NGLS Roundup 91, May 2002

Monterrey: Building Momentum for Financing Development

Opinions abound on the impact of the International Conference on Financing for Development (ICFFD), held in Monterrey (Mexico) from 18-22 March 2002. While some suggest that the conference, which was the culmination of a multi-year process, signaled the dawning of a new era for development efforts—based on mutual accountability, coherence and renewed commitment—others express deep disappointment in and cynicism toward a conference that resulted in “more of the same,” instead of innovative approaches and bold institutional and policy reforms that they say are needed. Somewhere between the two are those who, while frustrated by the lack of substantive advances made by FFD, recognize the achievement in having the United Nations convene a comprehensive meeting on economic and financial issues involving key development actors, which nurtured greater inter-ministry cooperation and civil society participation.

Those who hold up Monterrey as a success do so for a multiplicity of reasons. To begin, though no negotiations took place at the conference itself, a clear and consistent message emerged: the Millennium Development Goals (MDGs) can be a unifying mechanism for all poverty reduction and development efforts; the New Partnership for Africa’s Development (NEPAD) symbolizes a new paradigm for “home-grown” development and developing country leadership; and the 4th Ministerial Meeting of the World Trade Organization (WTO) in Doha (Qatar) last November has set in motion trade talks that could bring enormous benefit to developing countries.

Secondly, participation was at the highest level including the heads of the United Nations, World Bank, International Monetary Fund (IMF) and WTO as well as over 50 Heads of State and Government, including US President George Bush, accompanied by Secretary of State Colin Powell and Secretary of the Treasury Paul O’Neill. This created the opportunity for contentious issues such as reform of the international financial institutions (IFIs), biases in the international trade regime and Special Drawing Rights (SDR) allocations and “new issues” like a currency transaction tax (CTT), and the creation of an Economic Security Council to be discussed at the highest levels and among key policy makers in a variety of ministries.

Thirdly, the principal institutional development actors and bilateral donors are now starting to think in terms of a “Global Deal” or as Gordon Brown, the Chancellor of the Exchequer (United Kingdom) has put it a “Marshall Plan to fight poverty,” (see Go Between 88). The essence of such a deal is “mutuality,” a term which was used consistently throughout Monterrey and meant to convey the need for developing countries to continue political and economic reform in support of increased social spending, better governance and better climates for private investment and the reciprocal obligation of developed countries to support such changes with higher and more effective official development assistance (ODA) transfers, a fair and equitable trade regime and higher levels of foreign direct investment (FDI) spread more evenly among developing countries.

Some add that while Monterrey was not only about money, it did result in concrete financial commitments most notably from the United States, and the European Union (EU). An announcement from the EU was not entirely surprising as some of its members contribute the highest levels of ODA and even exceed the 0.7% of gross national product (GNP) level. However, many do fall short of the target and as a result, the EU has pledged to reach a collective average of 0.39% by 2006 with all members making every effort to at least reach the level of 0.33% that same year. Aid from the EU and its Member States will increase by about Euros 8 billion (approximately US$7 billion) per year by 2006 from its current level of Euros 27 billion, more than 50% of the world’s ODA. In a more surprising move, the United States made a two-stage announcement and pledged to increase its core development assistance over three years by 50%, or a US$5 billion annual increase over current levels. Under this new plan, US ODA would reach approximately US$15 billion by 2006 and be held in a “Millennium Challenge Account.” In announcing the new initiative, President Bush called for a new compact for global development, which he said should be defined by a new accountability for both rich and poor nations alike. Some suggested that while this move likely came in exchange for the omission of an explicit commitment to fulfill the 0.7% target in the outcome document, it went, in one delegate’s words, “beyond the narrow limits of the possible,” as it was the first increase in US ODA in over ten years.

ICFFD had its critics as well, comprised mostly of civil society representatives, and some developing country delegates, who said they began their involvement in the FFD process supportive of the UN trying to play an enhanced role in economic and financial matters and positioning itself to balance out the stark neo-liberal, conditionality-based approach of the Bretton Woods institutions (BWIs). Over the two to three year preparatory phase, inputs such as the Secretary-General’s report (see Go Between 84), the High-Level Panel report (see NGLS Roundup 78) and the Hearings with Civil Society (see NGLS Roundup 71) raised expectations that breakthroughs could be made on tax cooperation, corporate accountability, democratization of the IFIs, new forms of financing, a debt arbitration mechanism, and curbing financial volatility. However, they argue that in the end the agendas of the Group of Seven (G-7) countries, WTO and the BWIs dominated the process, prevented any significant reform of the development model, and stifled the adoption of innovative proposals on such issues as global public goods and the exploration of an apex body to fill global governance gaps.

Instead, the focus of the conference turned toward improving the quantity and quality of ODA and endorsing uncritically the “Doha Development Agenda,” while refusing to use FFD as a venue to concretely address such issues as the current debt relief framework and corporate accountability. Some go further, however, to suggest that FFD was in fact a retrograde step for development and conferred greater legitimacy on an approach that defers to the unmanaged opening of markets and an unregulated role for the private sector at the expense of social considerations. The central role of the UN, they say, will not translate into holding the BWIs and WTO more accountable to human rights and democratic standards but will instead see the UN trying to put a human face on globalization and “marketization” of developing countries.

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Quotes From Monterrey

“We must guard that NEPAD is not being turned against us as a tool for new conditionality. If partners want to come on board they are welcome now, as before, but contribution must not only be limited to words and good advice.”

—Olusegun Obasanjo, President of Nigeria

“The goal of our development aid will be for nations to grow and prosper beyond the need for any aid. When nations adopt reforms, each dollar of aid attracts two dollars of private investments. When aid is linked to good policy, four times as many people are lifted out of poverty compared to old aid practices.”

—George Bush, President of the United States

“Economic globalization has outpaced political globalization. In my view the establishment of a high level Global Council is a worthwhile proposal to overcome the current inadequate representation of developing countries in international fora.”

—Heidemarie Wieczorek-Zeul, Federal Minister for Economic Cooperation and Development of Germany

“Preventing moral hazard cannot be invoked to justify actions that are totally unjustifiable from an ethical point of view, such as the temptation to punish an entire people—honest and poor women, men, children—for misguided monetary policies and macro-economic mismanagement encouraged or tolerated by a significant part of the international financial community for years.”

—Rubens Ricupero, Secretary-General, United Nations Conference on Trade and Development (UNCTAD)

“We must, here in Monterrey, agree to find the resources to end the misery and degradation. At the Johannesburg World Summit on Sustainable Development, we must then fill in the detail, and do so in confidence, knowing that the plans will be fully financed in the future.”

—Thabo Mbeki, President of South Africa

“Terror is not the voice of the poor. But [September 11] brought home to us all a recognition that we have to address poverty, lack of development and social injustice in a serious manner if we are to win the long-term battle against international terrorism.”

—Kjell Magne Bondevik, Prime Minister of Norway

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INSTITUTIONAL STAKEHOLDERS COME TOGETHER

One of the key challenges of the FFD process was to get the primary institutional stakeholders of the development process, namely the UN system, World Bank, IMF and WTO to dialogue with each other to ensure that their efforts were coherent and mutually supportive of poverty eradication and development.

The addresses to the conference plenary by the heads of these four institutions reflected their agreement that this challenge had been met by FFD and had laid a foundation for future engagement.

UN Secretary-General Kofi Annan remarked that it was an “extraordinary” achievement to have had the UN, WTO and BWIs working together to prepare the conference. He said that their involvement along with national ministries, the private sector and civil society had for once allowed the many actors in the development process to tackle the issues together. Mr. Annan addressed the criticism of the Monterrey Consensus by saying, “It is not a weak document…it will be weak if we fail to implement it.” He went on to say that if participants lived up to the promises contained in the outcome document, it could mark a “real turning point in the lives of poor people all over the world.”

He said it was urgent to understand that developing countries were not asking for “handouts.” Rather, he said they were asking for the following: a greater voice at the table when the management of the global economy is being discussed; fully and genuinely open markets of the developed world and an end to unfair subsidies; relief from unsustainable debt burdens; and significant increases in ODA.

Mr. Annan reminded the plenary that an additional US$50 billion would be required annually to reach the MDGs. He said the announcements made by the US and the EU “clearly reflected a new spirit and a revival of commitment to aid” and that such money would be used most efficiently if recipients were free to choose the suppliers and contractors that best meet their needs.

President of the World Bank, James Wolfensohn, remarked that perhaps for the first time an international meeting had been able to convene Heads of State and Government, ministers of foreign affairs, finance, development and trade, representatives of civil society, the business sector and international institutions. He said the meeting was also significant because it was rooted in a consensus about what needs to be done and signaled a new era that would be based on partnership.

“This new partnership,” he said, “is an understanding that leaders of the developing and developed world are united by a global responsibility based on ethics, experience and self interest.” He said that the makings of the partnership could be seen in a new generation of developing country leaders who were tackling corruption, putting in place good governance, giving priority to investing in their people, and establishing an investment climate to attract private capital. Mr. Wolfensohn remarked that they were not being coerced into adopting these strategies but rather because “they know it is right” and urged support for them.

He referred to the World Bank’s support for the MDGs and acknowledged that even if developing countries carry out a comprehensive development strategy by replicating successful microcredit projects, by targeting debt reduction to poverty programmes, and by creating good governance and effective legal, judicial and financial systems, without the additional US$40-60 billion annual increase in resources, the world will not achieve the MDGs. The conference was not just about finances though, Mr. Wolfensohn said, and urged rich countries to take important action on trade policy to eliminate trade barriers and cut agricultural subsidies.

In his remarks to the Plenary, Managing Director of the IMF Horst Köhler also pledged his institution's active role in the achievement of the MDGs. He recommended developing a comprehensive and transparent system to monitor progress toward the MDGs, and identifying the responsibilities of all players in this effort that would involve developing countries, donors, international institutions, the private sector, and civil society. “I would have no hesitation in subjecting the IMF to the scrutiny of such a monitoring system,” he added.

Mr. Köhler also said that he welcomed the intensive and critical debate about globalization and said that was how the world could work for “better globalization—one that provides opportunities for all, and one in which risks are contained.” While more integration of economies was still needed, he said that this should be balanced by stronger international cooperation to guide and shape the process for desirable ends.

Calling trade the most important avenue for self-help, Mr. Köhler, like other institutional heads, urged that Doha be the start of a true development round. He said that the international community should respond to developing countries’ efforts with open markets and no trade distorting subsidies, ODA levels at 0.7% of GNP with funds increasingly channelled to budget support, debt relief and support for capacity building that would enable developing countries to implement reforms.

Referring to the recent Poverty Reduction Strategy Papers (PRSP) review, Mr. Köhler closed by saying that the IMF itself was in a learning phase. He acknowledged that there was room for improvement in developing the instrument and highlighted some areas where the Fund would adjust its approach: tailoring the PRSP to the needs of individual countries based on an open dialogue with stakeholders about the content of reforms and alternative proposals; paying more attention to sources of sustainable growth, poverty and social impact analysis; and encouraging donors to align their assistance with PRSPs, to simplify and harmonize their procedures and to work for more predictable aid flows.

Mr. Köhler also said the IMF was undertaking a variety of institutional changes to address deficiencies in transparency of itself and member countries, increasing cooperation with other international institutions, especially the World Bank and UN system, focusing more on the IMF’s core responsibility for macro-economic stability, and trying to define more clearly the role of the IMF and private creditors in financial crises.

Unlike that of the World Bank and the IMF, the involvement of the WTO as an institutional stakeholder in the FFD process was not prominent. However, the issue of trade and Doha in particular received considerable attention. WTO Director-General Mike Moore began his plenary remarks by suggesting that developing countries could gain in excess of US$150 billion annually from further trade liberalization and lift 320 million people out of poverty by 2015. However, before developing countries could maximize the potential benefits from trade, he said action in the international trading system needed to take place in four areas:

—first, current agricultural practices of the Organisation for Economic Co-operation and Development (OECD) were displacing developing country producers and farmers and depriving developing countries of potential foreign exchange;

—second, countries have not yet fully implemented changes in textiles and clothing policy, which is a vital sector for developing countries;

—third, tariffs peak on products in which developing countries are most competitive, and therefore need to be dealt with; and

—lastly, developed countries escalate tariffs as products undergo processing and thereby make it harder for developing countries to benefit from economic maturation and/or diversification.

Mr. Moore spoke of the importance of FDI to developing countries saying it is four times the amount of official development transfers and ten times the World Bank’s lending. He therefore encouraged work on an international agreement on investment while acknowledging that many countries feel ill-equipped to deal with what would be very complex negotiations. He said other aspects of development and good governance that needed attention at the highest political levels included the controversial issues of government procurement, competition policy and trade facilitation.

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More Quotes From Monterrey

“We call for the establishment of a global coordination mechanism for development between the North and the South.”

—Xiang Huaicheng, Minister and Head of the Delegation of China

“It is natural to consider drawing on the wealth created by globalization in order to finance efforts to humanize and control it. We therefore need to ponder more deeply the possibilities of international taxation, whose product would come on top of that of official development assistance.”

—Jacques Chirac, President of France

“We need an International Debt Arbitration Tribunal—one that would treat the creditors and the sovereign debtor fairly. We need such a framework to be conducted in a way that will empower citizens in debtor nations; and citizens in creditor nations—to exercise democratic oversight over international lending and borrowing. This is after all, public, not private money.”

—Ann Pettifor, Jubilee Project, New Economics Foundation

“Our markets are open, wide open.”

—Romano Prodi, President of the European Commission

“Today’s globalphobics are yesterday’s witches. Wise women, critical thinkers, sexually free, amazingly creative and full of proposals. Would you dare burn us again, now in the 21st Century? What burns is your phobias, not my critiques….”

—Friné López, representative, Millennia Feminista 

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 PARTICIPANTS HOLD IN-DEPTH DISCUSSIONS

As a way of encouraging debate and discussion amongst all stakeholders, twelve roundtable discussions were held at the Ministerial and Heads of State levels during the conference, involving approximately 800 participants representing governments, international financial institutions, UN specialized agencies, regional development banks, the private sector and civil society. Each session allowed seven NGO representatives, chosen by a collaborative process led by the International Support Committee to the NGO Forum. While some sessions, rather than serving as a forum for open dialogue saw a seemingly endless series of speeches, there were some lively exchanges on issues of policy coherence within governments, ODA, debt, the role of the WTO, and mandates and structures of the IFIs.

In the series of roundtables on “Partnerships for Financing for Development,” much discussion focused on the inadequacy in the levels of ODA and how it was perceived as a lack of commitment on the part of the industrialized world. While many welcomed the announcements by the US and EU on ODA, some argued that to be most effective this money would have to be untied. They suggested that conditionalities on the part of donors had for too long undermined the ability of recipient countries to use aid effectively, which in turn justified their low levels of financial support. The point was also raised that while ODA filled in some financing gaps for the poorest countries, nothing could compensate for international trade and investment regimes that worked against them.

Participants also concentrated their remarks on the use of the MDGs as a rubric under which all stakeholders could judge the purposefulness of their work and held up NEPAD as a key initiative deserving of support from the international community.

The four roundtables on partnerships resulted in numerous proposals, among which were:

—establishing international standards for “partnerships;”

—reducing expenditures on defense to augment social sector spending;

—establishing a global forum on taxation;

—shifting decision-making power for assistance programmes from donor capitals to their representatives in recipient countries; and

—pooling ODA into a single fund at the country level.

The second set of roundtables focused on “Coherence for Development” and explored its many dimensions at the national and international levels, in particular among government ministries, among international institutions, and among international institutions and developing countries. The varying levels of coherence in systems were attributed to a number of technical and political factors including the availability of information, levels of capacity, cooperation amongst actors, differences in policy preferences and competing mandates and objectives. Several participants asked how the international system would regulate itself to become more coherent. The UN was identified by many to be the appropriate body in this regard due to its decision-making structure, its universal membership and its perceived legitimacy among stakeholders.

Some developing country participants explained the impact of incoherence at the international level on national level efforts and asked how developing countries with limited capacities could manage conflicting approaches, messages and requirements coming from multilateral and bilateral donors. This meant that developing countries had to adopt short-term logic linked to financial markets at the expense of long-term objectives and predictability.

Some donor participants acknowledged that multilateral and bilateral donors had much to improve in the way of operations and reporting requirements, but said this did not lessen the urgency for developing countries to institute higher levels of democracy, establish the rule of law, and respect human rights. One participant referred to the recent critical PRSP review and said it was clear that coherence would have to begin with the formulation of a development strategy at the national level, which would involve all relevant players. A UN agency representative used the example of how structural adjustment programmes had in many cases resulted in a “care deficit” in the countries involved and its resulting increased burden on women. She urged that the writing of PRSPs involve women’s groups and other representative of civil society to ensure that development strategies did not hurt women and household inadvertently through “gender blindness.”

The issue of coherence within governments was discussed with some ministerial representatives noting how the FFD process had allowed them to work with other ministries in a way they had not done before. Some said the nature of bureaucracy lent itself to inter-ministerial competition for funds and visibility and questioned how things could change.

Participants explored the ramifications of incoherence amongst trade, investment and development policy. It was pointed out that while FDI can play a role in development, its positive impact was often neutralized or in fact undermined because developing country governments retained insufficient flexibility and autonomy to implement investment policies consistent with their development strategies. As a result, developing countries had to deal with the disruption of local industries, erosion of the local environment, and enter into destructive tax competition with other developing countries, while being unable to control the remittances of profits and dividends to foreign investors. Among the proposals made in this area were: subjecting FDI to social, economic and environmental impact assessments; enhancing the contribution of FDI to the productive resource base in a host country; ensuring that FDI has a long-term perspective in a host country; and connecting FDI with the transfer of appropriate technology.

While the majority of roundtable participants supported the Doha Declaration and the prospects for a development round, some expressed deep concerns over an international trade regime that allows developed countries to selectively protect certain sectors while not permitting developing countries to do the same. Some specific proposals made on this topic included: allowing developing countries to construct their own trade strategies rather than using a one-size fits all approach; assessing the impact of trade liberalization on development to better understand the complex relationship; and bringing the WTO into the UN system and upgrading its status to that of the BWIs.

The group of roundtables involving Heads of State and Government took up the theme “Looking Ahead.” Participants emphasized that Monterrey had created a momentum on which to build the principles of coherence, partnership, ownership and participation in decision making at national and international levels for all future work. Focus needed to shift toward implementation of what was agreed in the Monterrey Consensus, which would necessitate all stakeholders making concrete changes and following through on their pronouncements. In some cases this would require enormous political will to overcome obstacles, particularly in building support for development in the North. Some participants noted that this would be most difficult in the area of trade.

Some of the issues highlighted for further work included greater attention to labour standards, fair pay, working conditions, incorporating women into decision making at all levels, debt reduction, and innovative sources of financing. Some specific proposals raised by participants included: setting up an international task force to advance thinking on global public goods; bringing the WTO into the UN system; establishing an international humanitarian fund financed from traditional and non-traditional sources including taxes on speculative capital flows and confiscated proceeds from drug trafficking; and establishing an international economic/financial crisis prevention mechanism comparable to the proposed early warning mechanism for conflicts in the UN Security Council.

Participants emphasized that a clear framework in which to hold stakeholders accountable in their FFD implementation follow-up work was essential. While acknowledging that the UN should play this role at the international level, some participants supported the creation of regionally coordinated activities as well.

NGOS REJECT MONTERREY CONSENSUS

Prior to the ICFFD, several thousand NGO representatives gathered for three days (14-16 March 2002) in Monterrey at the “Global Forum: Financing the Right to Sustainable Development.” NGO representatives from around the world, including a large number from Mexico and Latin America, debated the issues on the FFD agenda with a view to developing alternatives, and explored the missing cross-cutting elements of the official outcome such as human rights, gender and the environment. After meeting for three days in panels, caucuses and plenary sessions, NGOs collaboratively drafted a position paper in which they rejected the Monterrey Consensus.

“The NGO Caucus is not part of the Monterrey Consensus,” said Laura Frade as she read the final statement of the Forum. “It is an insufficient basis for combating poverty or for advancing economic, social and cultural rights.”

Ms. Frade, who coordinated the Mexican Organizing Committee, went on to say that the Monterrey Consensus, or “Nonsensus” as NGOs were calling it, was cast within the prevailing economic model upheld by the World Bank, IMF and WTO and did not represent a “will to change” policies that were having negative economic, social, environmental, gender and cultural impacts.

The Global Forum crafted a set of proposals for an alternative economic model that it said places people at the centre of development, which include:

—Making human rights, as outlined by international human rights instruments, the over-arching framework and objective of the World Bank, IMF and WTO;

—Applying the principles of transparency and accountability in economic decision making at the local, national, regional and global levels;

—Applying no conditionality to ODA, debt reduction arrangements or national development plans;

—Ensuring greater autonomy for developing countries over their trade, investment and fiscal policies; and

—Fully integrating developing countries into international standard-setting and economic decision-making processes.

This statement was also delivered at the opening plenary of the ICFFD. Addressing the closing plenary of the conference, NGO representatives Monica Vincent (World Council of Churches) and Arjun Karki (Rural Reconstruction Nepal) said that despite NGOs’ disassociation from the Monterrey Consensus, they wanted to stay engaged in FFD follow-up and committed to mobilize their constituencies for implementation of internationally agreed development goals.

business sector activities

“No private sector investment means no development” was the conclusion reached by the International Chamber of Commerce (ICC), which acted as a principal business interlocutor to the ICFFD and helped organize a one-day International Business Forum in Monterrey with four days of follow-up dialogues.

In his closing address to the conference, ICC President Richard McCormick underscored that the “only long-term and sustainable source of development finance is private sector investment—both domestic and international.” He said that while ODA played a critical role for least developed countries (LDCs) it would never be sufficient. He highlighted some of the thirty concrete proposals that had emerged from the Business Forum and urged active participation of governments to help actualize them. These included:

—developing a global information clearinghouse to strengthen information and analytics in the global financial system;

—creating investment guides to bring LDCs and investors together;

—establishing a global programme for country restructuring funds to increase private sector finance for small and medium-sized enterprises (SMEs) in developing countries;

—incubating venture capital funds in developing countries;

—establishing a World Development Corporation to fund regionally-based operating companies; and

—financing power, water and infrastructure projects.

heads of state retreat

As host of the ICFFD, the Government of Mexico planned a number of high-level events that were held “within the framework” of the ICFFD but were independent initiatives of the Government. Some asked whether this approach made a “side-event” out of the conference and conferred too much importance on events like the closed Heads of State retreat hosted by Mexican President Vicente Fox.

Despite these questions, President Fox said the retreat was a success and while no concrete agreements were reached among the 40 Heads of State in attendance, participants were able to further strengthen the “Spirit of Monterrey” and usher in an era of greater mutuality in support of growth, development and equity. According to President Fox, participants discussed two broad issues: a new comprehensive agenda for development and the related role of the multilateral organizations and institutions. Three main points that seemed to emerge clearly from the discussion were: that development could not be achieved in a piece-meal fashion but required an integrated cooperation of all key actors; that shared responsibility was implicit in the interdependence created by globalization; and that global instruments would be necessary to address global objectives of development.

Retreat participants accepted that the globalization process held the greatest potential for promoting wellbeing with the caveat that all countries needed to be able to engage in the process according to their particular realities. While participants agreed on the need to expand the opening of markets and flows of private capital, some were critical of the simplistic analysis that pointed to market access as a solution for developing countries and suggested that trade policy needed to be consistent with a country’s overall development strategy and should take into consideration which sectors are being built up, what the level of value-added is, and the interlinkages with other sectors, in order to maximize development impact. Participants discussed the relationship between adopting good governance practices and gaining support from the international community and capital markets and how financing should be assured to those developing countries that follow such practices.

Other topics discussed were increasing the participation of developing countries in the decision-making processes of the IFIs, the possibility of the IFIs increasing the grant-to-loan ratio of their lending portfolio, adopting innovative schemes to profit from private capital flows and the need to diminish their cyclical nature, the issuance of Special Drawing Rights (SDRs), and the creation of a global environmental organization.

looking ahead

Throughout the Monterrey Conference, delegates emphasized establishing strong follow-up mechanisms to keep implementation of FFD and the achievement of the MDGs on track. Only four weeks after the conclusion of ICFFD, many of the same players came together in New York for the fifth annual High-Level meeting between the Economic and Social Council (ECOSOC) with the BWIs, held on 22 April 2002. This meeting takes place in New York immediately after the Spring Meetings of the BWIs and is expected to be a principal locus for FFD follow-up.

Addressing the meeting, UN Secretary-General Kofi Annan emphasized that development was now at the core of the international agenda and new elements were in place to make significant strides. “Where once we spoke about conditionality, the Monterrey Consensus is based on partnership, with shared responsibilities and mutual accountability,” he said, “Where once we debated over competing visions of development and how to measure it, we now have a common platform in the MDGs, which we will be striving to achieve and monitoring together each year.”

Trevor Manuel, Finance Minister of South Africa and Chairperson of the Development Committee raised some key issues that were also discussed in the Washington meetings, including the replenishment of International Development Association (IDA) and the increased use of grants in the IDA portfolio, as well as ensuring that all development goals have a lead manager/institution, a predictable source of funding, clear targets and result in indigenous capacity building. According to Mr. Manuel, coherence still needed to be addressed between national governments and the IFIs, between donors and recipients and among national ministries.

After a short plenary, two roundtable meetings were held to discuss issues for organizing the dialogue next year. Ambassador Shamshad Ahmad (Pakistan), ICFFD PrepCom Co-Chair, suggested that the annual ECOSOC-BWI meeting needed to be more of an outcome-oriented, substantive policy dialogue that would address effective implementation of the Monterrey Consensus. He acknowledged the fact that constant review would be necessary and asked at what frequency meetings should be held. Ambassador Ahmad recommended forming a high-level contact group with representatives from the UN General Assembly, ECOSOC, World Bank, IMF and WTO, which would develop proposals on implementation. He also suggested developing closer cooperation between the secretariats of the UN and the BWIs, and put forward the idea of forming ministerial teams that would focus on implementation.

NGO representative John Foster of the North-South Institute (Canada) reiterated that while NGOs present at ICFFD rejected the Monterrey Consensus they still very much wanted to be involved and maintain a dialogue on issues like developing country involvement in decision making, an Economic Security Council, and gender, which, according to him, were not sufficiently elaborated on in the Consensus.

Mr. Foster stressed that if NGOs were to continue their involvement in the FFD follow-up, they needed to see their views reflected in the official documents, which he said was not the case with the record of roundtables from Monterrey. Gemma Adaba of the International Confederation of Free Trade Unions (ICFTU) reminded participants that follow-up and monitoring exercises should not take place in a vacuum but rather within existing human rights frameworks and internationally agreed goals and principles.

While representatives of civil society have attended previous ECOSOC-BWI meetings, NGOs and the private sector were invited to participate for the first time in an effort to maintain the involvement of civil society actors engendered during the FFD process.

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“Let us be clear: Monterrey was not an end in itself. Our challenge now is to maintain the positive spirit that led to the Monterrey Consensus, and translate it into real and meaningful implementation. That Consensus has enormous potential to bring about significant, overdue change.”

“Where once ministers of finance, trade and development often pursued their work quite separately, today we understand the need for coherence and collaboration, which can reinforce each other’s work and make it more effective. And where once we were mired in misconceptions about official development assistance (ODA), today we see clearly that ODA can work in the right circumstances, and the Consensus is firm in its call for more and better ODA.”

“Today we also recognize, more than ever before, the need for good governance, sound macro-economic policies, debt relief and access to markets and foreign investment. We understand the imperative of fighting corruption and equitable burden-sharing in times of financial crisis. And we realize that developing countries must have a greater voice in economic decision making, and that the global monetary, financial and trading systems must work in better tandem.”

“We have a common vision, set out in the Millennium Declaration and now in the Monterrey Consensus. I hope that the unprecedented level of collaboration between the United Nations, the Bretton Woods institutions and the World Trade Organization will continue, so that our institutions can respond effectively to the new responsibilities that have been placed upon us.”

—Excerpts from UN Secretary-General Kofi Annan’s speech at the ECOSOC-BWI meeting, 22 April 2002

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Dialogue on PRSPs

In a related meeting organized by the World Bank and the IMF, representatives of the BWIs, United Nations Development Programme (UNDP), governments and NGOs discussed PRSPs and their potential linkages to the MDGs, the Monterrey Consensus and sustainable development.

John Page, Director of the Poverty Reduction Group at World Bank, began by noting the areas in which further work was needed on PRSPs: increasing outreach to parliamentarians and dissenters within civil society; linking PRSPs with other “policy-making moments,” particularly budgeting processes; defining the substance of PRSPs; monitoring outcomes and ensuring the international community lived up to its commitments; and developing indigenous capacity and forming appropriate institutions to implement PRSPs.

UNDP Administrator Mark Malloch-Brown addressed the question of the relationship between the MDGs and PRSPs, saying the two were not interchangeable but rather complementary. The PRSP process, rather than being a consensus-building exercise, he said, should allow for competing approaches and policies to be thrashed out. The MDGs could then serve as a buffer amongst competing views, assuming that they represent the end goal of all parties. Mr. Malloch-Brown suggested that the MDGs should also play a political role whereby societies could use them as a benchmark to hold governments accountable. “The MDGs have the potential to serve as a catalyst for the fall of governments,” Mr. Malloch-Brown posited.

A representative of Christian Aid, Irungu Houghton, welcomed the adoption by the World Bank of the MDGs as a framework for financing decisions. However, he questioned the degree to which the goals were actually influencing the PRSP process, arguing that structural conditionalities were not being subordinated to poverty considerations and that criticisms arising from public consultations did not influence the content of the strategy papers.

CONTACTS

Financing for Development Secretariat

UN Department of Economic and Social Affairs

2 UN Plaza, Room DC 2384

New York NY 10017, USA

telephone +1-212/963 4713

fax +1-212/963 0443

e-mail <ffd@un.org>

website (www.un.org/ffd)

Rosa G. Lizarde

NGO Interim Facilitating Group

32 Eighth Avenue, 2nd Floor

Brooklyn NY 11217, USA

telephone/fax +1-718/789 9747

e-mail <rosaencasa@aol.com>

This edition of NGLS Roundup was prepared by the United Nations Non-Governmental Liaison Service (NGLS). The NGLS Roundup is produced for NGOs and others interested in the institutions, policies and activities of the UN system and is not an official record.