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12 February 2001
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Preparatory Committee for the
High-level International
Intergovernmental Event on
Financing for Development
12 February 2001
2nd Meeting (PM)
Heads of Five Regional Commissions Address Committee
The Preparatory Committee for the High-Level Event on Financing for Development should shape the upcoming conference into a watershed event that would respond to the challenges facing the development community, the representative of Guatemala told the Committee this afternoon.
He told the Preparatory Committee, which is laying the ground work for the Event, that a requirement for an “indispensable” event would be to fully exploit the comparative advantages offered by the United Nations itself. By focusing the agenda, format and outcome of the Event on things the Organization did best -– such as utilizing its capacities to enlighten and to impact public awareness -- the Committee would all but ensure the Event’s success.
The Preparatory Committee also heard from the five regional commissions this afternoon. The Coordinator of the United Nations regional commissions, Jose Antonio Ocampo, who is also Executive Secretary for the Economic Commission for Latin America and the Caribbean (ECLAC), said their reports to the Preparatory Committee reflected unique regional and subregional perspectives on the relevant issues before the Committee. They had identified specific regional and subregional needs and, accordingly, the reports contained relevant recommendations from the respective regions.
Concerning on the Latin American and Caribbean Regional Consultation, he said they called on the international community to work with the private sector to promote long-term financial flows, especially foreign direct investment, to all developing countries and to facilitate market and institutional mechanisms that would make other types of private capital flows, especially credit, available to those States.
K.Y. Amoako, Executive Secretary for the Economic Commission for Africa (ECA), said his region’s consultative meeting concluded that significant external support would be needed until incomes rose substantially and domestic savings picked up. He had proposed a “global compact with Africa” to a Conference of African Ministers of Finance, which coincided with the consultative meeting -- an idea that elicited a strong positive response.
Danuta Huebner, Executive Secretary for the Economic Commission for Europe (ECE), said development financing was generally identified at its consultative meeting as a long-term and complex process requiring broad regional cooperation. It was agreed that countries with economies in transition needed both mobilization of domestic development potential and an enabling environment that allowed growth of trade and access to financial markets.
Kim Hak-Su, Executive Secretary for the Economic and Social Commission for Asia and the Pacific (ESCAP), said the highly diverse geographical nature of his region meant that “one size fits all” recommendations would be irrelevant in discussions of financing for development. There was a recognized need for the ESCAP region to develop some longer-term savings instruments to avoid financial crisis.
Mervat Tallawy, Executive Secretary of the Economic and Social Commission for Western Asia (ESCWA), said participants at the consultations had underscored the importance of sound monetary and fiscal policies and of preserving the gains achieved through financial stabilization. They also stressed that economic stability was essential for promoting domestic savings and investment, as well as attracting foreign capital. She said the regional meeting did not confine itself to the demands of industrialized countries, but focused instead on longer-term approaches that could be adopted by ESCWA member countries.
Statements were also made by the representatives of Japan, Philippines (on behalf of the Association of South-East Asian Nations (ASEAN)), Brazil, China, Togo (on behalf of the Organization of African Unity), Republic of Korea, India, Algeria and Peru.
The High-level Event, scheduled for the first quarter of 2002, is aimed at meeting the long-term imperatives of eradicating poverty and fulfilling the social and humanitarian goals set by global conferences of the 1990s. The work of the Preparatory Committee is to address the broad development concerns expressed by world leaders at the Millennium Summit, particularly the obstacles developing countries face in mobilizing the resources needed to finance their sustained development.
The Preparatory Committee will meet again at 10 a.m. Tuesday, 13 February, to continue its general debate, and to review the inputs to the substantive preparatory process to the High-level Event.
Committee Work Programme
The Preparatory Committee for the High-level International Intergovernmental Event on Financing for Development met this afternoon to continue consideration and review of the inputs to the substantive preparatory process and the High-level Event. (For background, see Press Releases DEV/2283 issued 9 February and DEV/2285 issued today.)
Procedural Matters
Before beginning its work this afternoon, the Committee approved an additional list of non-governmental organizations recommended by the Bureau for accreditation to participate in the substantive preparatory process and the High-level Event (document A/AC.257/10/Add.2).
BOB FRANCIS JALANG’O (Kenya), speaking on a point of order, reiterated an offer made last year by his Government to host the upcoming High-level Event.
Statements
MARTIN BELINGA-EBOUTOU(Cameroon), speaking in his capacity as President of the Economic and Social Council (ECOSOC), urged the Committee to bear in mind the development commitments made by heads of State and government at the Millennium Summit. Those leaders had pledged the utmost cooperation to work towards achieving success at the upcoming High-level Event. Because of its universality and democratic nature, he added, the United Nations must guide the direction of the international community as the agenda for the Event began to take shape. At the same time, the Organization must rely on the input of all relevant international actors. Indeed, broad cooperation at all levels might provide the impetus that would draw the international community closer than ever towards consensus on important development issues.
He said that through the years, ECOSOC had developed close ties at all levels through political dialogue. Now, every ECOSOC session included a high-level segment that focused on a development issue that was deemed of particular concern. It had also developed an ongoing relationship with the Bretton Woods institutions. The ECOSOC had taken new measures, involving non-governmental organizations (NGOs) and the private sector in its discussions of development issues and initiatives. In that regard, just last year the Council held a high-level segment on information technology and its impact on development. Those were just a few of the ways ECOSOC had established a framework in which all international players could identify key issues, work on agreed commitments together and, importantly, work to ensure the financing of broad sustainable development during a time of globalization.
Moreover, he continued, the Assembly had requested ECOSOC to work to find ways to promote social and economic development and to ensure greater equity in the world economy. In that regard, the Council would host a meeting in April involving high ministers from financial institutions, which would bring attention to those issues at the political level. The Council had emerged as a central forum, where all the strategic partners involved in development could meet and discuss all issues on the international agenda. The preparatory process for the Event and its follow-up must take into account the potential role of ECOSOC in helping achieve the Committee’s agreed goals and objectives.
JOSÉ ANTONIO OCAMPO, Executive Secretary for the Economic Commission for Latin America and the Caribbean (ECLAC), said that as the current coordinator of the regional commissions, he was pleased to report that all five of the regional commissions had organized regional consultative meetings in their respective regions in the past year. Their reports had been submitted as documents of the Preparatory Committee.
He said the regional consultative meetings were organized, in addition to the United Nations Conference on Trade and Development (UNCTAD), in close collaboration with the regional institutions in the relevant field, including, particularly, the regional development banks. Further, the consultations involved other relevant stakeholders at the regional and subregional levels, such as the NGOs, business community and research institutions. The reports reflected unique regional and subregional perspectives on the relevant issues. They identified specific regional and subregional needs and accordingly contained relevant recommendations from the respective regions.
Speaking on the Latin American and Caribbean Regional Consultation on Financing for Development held in Bogota, on 9 and 10 November 2000, he said its work was structured around five thematic panels. A document prepared by the Commission’s Executive Secretary to aid discussions pointed out that during the 1990s renewed access to external financing allowed for improvements in macroeconomic management, lower inflation and modest economic growth in the region. It stated, however, that with the exception of foreign direct investment, external flows were volatile and did not generally reach less developed countries.
The document said the international community should work with the private sector to promote long-term financial flows, especially foreign direct investment, to all developing countries, and to facilitate market and institutional mechanisms that would make other types of private capital flows, especially credit, available to all developing countries.
He said a group open to all delegations from the region was also formed on the first day of the consultations and worked concurrently to the panels to prepare the perspective of those countries. The group approved a statement which pointed out that, despite the many difficulties faced by their countries, during the past decade they had worked to achieve economic growth with equity. Those efforts had been reflected in advances in the area of macroeconomic management, consolidation of the fiscal situation, economic and trade liberalization, price stabilization, the reactivation and intensification of regional economic integration, and the expansion of South-South cooperation.
He said they, nonetheless, noted major concerns affecting financing for development, which should be considered in the creation of a supportive international environment that would complement domestic efforts. Their concerns included the vulnerability of their economies to the instability of sources of external finance and the unequal flows of foreign investment and access to private capital markets.
K.Y. AMOAKO, Executive Secretary for the Economic Commission for Africa (ECA), said its consultative meeting held in Addis Ababa from 15 to 17 November 2000 included three high-level expert panels organized around specific sub-themes related to financing for development. He said the preparatory meeting was unique, in that it was timed to coincide with the ECA Conference of African Ministers of Finance.
He said that, on domestic resource mobilization, it was concluded that while domestic savings should be the main source of investment finance, current levels of savings and investment were too low to ensure broad-based, sustained and equitable growth in the region. Significant external support would, therefore, be needed until incomes rose substantially and domestic savings picked up. The panel on international resource mobilization underscored the crucial role of private capital in helping fill the huge financing gaps that existed in most African countries.
The panel on enhancing African participation in the global economy recommended key steps that the developed countries could take to support Africa’s efforts. Building upon the recommendations of the panel of experts, he said he proposed to the Conference of African Ministers of Finance a global compact with Africa, wherein rich countries would be willing to invest the necessary resources, through aid, debt relief and market access, to give African economies the jump-start they needed. African countries would, in turn, put in place the necessary political and economic reforms to ensure that their economies took off.
He said the idea of a compact with Africa elicited a strong positive response from participants, particularly from African ministers, who felt that Africa had special requirements and thus needed its own relationships on those topics. The Conference of Ministers passed a resolution requesting ECA to consult with relevant stakeholders and to elaborate the details of such a compact for consideration at the next ECA ministerial meeting.
DANUTA HUEBNER, Executive Secretary for the Economic Commission for Europe (ECE), said the Commissions’ regional conference in Geneva had brought together all actors -- including ministers, bankers, business community representatives and academia -- expressing interest in improving the financing for development process in that region. The debate that followed proved that development financing, generally identified as a long-term and complex process, required broad regional cooperation. The debate also showed that lessons learned during the process of transition to a market economy and democracy, a change affecting 26 countries in the region, could make the process of development more efficient.
She said that participants also agreed that countries with economies in transition needed both mobilization of domestic development potential and an enabling environment that allowed growth of trade and access to financial markets. The complementarity of various forms of finance was also stressed, and while agreeing on the importance of private funds, participants highlighted the continuing relevance of public funds.
She said that the importance of the role of local actors was also emphasized. State decentralization reforms should be seen as a catalyst for greater participation by the local community in regional development projects. In that context, the need to generate new and innovative forms of financing was stressed. Close regional and subregional cooperation was seen as a means of optimizing the use of limited resources. Overall, the regional debate had been pragmatic and aware of national diversity. It had stressed the key developmental role of institutions and made clear that for progress in development financing, regional dialogue was a must.
KIM HAK-SU, Executive Secretary for the Economic and Social Commission for Asia and the Pacific (ESCAP), said the highly diverse geographical nature of his region meant that “one size fits all” recommendations would be irrelevant in discussions of financing for development. That fact had been recognized by the participants and had set the stage for a stimulating regional debate.
He said there was a recognized need for the ESCAP region to develop some longer-term savings instruments to avoid financial crisis. That issue could be approached through the promotion of national bond markets, structured finance and other financial innovations. The diversification of national financial sectors, so as to reduce reliance on banks as the primary instrument for translating savings into investment, was also identified as a priority task. There was also a large measure of consensus in the region on the need to be cautious about the liberalization of the capital account.
He went on to say that there was broad agreement during the regional meeting for using information technologies in mobilizing and utilizing financial resources. Using new technologies should help make markets within the region more robust and enable them to cope better with external capital flows. Official development assistance (ODA) also remained essential for many developing countries in the region. There was broad agreement on the need to increase ODA, as well as the recognition that actions were needed in improving terms and conditions and disbursement.
MERVAT TALLAWY, Executive Secretary for the Economic and Social Commission for Western Asia (ESCWA), said the meeting in her region discussed the issues identified by the Committee, namely: the mobilization of domestic and international financial resources for development; and systemic issues. It was important to note the interrelationship of all the issues before the Committee. Therefore, the regional meeting had touched upon questions of debt, trade and ODA, even though they had not been officially designated as topics for consideration at the meeting.
She said it was also important to note that the regional meeting did not confine itself to the demands of industrialized countries. Instead, attention focused on longer-term approaches that could be adopted by ESCWA member countries. The participants underscored the importance of sound monetary and fiscal policies and of preserving the gains achieved through financial stabilization. They also stressed that economic stability was essential for promoting domestic savings and investment, as well as attracting foreign capital.
In the course of their discussions, participants also identified certain priority areas in which developing countries should seek assistance from the international community, she continued. Because the ESCWA member countries were particularly vulnerable to the volatility of oil revenues, participants stressed the need to stabilize resources for development. They further called on industrialized countries to refrain from protectionism in its various guises and allow developing countries to benefit from their respective comparative advantages. The participants did not ignore the social component of development, highlighting the necessity of maintaining sufficient resources to achieve social development objectives and of increasing the return on investments to the social sphere.
HIDEAKI KOBAYASHI (Japan) said the enhancement of domestic and foreign private investment should be one of the strategic objectives of financing for development. In particular, foreign domestic investment was beneficial not only for developing countries, but also for the developed countries from which it originated, a "win-win situation". Foreign direct investment also provided a practical means to measure progress. For maximizing private investment, priority must be given to improvement of the domestic environment in developing countries by pursuing a stable and sound macroeconomic policy, strengthening the financial and fiscal system, eliminating corruption, and developing effective governance systems.
The international environment for foreign direct investment should also be improved, he said. One suggestion would be to use the system in developed countries of insuring international investment and trade. Consideration of concrete ways in which the business community could be fully involved, was also important. Enterprises established by private investment required markets for their products. Accordingly, lowering trade barriers in developed countries would facilitate private investment in developing countries, he said.
Official development assistance was useful, and sometimes even critical, for enhancing private investment in developing countries, he continued. It facilitated private investment by improving economic infrastructure and could fund technical cooperation. The issue of debt might be approached in a new and more constructive manner. Better global governance in international financial institutions, as well as improved policy coordination among development-related international organizations, would contribute to making the international environment more investment friendly, he said.
ENRIQUE A. MANALO (Philippines), on behalf of the Association of South-East Asian Nations (ASEAN), aligned the position of the Association with that of the statement made by Iran on behalf of the “Group of 77” developing countries and China. He underlined the importance of the financing for development process as a way to address development financing in a coherent manner, through partnership between developed and developing nations. The process was also an opportunity for the United Nations to fulfil its moral and agenda-setting responsibilities in the area of development.
The preparatory process, he said, should aim for a clear, detailed plan of action for each thematic area, based on balanced political commitments from both developed and developing countries. In a coherent approach, linkages among the various dimensions of development should be emphasized, without avoiding aspects unique to specific thematic areas.
He said that the recommendations of the Secretary-General's report were useful to stimulate discussion in the right direction. Those recommendations should be strengthened at the current Preparatory Committee, to produce a more focused, specific and substantive exchange at the next Committee meeting. He called for the international community to make new commitments, and to dedicate additional resources to development. An incremental approach to development was no longer useful. He called for committed, decisive, and meaningful action.
GELSON FONSECA (Brazil) said integration should be the key concept of the work of the Preparatory Committee. First, integration of the main stakeholders. He said a constructive and participatory dialogue was already taking place with the involvement of all agencies and institutions whose work was related to finance for development, governments and civil society. It was reassuring that the International Monetary Fund (IMF), the World Bank, the World Trade Organization (WTO), and UNCTAD were participating in the process.
He underlined the contribution of civil society and the private sector, and said their participation was crucial. He spoke of the need for the integration of all countries into globalization. As globalization currently stood, there was a risk that the gap between rich and poor countries could increase. The challenges of globalization must be confronted from a human perspective, he said.
Brazil was following an economic policy that had promoted sustainable fiscal and current account balances, warded off inflation, ensured appropriate banking oversight standards and created incentives for mobilization of domestic resources and the development of a dynamic stock market. The policy had allowed the Government to promote economic growth with stability and to attract foreign direct investment, which last year amounted to $30 billion. It was, however, aware that all those efforts would be hampered without an enabling international environment.
The international community should make its best effort to ensure the stability of the international financial system, he said. Brazil supported the principle that resources freed by debt cancellation should be used in poverty- reduction programmes. Brazil welcomed the Secretary-General’s recommendations on the enhancement of the coherence and consistency of the international monetary, financial and trading systems in support of development, and on the strengthening of the role of the United Nations.
ZHANG XIAO’AN (China), stressing the importance of full participation by all stakeholders, the Bretton Woods institutions and the WTO in promoting development, said that for a long time the lack of development finance had seriously undermined the economic development of developing countries. How to reduce the gap between North and South and to promote development was now a question of urgency before the international community. Its solution depended on the political will of the countries concerned and involved more profound issues such as the improvement of the international financial and trade systems, as well as the establishment of a just and equitable new international economic order.
He expressed the hope that the developed countries would adopt an active and cooperative attitude so that the final event on financing for development could really achieve the expected objectives. The final event did not mark the end of the process, but rather a turning point, opening a totally new chapter of international cooperation and promoting real partnerships for international development cooperation. The final event should be a self-standing United Nations conference at the highest level, which should adopt a forceful political declaration and an action-oriented document containing clear commitments. At the same time, an appropriate follow-up mechanism should be worked out to review their implementation.
Effectively mobilizing and utilizing resources was of critical importance to the economic development of the countries concerned, he emphasized. While developing countries should rely on their own strength and the improvement of the managerial skills for development, their efforts were limited by their low economic development level and their poor capacity and potential in mobilizing and managing domestic resources. Moreover, the quick pace of globalization had enabled external factors to exert a direct impact on efforts for domestic financing for development.
Noting the importance of attracting foreign private capital to facilitate economic development, he said developing countries had worked very hard to improve their investment environment and attract foreign investment. Regrettably, however, the lion's share of private investment was occurring among developed countries, and the majority of developing countries were excluded from its benefits. Despite the enormous efforts made by developing countries in opening up markets, developed countries had not fulfilled their long-due commitments made at the Uruguay Round and had put up trade barriers for the competitive products from developing countries, especially textiles, which had undermined trade development for developing countries.
While ODA had an irreplaceable role in financing for development, especially regarding environmental protection, poverty alleviation and social development, it had decreased in recent years, he stated. The scope of recipients had become increasingly narrow, with more and more conditionalities attached. In addition, the heavy debt burden had not only seriously hindered the economic development of developing countries, but also caused serious social problems. A fundamental solution to the debt problem lay in the promotion of economic development. The implementation of the Heavily Indebted Poor Countries (HIPC) Initiative was useful in reducing the burden of debtors in the short term.
GERT ROSENTHAL (Guatemala) said his statement would be brief, as he would associate his intervention with those made on behalf of the Group of 77 and the Rio Group. Beginning where those statements left off, he said that the Committee must not miss the opportunity to convert the preparatory process into a high- profile affair consistent with the Declaration that had come out of the Millennium Summit. Instead of building the foundation for a conventional event, which followed the pattern of other global conferences, the Committee should work towards presenting an exceptional watershed event that would respond creatively to the main challenges facing the development community in the new century.
He said that one requirement in achieving such an “indispensable” Event would be to fully exploit the comparative advantages the United Nations offered to address the topic at hand. That was to say that the agenda, format and outcome of the Event should be reflective of those things the Organization did best, namely, utilizing its capacities to enlighten and to impact public awareness. Another way to achieve an exceptional event would be to consolidate partnership with the multilateral financial institutions and other relevant stakeholders.
He went on to say that it would be important for the Committee to ensure that its recommendations on domestic efforts and international cooperation for financing for development mutually enforced each other. There was also a need to carefully select for review subjects that brought about commitments in the areas of domestic policy and international cooperation. Finally, the Committee must give attention not only to the final outcome of the Event, but to ensuring a comprehensive preparatory process that would have intrinsic value as a vehicle to share, disseminate and clarify ideas.
SIMBAWA AWESSO (Togo), on behalf of the Organizations of African Unity (OAU), said efforts should be made to find solutions to the problem of harnessing financing for development. He called for an increase in ODA, which was falling. There must be initiatives on the six key issues identified in the report of the Secretary-General for consideration by the Preparatory Committee. He underscored the importance of the participation of the international financial institutions.
He said the issue of financing for development was entering a critical phase. The number of people living in extreme poverty had increased, and they were mainly women and children. More than half of the population of sub-Saharan Africa lived in poverty. He said the economic and social condition of people in the developing countries, particularly Africa, was worsening. They also suffered under foreign debt, whose servicing was a serious problem. He recalled that the Secretary-General had noted the rise in the debt burden. He hoped no efforts would be spared in ensuring the success of the High-level Event.
SUN JOUN-YUNG (Republic of Korea) said the agenda of the High-level Event should be dealt with in a holistic and integrated manner. The focus should be on priority areas to extract clear and concrete policy recommendations. A clear vision was needed, well in advance, of the shape and content of the outcome document. He favoured a concise declaration expressing the strong political will of Member States to follow up on the Event.
He said the success of the financing for development process depended largely on proper inputs from civil society and the private sector, as well as key institutional stakeholders. Furthermore, the inputs from regional consultations would be instrumental to the success of the process. The task before the Preparatory Committee was how to promote the concrete contribution from those actors. The challenge ahead was determining how domestic resources would be generated and how efficiently they would be channeled into development ends. He stressed the importance of policy coherence and efficient coordination among the relevant stakeholders throughout the process.
KAMALESH SHARMA (India) said globalization had magnified the existing sense of disempowerment among the weaker participants in the global economic systems. People must have confidence that the world economic system was being fashioned for the benefit of all, with sensitivity for the national priorities and concerns of developing economies. The United Nations had a special responsibility for providing constructive and collective action would include political, social and economic perspectives.
He said mobilization of domestic financial resources was the foundation of self-sustaining development, and developing countries were making concerted efforts in that direction. The success of domestic resource mobilization, however, required an enabling international environment. In many economies, external resources were catalysts for augmenting domestic revenues. Trade and capital flows were increasingly important instruments for generating resources for developing countries. That should, however, not distract from the traditional role of ODA in capacity-building. The role of ODA must be reaffirmed and the sinking graph of compounded ODA must be reversed towards the approved target.
Debt-relief measures for developing countries would free resources to be ploughed back into the eradication of poverty and development, he said. The Paris Club methodology and scope for debt relief was limited. The fact that substantial debts were nowadays owed to a variety of private investors created significant complications. Also, debt relief should not be at the expense of other international development assistance. External private capital and foreign direct investment could play a role in complementing domestic financial resources. The volatility of short-term capital flows and the corresponding need to establish appropriate mechanisms to contain sudden capital flights, however, were serious challenges that needed to be addressed.
ABDALLAH BAALI (Algeria) said that for countries of the South, financing for development was of basic importance. While the heads of State and government at the Millennium Summit had expressed the obstacles facing the international community in achieving development financing, countries in the South had long seen the viability and relevance of convening a high-level event on the issue. Indeed, questions relating to poverty, environmental degradation and the effects of globalization had been constantly addressed, while the gap between North and South continued to widen.
It was important to note, he continued, that countries in the South had not called for a replacement of the Bretton Woods institutions. What they hoped would occur at an intergovernmental event on development financing was that a consensus would emerge that recognized the fact that international mechanisms for such financing had reached their limit and must be reconceptualized to meet the challenges of today. The South was also looking for a new and dedicated commitment from the developed world that industrialized countries would mobilize and take action in that regard.
Turning to share his preliminary thoughts on the Secretary-General’s report, he said that mobilizing resources for financing for development was essential. The developing countries had often found creative ways to approach that issue, often times out of necessity, but mostly as a show of commitment. It was disheartening to note that international flows had helped only a few developing countries. The industrialized world must work to actively change that, namely, by opening up trade barriers.
He went on to say that external debt was also a serious hindrance for countries seeking to enhance their development. Algeria welcomed the HIPC initiatives, but believed that only debt cancellation and substantial debt relief for middle income countries was the only way to successfully address that problem. It was also important to note the importance of ODA. In that regard, he urged the donor community to breath new life into the development assistance system.
Finally, he said his delegation was committed to an international conference that addressed the following: creating an enabling international environment for the mobilization of resources for financing for development; effective and comprehensive debt-management measures; the catalytic role to be played by the United Nations in the development financing process; coordination of policies for development; and establishing comprehensive mechanisms to regularly review implementation of the outcome of the Event.
JORGE VALDEZ (Peru) said the ultimate purpose of the preparatory process was to achieve a collective and comprehensive understanding of the global aspects of financing for development, in order to enhance the mobilization of domestic and foreign resources required to achieve sustained socio-economic development. The world economy had abruptly changed after the cold war from an economy characterized by division into one characterized by globalization. That had resulted in the socio-economic marginalization of large portions of the planet.
He said it was, thus, important to promote and channel economic cooperation, as well as establish rules of international investment, trade and monetary affairs without neglecting such matters as debt burdens and the flows of ODA. That would ensure that the benefits of globalization were distributed in the broadest possible manner. It would also ensure that those inevitably affected negatively from the application of market forces would continue to believe in the relevance of the system.
The United Nations, he continued, was the appropriate forum for considering such development financing issues. Indeed, it was the only place where important developmental matters could be approached from an integrated or consensus perspective. The main focus of that consensus should be based on a mutual desire to make globalization an inclusive process, so that all nations could share its benefits. Financial flows should also follow political consensus.
He said that international trade was the most important mechanism that could be used to expand domestic savings and finance development. It was, therefore, urgent to solve the problems of market access, particularly within the sector of textiles and foodstuffs, as well as to approve mechanisms and programmes that would facilitate the expansion of exports.
* *** *
High-level International
Intergovernmental Event on
Financing for Development
12 February 2001
2nd Meeting (PM)
Heads of Five Regional Commissions Address Committee
The Preparatory Committee for the High-Level Event on Financing for Development should shape the upcoming conference into a watershed event that would respond to the challenges facing the development community, the representative of Guatemala told the Committee this afternoon.
He told the Preparatory Committee, which is laying the ground work for the Event, that a requirement for an “indispensable” event would be to fully exploit the comparative advantages offered by the United Nations itself. By focusing the agenda, format and outcome of the Event on things the Organization did best -– such as utilizing its capacities to enlighten and to impact public awareness -- the Committee would all but ensure the Event’s success.
The Preparatory Committee also heard from the five regional commissions this afternoon. The Coordinator of the United Nations regional commissions, Jose Antonio Ocampo, who is also Executive Secretary for the Economic Commission for Latin America and the Caribbean (ECLAC), said their reports to the Preparatory Committee reflected unique regional and subregional perspectives on the relevant issues before the Committee. They had identified specific regional and subregional needs and, accordingly, the reports contained relevant recommendations from the respective regions.
Concerning on the Latin American and Caribbean Regional Consultation, he said they called on the international community to work with the private sector to promote long-term financial flows, especially foreign direct investment, to all developing countries and to facilitate market and institutional mechanisms that would make other types of private capital flows, especially credit, available to those States.
K.Y. Amoako, Executive Secretary for the Economic Commission for Africa (ECA), said his region’s consultative meeting concluded that significant external support would be needed until incomes rose substantially and domestic savings picked up. He had proposed a “global compact with Africa” to a Conference of African Ministers of Finance, which coincided with the consultative meeting -- an idea that elicited a strong positive response.
Danuta Huebner, Executive Secretary for the Economic Commission for Europe (ECE), said development financing was generally identified at its consultative meeting as a long-term and complex process requiring broad regional cooperation. It was agreed that countries with economies in transition needed both mobilization of domestic development potential and an enabling environment that allowed growth of trade and access to financial markets.
Kim Hak-Su, Executive Secretary for the Economic and Social Commission for Asia and the Pacific (ESCAP), said the highly diverse geographical nature of his region meant that “one size fits all” recommendations would be irrelevant in discussions of financing for development. There was a recognized need for the ESCAP region to develop some longer-term savings instruments to avoid financial crisis.
Mervat Tallawy, Executive Secretary of the Economic and Social Commission for Western Asia (ESCWA), said participants at the consultations had underscored the importance of sound monetary and fiscal policies and of preserving the gains achieved through financial stabilization. They also stressed that economic stability was essential for promoting domestic savings and investment, as well as attracting foreign capital. She said the regional meeting did not confine itself to the demands of industrialized countries, but focused instead on longer-term approaches that could be adopted by ESCWA member countries.
Statements were also made by the representatives of Japan, Philippines (on behalf of the Association of South-East Asian Nations (ASEAN)), Brazil, China, Togo (on behalf of the Organization of African Unity), Republic of Korea, India, Algeria and Peru.
The High-level Event, scheduled for the first quarter of 2002, is aimed at meeting the long-term imperatives of eradicating poverty and fulfilling the social and humanitarian goals set by global conferences of the 1990s. The work of the Preparatory Committee is to address the broad development concerns expressed by world leaders at the Millennium Summit, particularly the obstacles developing countries face in mobilizing the resources needed to finance their sustained development.
The Preparatory Committee will meet again at 10 a.m. Tuesday, 13 February, to continue its general debate, and to review the inputs to the substantive preparatory process to the High-level Event.
Committee Work Programme
The Preparatory Committee for the High-level International Intergovernmental Event on Financing for Development met this afternoon to continue consideration and review of the inputs to the substantive preparatory process and the High-level Event. (For background, see Press Releases DEV/2283 issued 9 February and DEV/2285 issued today.)
Procedural Matters
Before beginning its work this afternoon, the Committee approved an additional list of non-governmental organizations recommended by the Bureau for accreditation to participate in the substantive preparatory process and the High-level Event (document A/AC.257/10/Add.2).
BOB FRANCIS JALANG’O (Kenya), speaking on a point of order, reiterated an offer made last year by his Government to host the upcoming High-level Event.
Statements
MARTIN BELINGA-EBOUTOU(Cameroon), speaking in his capacity as President of the Economic and Social Council (ECOSOC), urged the Committee to bear in mind the development commitments made by heads of State and government at the Millennium Summit. Those leaders had pledged the utmost cooperation to work towards achieving success at the upcoming High-level Event. Because of its universality and democratic nature, he added, the United Nations must guide the direction of the international community as the agenda for the Event began to take shape. At the same time, the Organization must rely on the input of all relevant international actors. Indeed, broad cooperation at all levels might provide the impetus that would draw the international community closer than ever towards consensus on important development issues.
He said that through the years, ECOSOC had developed close ties at all levels through political dialogue. Now, every ECOSOC session included a high-level segment that focused on a development issue that was deemed of particular concern. It had also developed an ongoing relationship with the Bretton Woods institutions. The ECOSOC had taken new measures, involving non-governmental organizations (NGOs) and the private sector in its discussions of development issues and initiatives. In that regard, just last year the Council held a high-level segment on information technology and its impact on development. Those were just a few of the ways ECOSOC had established a framework in which all international players could identify key issues, work on agreed commitments together and, importantly, work to ensure the financing of broad sustainable development during a time of globalization.
Moreover, he continued, the Assembly had requested ECOSOC to work to find ways to promote social and economic development and to ensure greater equity in the world economy. In that regard, the Council would host a meeting in April involving high ministers from financial institutions, which would bring attention to those issues at the political level. The Council had emerged as a central forum, where all the strategic partners involved in development could meet and discuss all issues on the international agenda. The preparatory process for the Event and its follow-up must take into account the potential role of ECOSOC in helping achieve the Committee’s agreed goals and objectives.
JOSÉ ANTONIO OCAMPO, Executive Secretary for the Economic Commission for Latin America and the Caribbean (ECLAC), said that as the current coordinator of the regional commissions, he was pleased to report that all five of the regional commissions had organized regional consultative meetings in their respective regions in the past year. Their reports had been submitted as documents of the Preparatory Committee.
He said the regional consultative meetings were organized, in addition to the United Nations Conference on Trade and Development (UNCTAD), in close collaboration with the regional institutions in the relevant field, including, particularly, the regional development banks. Further, the consultations involved other relevant stakeholders at the regional and subregional levels, such as the NGOs, business community and research institutions. The reports reflected unique regional and subregional perspectives on the relevant issues. They identified specific regional and subregional needs and accordingly contained relevant recommendations from the respective regions.
Speaking on the Latin American and Caribbean Regional Consultation on Financing for Development held in Bogota, on 9 and 10 November 2000, he said its work was structured around five thematic panels. A document prepared by the Commission’s Executive Secretary to aid discussions pointed out that during the 1990s renewed access to external financing allowed for improvements in macroeconomic management, lower inflation and modest economic growth in the region. It stated, however, that with the exception of foreign direct investment, external flows were volatile and did not generally reach less developed countries.
The document said the international community should work with the private sector to promote long-term financial flows, especially foreign direct investment, to all developing countries, and to facilitate market and institutional mechanisms that would make other types of private capital flows, especially credit, available to all developing countries.
He said a group open to all delegations from the region was also formed on the first day of the consultations and worked concurrently to the panels to prepare the perspective of those countries. The group approved a statement which pointed out that, despite the many difficulties faced by their countries, during the past decade they had worked to achieve economic growth with equity. Those efforts had been reflected in advances in the area of macroeconomic management, consolidation of the fiscal situation, economic and trade liberalization, price stabilization, the reactivation and intensification of regional economic integration, and the expansion of South-South cooperation.
He said they, nonetheless, noted major concerns affecting financing for development, which should be considered in the creation of a supportive international environment that would complement domestic efforts. Their concerns included the vulnerability of their economies to the instability of sources of external finance and the unequal flows of foreign investment and access to private capital markets.
K.Y. AMOAKO, Executive Secretary for the Economic Commission for Africa (ECA), said its consultative meeting held in Addis Ababa from 15 to 17 November 2000 included three high-level expert panels organized around specific sub-themes related to financing for development. He said the preparatory meeting was unique, in that it was timed to coincide with the ECA Conference of African Ministers of Finance.
He said that, on domestic resource mobilization, it was concluded that while domestic savings should be the main source of investment finance, current levels of savings and investment were too low to ensure broad-based, sustained and equitable growth in the region. Significant external support would, therefore, be needed until incomes rose substantially and domestic savings picked up. The panel on international resource mobilization underscored the crucial role of private capital in helping fill the huge financing gaps that existed in most African countries.
The panel on enhancing African participation in the global economy recommended key steps that the developed countries could take to support Africa’s efforts. Building upon the recommendations of the panel of experts, he said he proposed to the Conference of African Ministers of Finance a global compact with Africa, wherein rich countries would be willing to invest the necessary resources, through aid, debt relief and market access, to give African economies the jump-start they needed. African countries would, in turn, put in place the necessary political and economic reforms to ensure that their economies took off.
He said the idea of a compact with Africa elicited a strong positive response from participants, particularly from African ministers, who felt that Africa had special requirements and thus needed its own relationships on those topics. The Conference of Ministers passed a resolution requesting ECA to consult with relevant stakeholders and to elaborate the details of such a compact for consideration at the next ECA ministerial meeting.
DANUTA HUEBNER, Executive Secretary for the Economic Commission for Europe (ECE), said the Commissions’ regional conference in Geneva had brought together all actors -- including ministers, bankers, business community representatives and academia -- expressing interest in improving the financing for development process in that region. The debate that followed proved that development financing, generally identified as a long-term and complex process, required broad regional cooperation. The debate also showed that lessons learned during the process of transition to a market economy and democracy, a change affecting 26 countries in the region, could make the process of development more efficient.
She said that participants also agreed that countries with economies in transition needed both mobilization of domestic development potential and an enabling environment that allowed growth of trade and access to financial markets. The complementarity of various forms of finance was also stressed, and while agreeing on the importance of private funds, participants highlighted the continuing relevance of public funds.
She said that the importance of the role of local actors was also emphasized. State decentralization reforms should be seen as a catalyst for greater participation by the local community in regional development projects. In that context, the need to generate new and innovative forms of financing was stressed. Close regional and subregional cooperation was seen as a means of optimizing the use of limited resources. Overall, the regional debate had been pragmatic and aware of national diversity. It had stressed the key developmental role of institutions and made clear that for progress in development financing, regional dialogue was a must.
KIM HAK-SU, Executive Secretary for the Economic and Social Commission for Asia and the Pacific (ESCAP), said the highly diverse geographical nature of his region meant that “one size fits all” recommendations would be irrelevant in discussions of financing for development. That fact had been recognized by the participants and had set the stage for a stimulating regional debate.
He said there was a recognized need for the ESCAP region to develop some longer-term savings instruments to avoid financial crisis. That issue could be approached through the promotion of national bond markets, structured finance and other financial innovations. The diversification of national financial sectors, so as to reduce reliance on banks as the primary instrument for translating savings into investment, was also identified as a priority task. There was also a large measure of consensus in the region on the need to be cautious about the liberalization of the capital account.
He went on to say that there was broad agreement during the regional meeting for using information technologies in mobilizing and utilizing financial resources. Using new technologies should help make markets within the region more robust and enable them to cope better with external capital flows. Official development assistance (ODA) also remained essential for many developing countries in the region. There was broad agreement on the need to increase ODA, as well as the recognition that actions were needed in improving terms and conditions and disbursement.
MERVAT TALLAWY, Executive Secretary for the Economic and Social Commission for Western Asia (ESCWA), said the meeting in her region discussed the issues identified by the Committee, namely: the mobilization of domestic and international financial resources for development; and systemic issues. It was important to note the interrelationship of all the issues before the Committee. Therefore, the regional meeting had touched upon questions of debt, trade and ODA, even though they had not been officially designated as topics for consideration at the meeting.
She said it was also important to note that the regional meeting did not confine itself to the demands of industrialized countries. Instead, attention focused on longer-term approaches that could be adopted by ESCWA member countries. The participants underscored the importance of sound monetary and fiscal policies and of preserving the gains achieved through financial stabilization. They also stressed that economic stability was essential for promoting domestic savings and investment, as well as attracting foreign capital.
In the course of their discussions, participants also identified certain priority areas in which developing countries should seek assistance from the international community, she continued. Because the ESCWA member countries were particularly vulnerable to the volatility of oil revenues, participants stressed the need to stabilize resources for development. They further called on industrialized countries to refrain from protectionism in its various guises and allow developing countries to benefit from their respective comparative advantages. The participants did not ignore the social component of development, highlighting the necessity of maintaining sufficient resources to achieve social development objectives and of increasing the return on investments to the social sphere.
HIDEAKI KOBAYASHI (Japan) said the enhancement of domestic and foreign private investment should be one of the strategic objectives of financing for development. In particular, foreign domestic investment was beneficial not only for developing countries, but also for the developed countries from which it originated, a "win-win situation". Foreign direct investment also provided a practical means to measure progress. For maximizing private investment, priority must be given to improvement of the domestic environment in developing countries by pursuing a stable and sound macroeconomic policy, strengthening the financial and fiscal system, eliminating corruption, and developing effective governance systems.
The international environment for foreign direct investment should also be improved, he said. One suggestion would be to use the system in developed countries of insuring international investment and trade. Consideration of concrete ways in which the business community could be fully involved, was also important. Enterprises established by private investment required markets for their products. Accordingly, lowering trade barriers in developed countries would facilitate private investment in developing countries, he said.
Official development assistance was useful, and sometimes even critical, for enhancing private investment in developing countries, he continued. It facilitated private investment by improving economic infrastructure and could fund technical cooperation. The issue of debt might be approached in a new and more constructive manner. Better global governance in international financial institutions, as well as improved policy coordination among development-related international organizations, would contribute to making the international environment more investment friendly, he said.
ENRIQUE A. MANALO (Philippines), on behalf of the Association of South-East Asian Nations (ASEAN), aligned the position of the Association with that of the statement made by Iran on behalf of the “Group of 77” developing countries and China. He underlined the importance of the financing for development process as a way to address development financing in a coherent manner, through partnership between developed and developing nations. The process was also an opportunity for the United Nations to fulfil its moral and agenda-setting responsibilities in the area of development.
The preparatory process, he said, should aim for a clear, detailed plan of action for each thematic area, based on balanced political commitments from both developed and developing countries. In a coherent approach, linkages among the various dimensions of development should be emphasized, without avoiding aspects unique to specific thematic areas.
He said that the recommendations of the Secretary-General's report were useful to stimulate discussion in the right direction. Those recommendations should be strengthened at the current Preparatory Committee, to produce a more focused, specific and substantive exchange at the next Committee meeting. He called for the international community to make new commitments, and to dedicate additional resources to development. An incremental approach to development was no longer useful. He called for committed, decisive, and meaningful action.
GELSON FONSECA (Brazil) said integration should be the key concept of the work of the Preparatory Committee. First, integration of the main stakeholders. He said a constructive and participatory dialogue was already taking place with the involvement of all agencies and institutions whose work was related to finance for development, governments and civil society. It was reassuring that the International Monetary Fund (IMF), the World Bank, the World Trade Organization (WTO), and UNCTAD were participating in the process.
He underlined the contribution of civil society and the private sector, and said their participation was crucial. He spoke of the need for the integration of all countries into globalization. As globalization currently stood, there was a risk that the gap between rich and poor countries could increase. The challenges of globalization must be confronted from a human perspective, he said.
Brazil was following an economic policy that had promoted sustainable fiscal and current account balances, warded off inflation, ensured appropriate banking oversight standards and created incentives for mobilization of domestic resources and the development of a dynamic stock market. The policy had allowed the Government to promote economic growth with stability and to attract foreign direct investment, which last year amounted to $30 billion. It was, however, aware that all those efforts would be hampered without an enabling international environment.
The international community should make its best effort to ensure the stability of the international financial system, he said. Brazil supported the principle that resources freed by debt cancellation should be used in poverty- reduction programmes. Brazil welcomed the Secretary-General’s recommendations on the enhancement of the coherence and consistency of the international monetary, financial and trading systems in support of development, and on the strengthening of the role of the United Nations.
ZHANG XIAO’AN (China), stressing the importance of full participation by all stakeholders, the Bretton Woods institutions and the WTO in promoting development, said that for a long time the lack of development finance had seriously undermined the economic development of developing countries. How to reduce the gap between North and South and to promote development was now a question of urgency before the international community. Its solution depended on the political will of the countries concerned and involved more profound issues such as the improvement of the international financial and trade systems, as well as the establishment of a just and equitable new international economic order.
He expressed the hope that the developed countries would adopt an active and cooperative attitude so that the final event on financing for development could really achieve the expected objectives. The final event did not mark the end of the process, but rather a turning point, opening a totally new chapter of international cooperation and promoting real partnerships for international development cooperation. The final event should be a self-standing United Nations conference at the highest level, which should adopt a forceful political declaration and an action-oriented document containing clear commitments. At the same time, an appropriate follow-up mechanism should be worked out to review their implementation.
Effectively mobilizing and utilizing resources was of critical importance to the economic development of the countries concerned, he emphasized. While developing countries should rely on their own strength and the improvement of the managerial skills for development, their efforts were limited by their low economic development level and their poor capacity and potential in mobilizing and managing domestic resources. Moreover, the quick pace of globalization had enabled external factors to exert a direct impact on efforts for domestic financing for development.
Noting the importance of attracting foreign private capital to facilitate economic development, he said developing countries had worked very hard to improve their investment environment and attract foreign investment. Regrettably, however, the lion's share of private investment was occurring among developed countries, and the majority of developing countries were excluded from its benefits. Despite the enormous efforts made by developing countries in opening up markets, developed countries had not fulfilled their long-due commitments made at the Uruguay Round and had put up trade barriers for the competitive products from developing countries, especially textiles, which had undermined trade development for developing countries.
While ODA had an irreplaceable role in financing for development, especially regarding environmental protection, poverty alleviation and social development, it had decreased in recent years, he stated. The scope of recipients had become increasingly narrow, with more and more conditionalities attached. In addition, the heavy debt burden had not only seriously hindered the economic development of developing countries, but also caused serious social problems. A fundamental solution to the debt problem lay in the promotion of economic development. The implementation of the Heavily Indebted Poor Countries (HIPC) Initiative was useful in reducing the burden of debtors in the short term.
GERT ROSENTHAL (Guatemala) said his statement would be brief, as he would associate his intervention with those made on behalf of the Group of 77 and the Rio Group. Beginning where those statements left off, he said that the Committee must not miss the opportunity to convert the preparatory process into a high- profile affair consistent with the Declaration that had come out of the Millennium Summit. Instead of building the foundation for a conventional event, which followed the pattern of other global conferences, the Committee should work towards presenting an exceptional watershed event that would respond creatively to the main challenges facing the development community in the new century.
He said that one requirement in achieving such an “indispensable” Event would be to fully exploit the comparative advantages the United Nations offered to address the topic at hand. That was to say that the agenda, format and outcome of the Event should be reflective of those things the Organization did best, namely, utilizing its capacities to enlighten and to impact public awareness. Another way to achieve an exceptional event would be to consolidate partnership with the multilateral financial institutions and other relevant stakeholders.
He went on to say that it would be important for the Committee to ensure that its recommendations on domestic efforts and international cooperation for financing for development mutually enforced each other. There was also a need to carefully select for review subjects that brought about commitments in the areas of domestic policy and international cooperation. Finally, the Committee must give attention not only to the final outcome of the Event, but to ensuring a comprehensive preparatory process that would have intrinsic value as a vehicle to share, disseminate and clarify ideas.
SIMBAWA AWESSO (Togo), on behalf of the Organizations of African Unity (OAU), said efforts should be made to find solutions to the problem of harnessing financing for development. He called for an increase in ODA, which was falling. There must be initiatives on the six key issues identified in the report of the Secretary-General for consideration by the Preparatory Committee. He underscored the importance of the participation of the international financial institutions.
He said the issue of financing for development was entering a critical phase. The number of people living in extreme poverty had increased, and they were mainly women and children. More than half of the population of sub-Saharan Africa lived in poverty. He said the economic and social condition of people in the developing countries, particularly Africa, was worsening. They also suffered under foreign debt, whose servicing was a serious problem. He recalled that the Secretary-General had noted the rise in the debt burden. He hoped no efforts would be spared in ensuring the success of the High-level Event.
SUN JOUN-YUNG (Republic of Korea) said the agenda of the High-level Event should be dealt with in a holistic and integrated manner. The focus should be on priority areas to extract clear and concrete policy recommendations. A clear vision was needed, well in advance, of the shape and content of the outcome document. He favoured a concise declaration expressing the strong political will of Member States to follow up on the Event.
He said the success of the financing for development process depended largely on proper inputs from civil society and the private sector, as well as key institutional stakeholders. Furthermore, the inputs from regional consultations would be instrumental to the success of the process. The task before the Preparatory Committee was how to promote the concrete contribution from those actors. The challenge ahead was determining how domestic resources would be generated and how efficiently they would be channeled into development ends. He stressed the importance of policy coherence and efficient coordination among the relevant stakeholders throughout the process.
KAMALESH SHARMA (India) said globalization had magnified the existing sense of disempowerment among the weaker participants in the global economic systems. People must have confidence that the world economic system was being fashioned for the benefit of all, with sensitivity for the national priorities and concerns of developing economies. The United Nations had a special responsibility for providing constructive and collective action would include political, social and economic perspectives.
He said mobilization of domestic financial resources was the foundation of self-sustaining development, and developing countries were making concerted efforts in that direction. The success of domestic resource mobilization, however, required an enabling international environment. In many economies, external resources were catalysts for augmenting domestic revenues. Trade and capital flows were increasingly important instruments for generating resources for developing countries. That should, however, not distract from the traditional role of ODA in capacity-building. The role of ODA must be reaffirmed and the sinking graph of compounded ODA must be reversed towards the approved target.
Debt-relief measures for developing countries would free resources to be ploughed back into the eradication of poverty and development, he said. The Paris Club methodology and scope for debt relief was limited. The fact that substantial debts were nowadays owed to a variety of private investors created significant complications. Also, debt relief should not be at the expense of other international development assistance. External private capital and foreign direct investment could play a role in complementing domestic financial resources. The volatility of short-term capital flows and the corresponding need to establish appropriate mechanisms to contain sudden capital flights, however, were serious challenges that needed to be addressed.
ABDALLAH BAALI (Algeria) said that for countries of the South, financing for development was of basic importance. While the heads of State and government at the Millennium Summit had expressed the obstacles facing the international community in achieving development financing, countries in the South had long seen the viability and relevance of convening a high-level event on the issue. Indeed, questions relating to poverty, environmental degradation and the effects of globalization had been constantly addressed, while the gap between North and South continued to widen.
It was important to note, he continued, that countries in the South had not called for a replacement of the Bretton Woods institutions. What they hoped would occur at an intergovernmental event on development financing was that a consensus would emerge that recognized the fact that international mechanisms for such financing had reached their limit and must be reconceptualized to meet the challenges of today. The South was also looking for a new and dedicated commitment from the developed world that industrialized countries would mobilize and take action in that regard.
Turning to share his preliminary thoughts on the Secretary-General’s report, he said that mobilizing resources for financing for development was essential. The developing countries had often found creative ways to approach that issue, often times out of necessity, but mostly as a show of commitment. It was disheartening to note that international flows had helped only a few developing countries. The industrialized world must work to actively change that, namely, by opening up trade barriers.
He went on to say that external debt was also a serious hindrance for countries seeking to enhance their development. Algeria welcomed the HIPC initiatives, but believed that only debt cancellation and substantial debt relief for middle income countries was the only way to successfully address that problem. It was also important to note the importance of ODA. In that regard, he urged the donor community to breath new life into the development assistance system.
Finally, he said his delegation was committed to an international conference that addressed the following: creating an enabling international environment for the mobilization of resources for financing for development; effective and comprehensive debt-management measures; the catalytic role to be played by the United Nations in the development financing process; coordination of policies for development; and establishing comprehensive mechanisms to regularly review implementation of the outcome of the Event.
JORGE VALDEZ (Peru) said the ultimate purpose of the preparatory process was to achieve a collective and comprehensive understanding of the global aspects of financing for development, in order to enhance the mobilization of domestic and foreign resources required to achieve sustained socio-economic development. The world economy had abruptly changed after the cold war from an economy characterized by division into one characterized by globalization. That had resulted in the socio-economic marginalization of large portions of the planet.
He said it was, thus, important to promote and channel economic cooperation, as well as establish rules of international investment, trade and monetary affairs without neglecting such matters as debt burdens and the flows of ODA. That would ensure that the benefits of globalization were distributed in the broadest possible manner. It would also ensure that those inevitably affected negatively from the application of market forces would continue to believe in the relevance of the system.
The United Nations, he continued, was the appropriate forum for considering such development financing issues. Indeed, it was the only place where important developmental matters could be approached from an integrated or consensus perspective. The main focus of that consensus should be based on a mutual desire to make globalization an inclusive process, so that all nations could share its benefits. Financial flows should also follow political consensus.
He said that international trade was the most important mechanism that could be used to expand domestic savings and finance development. It was, therefore, urgent to solve the problems of market access, particularly within the sector of textiles and foodstuffs, as well as to approve mechanisms and programmes that would facilitate the expansion of exports.
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