad-based.  She stated that some lessons learned over the past few years were instructive.  The global financial crisis had resulted in major destruction to financial systems.  This reality called for maintaining financial stability at both the international and domestic level.  Also, the current financial sector could not adequately meet the needs of developing countries, particularly in providing long-term funding, she said, stressing the need for a stronger, more resilient and diversified financial sector.  She pointed out that the lack of financial access in developing countries should be addressed and that efficiency in financial resources allocation should be enhanced.  On mobilization of domestic resources, there was a huge gap between developing countries and developed countries in terms of public revenue collection.  Developing countries needed to expand their tax base and combat tax evasion, tax avoidance and illicit financial flows.  In that regard, strengthening international cooperation was crucial.  On ODA, she said although the global crisis had affected developed countries’ economic growth, they could still try to fulfil their commitments by improving resources allocation and looking for new funding sources.

Mr. BERGLÖF said the European Bank for Reconstruction and Development experience demonstrated how financing could help to deliver on the Millennium Development Goals and the post-2015 development agenda.  Finance transformed economies and the lives of people, with access to it being an important delivery mechanism for sustainable and inclusive growth.  Foreign direct investment, private equity funds and emerging market corporate funds were also important transformational financing tools.  Looking beyond, the post-2015 agenda should aim at extending the Millennium Goals to neglected areas and to broader themes, such as climate change.  The critical role of the private sector should be recognized and there should be a broader role for multilateral development banks.  In the Bank’s work helping transition countries to catch up through transformational financing, lessons learned included that productivity growth was linked to reform.  Multilateral development bank activities included the use of banks to deliver Millennium Development Goal-type objectives by providing credit lines to finance energy efficiency, subsidies that maximized impact to target CO2 savings and efforts to promote women entrepreneurs, food security or water and material efficiency.  But multilateral development banks could not do it alone and a coordinated approach was needed.  For its part, the Bank’s key strategic objectives included mobilizing long-term investment while complying with United Nations Principles for Responsible Investment.

Ms. HAHLEN said that each country should take the primary responsibility for its own development.  Speaking of domestic public resources for financing for development, she said developing countries needed to improve their tax systems, strengthen tax administration, combat tax avoidance, fight corruption and ensure accountability.  Stressing the role of private finance, which was larger than all public finance combined, she said Governments should adopt appropriate policies to create an enabling environment and channel investment into sustainable development.  Although the private sector was profit-driven, given the large amount of funds it had, even a small portion of that would make a significant contribution to development.  Acknowledging that ODA remained a major financing source for low-income countries, she said European Union Member States would continue to deliver on their commitments.  Meanwhile, reforming the ODA mechanism and better monitoring of the funding for different policy objectives were needed.  Financing must be aligned with policy objectives and should go where it was most needed, she said, stressing the need for using development funds in an effective way to ensure maximum results.  Looking to the future, she said sustainable development would require a comprehensive approach.

Mr. GREENWALD said a century ago peripheral economies were based on agriculture, but today this was no longer the case due to important productivity growth levels.  Manufacturing dominated the twentieth century, but was now dying the same death for the same reasons as agriculture.  Recently, manufacturing was in fact returning to the developed world, with lower transportation costs, higher employment costs and fewer jobs.  Given the challenges facing the next generation of developing economies, development goals that are set must recognize that technology diffusion was key.  Peripheral economies would face many serious challenges, which emphasized the sense of urgency in addressing those concerns in this and other fora.  Resources should not be wasted on middle-income countries, and the focus should be on the poorest countries.  Since economies would no longer be able develop through agricultural, global funding sources would be the likely driver of development into the future.  Local infrastructure was imperative, including banking systems and national institutions capable of addressing concerns.  Countries reeling from the death of manufacturing often now tried to export their way out of the situation, which was not a viable long-term solution.  One way out, he said, could be if the International Monetary Fund (IMF) or similar local institutions issued special drawing rights, which would have a profound effect on developing countries by relieving the current structural pressure that, historically, resembled the realities of the Great Depression.

The representative of Saudi Arabia recalled that developed countries had committed to the 0.7 per cent of gross national product target regarding ODA.  His country had reached this target, but many other countries lagged behind, he said.  Now in discussing the post-2015 global agenda, there was the question whether this target was too high, too low or just about right.  He believed that with so many people around the world suffering from poverty, hunger and the lack of energy and social services, if Member States could not agree on a higher target, at least they should deliver on their commitments by 2015.  He also stressed that trade was more important for development than aid, calling for assisting developing countries in increasing market access and manufacturing more exportable products.  While acknowledging that the private sector was essentially profit driven, he said it remained an important source and even a small portion of private funding could contribute significantly to development.

The representative of the United Republic of Tanzania raised the question of implementation.  He said many speakers had talked about developing countries taking ownership for their own development, which was exactly what many African countries had been doing.  They had made efforts to strengthen institutions, good governance, the rule of law, partnerships between the public and private sectors and tailored policies to attract foreign direct investment.  Many commitments had been made on various international platforms, including in the Monterrey Consensus and Doha Declaration, he said, but they were not implemented.  If all commitments had been fulfilled, the Millennium Goals could have been reached.  Therefore, he called on all Member States to make sure that commitments would be implemented.

The representative of the United Arab Emirates said that over the last two years, the country’s ODA had increased dramatically, calling for developed countries to reach the 0.7 per cent gross national product target regarding ODA.  Regarding the post-2015 agenda, he raised the question on how to incorporate measures of encouraging private investment and ODA into the agenda.

A civil society representative brought up the role of women in economic development, noting that the Beijing Platform for Action principles had been sidestepped by the Monterrey and Doha processes.  There would be no sustainable development without gender equality and women’s rights, she said, emphasizing that it was imperative that fiscal policies were in line with human rights and considered social protection measures, since women played a large part of informal labour sector.  New mechanisms for financing for development were needed honouring justice for all and existing commitments to gender equality and women’s rights needed to be fulfilled.  Public and private sectors needed gender objectives that were accountable.

The representative of the Republic of Korea said many elements contributed to his country’s economic development and it would share experiences and best practices.  The Republic of Korea was collaborating with the United Nations Development Programme (UNDP) to provide a model for development and methodology to benefit interested countries.  Regarding the European Bank for Reconstruction and Development, he asked for more details on the impact of smart subsidies.

Australia’s representative said trade was a driver of development.  Liberalization of trade enhanced growth and trade-led growth allowed countries to build and use additional forms of financing for development.  Least developed countries account for only 1 per cent of global trade and a successful Doha Round in Bali would deliver a needed boost to increase that percentage.

The representative of Saint Kitts and Nevis, speaking on behalf of the Caribbean Community (CARICOM), said development banks had been involved in bolstering economic activity at the local level, however, enhancing the expertise at this level would be an area to investigate.  Given the importance of trade, the CARICOM Single Market and Economy was increasing regional activities.  Regarding Mr. Greenwald’s statement of not wasting time with middle-income countries, he asked the panellist for advice for middle-income countries, which formed a large number of CARICOM States.

Germany’s representative said the Monterrey Consensus supported strengthening tax systems.  The G20 Summit addressed illegal capital flows through transparency measures.  Other venues had addressed related issues.  A dialogue was now required on the various systems, particularly concerning the BRIC countries ( Brazil, Russian Federation, India and China), to further expand on existing themes.

The representative of Barbados said that the ongoing global economic and financial crisis had significantly affected the development cooperation landscape.  Under this background, his country had proposed a variety of initiatives in financing for development, including the establishment of an international fund aimed at providing investment on small and medium enterprises, particularly in such fields as agricultural development and technological innovation.  While admitting that each country should take the primary responsibility for development, he said that Barbados — a country with a small, vulnerable economy — could not do this alone and that its efforts needed to be supplemented by international assistance.  He called for using indicators other than gross domestic product (GDP) per capita to measure the degree of development, saying that his country was classified in the middle-income group, a designation that lead to decreased international assistance.

A representative from the business sector said that a significant portion of ODA had not been achieving the expected effectiveness it should have been, and the fact that some multilateral development agencies had instead resorted to giving direct cash transfers to those most in need was an indicator of that.  He called for a paradigm shift in the way ODA was administered so as to achieve its intended results.  He also said that given increasing awareness of corporate social responsibility and the profit-making potential in a green economy, with appropriate leverage and incentives, it was possible to channel private investment to support sustainable development.

The representative of Argentina said ODA remained an important source of financing for developing countries, adding that financing from the private sector was complementary but could not replace ODA.  She also stressed the need for mobilizing domestic sources, addressing sovereign debt crisis, promoting trade and eliminating agricultural subsidies in developed countries.

The representative of Bangladesh said most countries that pledged their commitment at a Special Event on the Millennium Goals last month had not fulfilled their promises.  While non-traditional funding sources were important, they could not replace steady sources of funding, he said.  The onus was on the Member States to ensure there was smooth and sustainable financing for development.

A speaker from the business sector said there were adequate funding sources, but the process was flawed.  Banks were not taking enough risks, she said, noting there was evidence of certain pockets of unpopular fields that received scant funding.  She suggested strengthening local institutions and measures to unlock some risks not addressed by traditional instruments currently being used.

A representative of civil society said he was puzzled over the way countries bailed out banks instead of building toward development.  Regulation was needed in the global financial architecture to prevent future crises.  An independent institution, not IMF, should handle efforts to address pressing problems.  He was surprised that private finance was on the international agenda when European experiences showed private credit-driven booms ended in busts.  A clear selection process was needed when taking that approach.  Capital controls and binding standards were needed for Governments and private institutions.  Private actors should pay taxes in a way the represents tax justice.  He called on the United Nations to convene an international forum on tax issues.

Ecuador’s representative noted that what functioned for some countries did not for others.  New institutional agreements were needed alongside a new format of what investment should be.  A private sector country had used and abused his country, and other countries faced similar situations.  New agreements would maximize profitability and development.

Responding to questions from the delegates, Mr. Greenwald said he did not think supporting middle-income countries was a “waste of time” but in a world of limited resources in the near future, prioritizing resources was needed and the truly poor countries should be the focus.  On trade liberalization, he said it was important to recognize that the world was in an era when it mastered manufacturing and was now entering a new era.  Turning to IMF assistance, he said the funds should have limitations on debt, but the fewer strings attached, the greater the local economy would be boosted.  Referring to the Republic of Korea's phenomenal performance, he suggested that its delegate should include IMF's inputs into his country's collaborative work on a development model with UNDP.

Ms. HAHLEN, responding to questions regarding ODA, said that since Goal 8 of the Millennium Development Goals was created, many new challenges had emerged and the landscape of development cooperation had changed.  Regarding financing for sustainable development, ODA alone could not “do the trick” and that all stakeholders should be brought on board.  She noted that since European Union Member States had committed to the time bound ODA target, they had at least “done something”, under the pressure of time and global economic crisis.  “We would like to see other countries set the bar higher,” she said.

Mr. BERGLÖF, addressing a question on the relationship between economic growth and productivity, explained that the correlation between the two was a long-term one.  In the short term, there were indeed occasions when growth was increased without improving productivity, or when productivity was improved without generating more income.  He emphasized the need for each country to make smart use of development finance according to its own situation and characteristics.  Citing his experience in promoting energy efficiency in the developing world, he said it was important to adopt a results-oriented approach in providing funding.

Mr. MUHTAR said that progress in scaling up development aid efforts could not be neglected, but the challenge was how to build on that.  Setting the Millennium Goals had helped developing countries mobilize resources, and the ongoing United Nations-led efforts in defining the post-2015 global development agenda would provide an opportunity to generate further support.  In this process, it was important to have more voices speaking out for developing countries, he said, adding that the private sector, philanthropies and civil society were making great contributions to the discussions.  He also stressed the importance of reducing aid dependence, promoting trade and strengthening South-South cooperation.  Responding to the comment from a representative of the private sector that direct cash transfers used by some multilateral development agencies indicated the failure of ODA in achieving effectiveness, he said actually there had been many areas of success and cash transfers were only complementary to the much wider efforts.  At the same time, he stressed that improving aid effectiveness and enhancing accountability were very important.

Round Table III

The roundtable on “The role of financial and technical development cooperation, including innovative sources of development finance, in leveraging the mobilization of domestic and international financial resources for sustainable development” was chaired by František Ružička, Member of the Intergovernmental Committee of Experts on Sustainable Development Financing and the Permanent Representative of Slovakia to the United Nations.

Panellists included Pertti Majanen, Co-Chair, Intergovernmental Committee of Experts on Sustainable Development Financing, Helsinki, Finland; Jon Lomøy, Director, Development Cooperation Directorate, Organization for Economic Cooperation and Development (OECD); Gargee Ghosh, Director of Policy and Finance, Bill and Melinda Gates Foundation; Mauricio Escanero, Alternate Permanent Representative of Mexico to the United Nations Educational, Scientific and Cultural Organization (UNESCO); and Gilles Alfandari, Senior Economist, International Policy and Partnerships Group (IPPG), World Bank.

Mr. RUŽIČKA said that developing countries continued to rely on global support and external finance sources.  In the Monterrey Consensus, countries had pledged 0.7 per cent of gross national income as ODA to least developed countries.  Those commitments were again reaffirmed at the United Nations Conference on Sustainable Development, known as Rio+20.  Yet aid had declined in recent years just as the world accelerated efforts to achieve the Millennium Development Goals.  ODA fell in real terms two years in a row and aid to least developing countries fell by 12.8 percent.  The need for more predicable international public financing had intensified the search for alternative financing to complement ODA.  It was vital to ensure transparency and avoid duplicity.  While South-South cooperation had a role in boosting financing sources, it should not be used as a substitute for transnational aid but rather as complementary to North-South cooperation.

Mr. MAJANEN said the Monterrey Consensus and Doha Round had provided a strong foundation and documents that were still relevant for today’s discussion.  Now, the objective was to produce a clear, action-oriented set of recommendations on development financing that included policy recommendations and took into account financing for the environment, including climate change and bio-diversity.  Despite being a small part of the financial flows to developing countries, ODA had a central and important role in reducing and eradicating poverty, especially in least developed countries.  However, more could be done.  Developing countries needed to take more ownership, while the international community needed to pursue more private flows so that ODA could be more oriented toward poverty reduction.  The reality of today was that a major portion of financial flows for development would come from the private sector.

Mr. LOMØY said frequently discussions about development were conversations about misery and did not emphasize the great progress made in reducing poverty, improving access education and health services.  The global community should celebrate the success in reaching the first Millennium target and an important part of the dialogue should be about opportunities, particularly as the discourse about post-2015 took shape.  Much important input had been received and an inspiring agenda had formed.  For the first time in human history, eliminating poverty was a realistic possibility.  The world had changed a great deal since Monterrey and never before had there been more resources for development available. 

Three major elements that formed the financing picture, including domestic resource mobilization, private investments and public financing, he said.  The first was instrumental and ensured developing countries took their share of responsibility through increased tax bases, elimination of large-scale tax exceptions and streamlined taxation of natural resources.  With regard to private financing, he underlined the need for a more creative and strategic use of public-private resources.  There also must be greater acknowledgement of the successes of ODA.  The world needed to “talk up” ODA more instead of lamenting its decline and struggles, which risked turning its failures into a self-fulfilling prophecy.  In particular, the international community must celebrate cases where recipient countries were now ODA providers.

Ms. GHOSH recalled how the Bill and Melinda Gates Foundation focused much of its work on combating extreme poverty and improving access to financial services.  The Foundation was focused on telling the story on what ODA could do and how it could be quite effective.  It remained committed to promoting the next set of development goals, which she hoped would be just as specific and centred as the Millennium Development Goals.  It was important to enhance the effectiveness of resources and transparency, reduce the volatility of aid and modernize efficient mechanisms of delivering aid.

Beyond ODA, the Foundation was working with new development finance landscapes, she said, pointing to projects with Saudi Arabia, China and Brazil.  The new finance flows focused on neighbouring countries and mutually beneficial outcomes.  In the next decade of development finance, the Foundation was keen to support a crop of philanthropists to fill gaps in public programmes and to understand specific results and tangible outcomes.  In that regard, there was certainly a need to develop projects that tapped into new sources of financing.  Innovation was about modernizing tools of finance and making them more efficient from research to delivery.  She emphasized the need to provide a partial loss guarantee to reduce private investment risk

Mr. ESCANERO, recalling his role as a facilitator in the Monterrey Consensus negotiations, said the time was ripe to prepare a follow-up conference that would deepen a holistic approach to development.  Building on what had been done, and reinforced at Rio+20, all efforts must concentrate on including the social, economic, and environmental dimensions in the post-2015 development agenda.  Speaking in his national capacity, he said that for Mexico, social inclusion was crucial as there was an unacceptable level of inequality.  The lead up to the post-2015 development agenda must include a discussion on social inclusion that attacked the different dimensions of poverty, including the lack of income, food, housing, and other basic services. 

In that regard, global cooperation for development must be strengthened at the current juncture when the world was expediting completion of the Millennium targets and advancing towards a new development agenda.  Reversing the decline of ODA flow and addressing the challenges of middle-income countries was important.  He emphasized the challenges and opportunities posed by South-South and Triangular Cooperation.  A new platform must provide innovative sources of development, such as international taxes on financial transactions.  ODA was also essential in financing climate change mitigation.

Mr. ALFANDARI called on the global community to mobilize funding on the supply side, select better projects on the demand side, and identify ways to use funding more effectively.  A global development cooperation framework, increased public spending with targeted and evidence-based policies, cooperative efforts that produced and mobilized financing, and better-leveraged private sector resources were needed to achieve the post-2015 goals.  Developing countries must take the lead in some regard and improve taxation capacity, harness sustainable streams of natural resource revenue, and curb illicit financial flows.  ODA had been a relatively stable source of development financing for the poorest economies as had remittances and foreign direct investments.  The development of fragile, conflict-affected regions relied heavily on ODA, he said, calling for ODA in those vulnerable areas to be sustained.  The private sector could play a catalytic role in the overall development financing picture, although better management of portfolios of potential investments and projects that posed less risk was needed.

When the floor was opened for discussion, the representative of Saint Vincent and the Grenadines, speaking on behalf of CARICOM, called for an immediate review of the criteria used by multilateral financial institutions and some development partners to graduate small highly indebted middle-income countries from access to concessional resources.  Issues of differentiation and graduation greatly affected access to funding.  The specific vulnerabilities of small island developing States must be reflected in the economic classification of countries.

The representative of the European Union supported Mr. Escanero’s call for a follow-up conference on financing for development.  France’s delegate said that innovative sources of financing were needed in the areas of health, education and climate, and every State should be free to choose suitable sources.  He outlined three steps taken by his Government to raise funds: the freeing up of loans to ensure flows of capital for things like vaccinations; implementing solidarity taxes on airplane tickets to help leverage supplementary resources; and allocating 10 per cent of national tax to financing for development.  Although innovative financing offered a diversity of opportunities, it was important to remember that primary financing must come from national resources, which must also ensure equitable distribution of wealth.

The representative of Portugal said that the main challenge in seeking innovative sources of financing was strengthening synergies between financial sources and achieving the right combination of partners.  The representative of the Republic of Korea said that while private flows had an important role to play, it was concerning that often private investments were directed at certain countries and toward specific sectors.  For example, only 2 per cent of private flows went to least developed countries.

Several members of civil society and the private sector also participated in the interactive discussion.  One civil society representative underscored the need to examine why public resources were so inadequate.  Financial liberalization had made it too easy for capital to flow across borders, causing a reduction of revenue available for public investment.  Clamping down on tax havens would help deal with imbalances that caused financial instability.

A speaker from the private sector said that Governments must engage meaningfully with that sector at local, national and global levels, with a focus on technical cooperation and aid effectiveness.  Echoing her sentiment another member of the business sector said that while telecommunications and digital technologies were significant contributors to GDP, in the developing world they lacked efficiency and investor interest.

Continuing the discussion, a civil society representative said that hunger and violence were “loud cries” that society was not moving in the right direction.  ODA did little to balance the disparity caused by the exploitation of natural resources in developing countries.  Another civil society speaker, noting that far too many women were living in poverty and did not have access to formal financing services, stressed the need for their meaningful participation in micro-credit and micro-savings initiatives.

In closing remarks, several panellists stressed the need to address social inequality. Mr. ALFANDARI said that as 970 million people worldwide still lived below the poverty line, there was a lot of work to be done.  Efforts must mobilize political will first, and then budgets would follow.  Ms. GHOSH said it was important to move through different sources and channels to understand an increasingly changing global market.  That required intermediaries who defined projects and found the best suited methods of finance to adapt.

Mr. LOMOY said that development was about more than money; it was about policies that dealt with inequalities.  Inequality was as much a part of the problem in developing countries and least developed countries as it was in developed countries.  Illicit flows of funds, asset recovery regulations, and the existing international taxation system all required examining to fit the purpose of a developing global economy.  Mr. MAJANEN pointed to microfinancing as a well functioning system which had benefitted 100 million people.

Informal Interactive Dialogue

In the afternoon, the Assembly held an informal interactive dialogue, entitled “The link between financing for development and achieving the internationally agreed development goals, including the Millennium Development Goals, and advancing the United Nations development agenda beyond 2015”, that was chaired by Octavio Errázuriz, Vice-President of the General Assembly.

Panelists included Gyan Chandra Acharya, High Representative for the Least Developed Countries, Landlocked Developing Countries and Small Island Developing States; Olav Kjørven, Special Adviser to the Administrator on the Post-2015 Development Agenda, Bureau for Development Policy, United Nations Development Programme (UNDP); and Daniel Titelman, Director of the Financing for Development Division, Economic Commission for Latin America and the Caribbean (ECLAC).

Mr. ERRÁZURIZ said it was clear that the world had made significant progress in achieving the Millennium Development Goals and that in the months ahead, the biggest challenge would be how to move even faster towards them, with a focus on those that were most off-track and on the countries that faced unique development challenges.  Mobilizing financing was also a central priority on a global level.  Countries needed to make every effort to mobilize domestic resources, while there was obviously still a clear role for donor countries.  Sustainable development and the eradication of extreme poverty must be at the centre of the new, post-2015 agenda, the success of which would rest on the ability to implement a coherent and comprehensive financing strategy.

The renewed global partnership must also address issues such as climate change, financing stability and tax evasion, he said.  Many of these issues had already been incorporated into the financing for development process.  He hoped the international community would seek solutions for building a renewed global partnership for development, identify ways to integrate the three dimensions of sustainable development into a financing framework, and determine how the financing for development process could help shape the post-2015 agenda.

Mr. ACHARYA said there was clear recognition that the Millennium Development Goals must be supported by the international community, as outlined in Goal 8.  However, progress on a global partnership for development had fallen short of expectations.  While substantial progress had been made in many of the Goals despite hardships in some countries, meeting the targets was still a distant objective considering the 2015 deadline.  Many countries’ dependence on natural capital, such as agriculture and fishing, must be taken into account when mapping sustainable development in the post-2015 agenda.  Traditional and additional sources, including private sector and philanthropy, would also be critical to move the agenda forward.

The 92 least developed countries, landlocked developing countries and small island developing States had specific needs and challenges, he said.  Highly dependent on aid, the countries were disproportionately affected by climate change and global economic crises.  ODA had dropped in recent years, but that train must be reversed as 2015 approached.  Domestic resources were also critical, but development was equally an international responsibility.  There should be ample support for infrastructure building in energy and other sectors to drive development forward.  An equal emphasis must be on developing domestic resources and tax issues.  Private sector investment and concessional funding of infrastructure also must be further examined.  South-South and triangular cooperation were increasingly becoming important for least developed, landlocked developed and small island developing nations and the potential of those partnerships should be enhanced.  Innovative financial measures must be considered alongside involving the private sector when considering a post-2015 agenda.

Mr. KJØRVEN said that citizens around the world have been discussing on an unprecedented level what should follow the Millennium Development Goals when they expired in 2015.  Close to 1.5 million people had contributed to the discussion through national consultations, thematic consultations and online platforms.  As a result, there was a much clearer picture of people’s priorities and a number of themes had emerged, including the desire to fully achieve the existing Millennium targets, particularly those that dealt with issues like maternal and child mortality, and water and sanitation.  Citizen input also indicated that people wanted certain themes, such as education and health, to continue after 2015.

The recent financial crisis and subsequent decline in ODA meant this conversation was taking place at a challenging time, he said.  It was important to mobilize resources from across the spectrum, including public and private sources, as well those on the national and international levels.  Curbing illicit financial flows and increasing the capacities of tax administrators would help increase domestic resources for sustainable development.  High expectations were also being placed on the private sector on how to catalyze long-term finance.  Opportunities for blending public and private finance would be a critical dimension of the post-2015 development framework, as would continued South-South cooperation.

Mr. TITELMAN said the Monterrey Consensus was the first global attempt to address financing for development in a number of areas, including sustainable debt financing and enhancing the coherence of the international trading system.  Those topics were relevant today and for the post-2015 era.  In addition, climate change and transforming economies to boost growth and social development were also concerns.  One of the key issues in the new financing for development was the global common good.  Achieving goals beyond the Millennium targets would require an even great pool of resources.  Relevant to ODA, the Monterrey Consensus set out a target of 0.7 per cent of gross national income, but had fallen short with some countries allocating on average about 0.28 percent to ODA.  Moreover, ODA had lost its relevant importance to other sources of finance, including remittances, grants from financial donors, and private capital.  Those sources were now playing a great role in financing development.

Innovative mechanisms also generated new public revenue streams and debt-based instruments such as debt swaps and public- private incentives guaranteeing private flow mobilization, he said.  The post-2015 agenda, which must incorporate the social, economic and environmental dimension, was a global policy agenda requiring the provision of global public goods.  A growing number of recipient countries received donations to mitigate climate change.  Those funds were generally difficult to access by countries which lacked the know-how and financial resources.  As in Monterrey, a key element of the future 2015-agenda was the need to strengthen domestic resource mobilization.  The development of international and domestic finance systems had proved to be a complex process requiring new instruments that managed economic and financial resources.

When the floor was open to discussion, a representative of civil society said that although many commitments had been made, they often did not come to fruition.  He believed that many of the problems were tied to the lack of political will.  If countries could reach agreement on reducing their military budgets and use the saved resources on development, much more progress could be made in achieving the Millennium Development Goals, he said.

The representative of Jamaica stressed the need for promoting mobilization of domestic funds.  To achieve that, he said Governments needed to conduct reforms to create an enabling environment to attract investment.  He outlined many efforts made by his country, including strengthening tax administration and consolidating tax revenues, increasing global competitiveness, and reducing fiscal deficits.  He also emphasized the importance of public and private partnership, saying that the private sector could make significant contributions in many key areas of development, such as improving infrastructure, enhancing information and communications technology capacity and increasing energy diversification.

The representative of Germany said it was important to return to the roots: the Millennium Development Declaration and its goals.  It was time to separate the financing from the tasks and it was necessary to clarify the role of participants to indentify the ownership of the tasks.

Chile’s representative said a Monterrey+ conference would serve as an opportunity to recognize the social issues involved.  The conference should be held before 2015 so it could contribute in a meaningful way to discussions on the post-2015 development agenda and renew and update the international community’s commitment to social issues and poverty eradication.

The representative of Sudan said the shrinking size of assistance from developed countries had impacted developing countries.  There was a growing need to focus on poverty eradication and to give special assistance to least developed countries to help those States build their economies.  Predictable funding and the flow of private capital were critical sources that would, among other things, contribute to sustainable development.

The representative of the Republic of Korea said ownership was key to development.  In the coming years, with the Millennium Development Goals’ deadline looming, the issue of financing was more important than ever before.  Limited resources needed to be used effectively.  The biggest challenges had been the decline in ODA, he said, calling on countries to fulfil their commitments and end that trend.  Traditional ODA, innovative financing sources and private sector investment were needed to move ahead to face new challenges, such as climate change.

The representative of Mexico said the world was facing a defining political moment as it moved towards 2015.  The Monterrey Consensus should guide collective efforts in the post-2015 era and the principles of shared economic prosperity, social inclusion and development and the environmental perspective must be considered.  Monterrey should be comprehensive and should allow all stakeholders to build a platform for financing that would be created with consensus and would move towards concrete results for all people.

The representative of Ecuador was concerned that commitments on financing for development were not sufficiently fulfilled so far, and called for strengthening implementation of the Monterrey Consensus and Doha Declaration.  He also stressed the need for reforming the current international financial structure as well as strengthening cooperation and coordination between international and regional financial institutions.

A representative from the business sector underscored the importance of revitalizing the financial intermediation process, which had been heavily affected by the financial crisis.  Bank and non-bank financial intermediaries could play an important role in channelling funds into development.  A stock-taking process was needed to understand the current situation and the challenges ahead.

A number of representatives of civil society raised concerns about financing for development.  One speaker said debt left countries unable to provide essential services to their people and debt cancellation offered opportunities to use funds for healthcare, education and other areas targeted by the Millennium Development Goals.  Another said domestic economic growth was the heart of all development, followed by other sources of financing, and the national level was the starting point for efforts.

A representative of the private sector said to attract more involvement by private investment there was a need to produce “fresh ideas” and the processes to follow through.

A representative speaking on behalf of various women organizations said that when setting the post-2015 development agenda and advancing the financing for development process, adopting a gender perspective was essential, because without empowering women, it was impossible to achieve real development.

In closing remarks, Mr. ACHARYA said that evidence from the field had shown that strong leadership, well-designed development strategies, effective financing mechanisms and supportive international frameworks were important for reaching the Millennium Development Goals.  The international community must comprehensively address financing for development.  Looking forward to the post-2015 development agenda, he said ODA remained an important financing source and should be more focused on the most vulnerable countries.  Meanwhile, the international community should also provide aid to these countries in areas such as capacity building, trade promotion, innovative financing and policymaking in order to attract more investment.

Mr. TITELMAN said that he agreed with certain speakers on the importance of increasing productivity and domestic growth, which was a key element in the process of mobilizing domestic resources.  He also welcomed the idea of using the Monterrey framework as a basis for discussing the post-2015 global development agenda and expanding it to incorporate new challenges.

Closing Remarks

Delivering a statement on behalf of Mr. ASHE, President of the General Assembly, Mr. ERRAZURIZ thanked the participants for their valuable contributions and constructive interventions and outlined key points raised through the dialogue.  Among them were that a changing world required an adapted conceptual framework to deal with new circumstances and challenges, particularly those related to integrating the social, economic and environmental dimensions of sustainable development, as well as to calls for an early conclusion of the World Trade Organization Doha Round of trade negotiations and for countries to fulfil their ODA commitments to bolster development.  Many delegations also called for the Follow-up International Conference on Financing for Development to be held before the end of 2015 in order to best contribute to the post-2015 agenda.

“I have also sensed optimism that we can come together to meet the challenges of sustainable development,” he said.  “The resources are there, they just need to be allocated effectively.  This requires a true multi-stakeholder effort and global partnership encompassing all stakeholders, in order to expedite the mobilization of financial resources, public and private, at the national, regional and international levels, for sustainable development.”

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For information media • not an official record