General Assembly Session 59 meeting 106

The President

The General Assembly will now begin its High-level Dialogue on Financing for Development in accordance with resolutions 59/145 of 17 December 2004, 59/225 of 22 December 2004 and 59/293 of 27 May 2005.

Document A/59/823 contains a summary by the President of the Economic and Social Council of the special high-level meeting of the Council with the Bretton Woods institutions, the World Trade Organization and the United Nations Conference on Trade and Development.

Document A/59/855 contains a note by the Secretariat entitled "Summary of the informal interactive hearings on issues related to financing for development".

The overall theme of the High-level Dialogue is "The Monterrey Consensus: status of implementation and tasks ahead".

The High-level Dialogue will consist of a series of formal and informal meetings to constitute a policy dialogue and six interactive multi-stakeholder round tables. A more detailed programme is announced in the Journal of the United Nations.

We are gathered here today for the second High-level Dialogue on Financing for Development to assess the status of implementation of the Monterrey Consensus and to discuss future action to ensure that it is fully implemented.

The Dialogue is particularly significant, however, because it will enable us to pass yet another important milestone as we move towards the September High-level Plenary Meeting.

As these meetings begin, I should like to recall the very special process that has brought us here today. The International Conference on Financing for Development, held in Monterrey, Mexico, in March 2002, reflected the General Assembly's growing awareness of the developing countries' complex problems of development and their lack of financial resources.

The process begun in Monterrey is geared primarily towards exploring in depth the main interdependent factors that affect States' ability to generate and obtain the financial resources they need to develop.

The first phase consisted of carrying out an exhaustive study with the participation of various players -- including central banks, ministries for finance and trade, civil society and the private sector -- to identify the factors crucial to financing for development. Eight factors were thereby identified and were then grouped to fall within the six major areas of the Monterrey Consensus: mobilizing domestic financial resources; mobilizing private capital; international financial and technical cooperation; international trade; debt; and systemic issues.

In an unprecedented step, the World Bank, the International Monetary Fund and the World Trade Organization were invited to join the United Nations in a dynamic partnership in order that, together, they could find ways to mobilize new public and private financial resources to support national development efforts. The General Assembly, in recognizing that States have both an individual and a shared responsibility in the complex and multidimensional process of development, decided that the intergovernmental approach to financing for development should be comprehensive and should lead to the holistic partnership underpinning the Monterrey Consensus.

As members are aware, the Millennium Development Goals (MDGs), which were adopted in 2000 by heads of State and Government, are crucially interlinked with the Monterrey process, given the part that could be played by financing for development in freeing men, women and children from sub-human conditions of extreme poverty.

Looking towards the High-level Plenary Meeting to be held in September 2005 to, in particular, assess the implementation of the MDGs, many projects have been formulated in recent months to foster development. We must welcome the recent decision by the ministers of finance of the Group of Eight (G-8), taken on 11 June 2005 at London, to cancel 100 per cent of the debt of 18 development countries. We also welcome other measures, including that of the European Commission to increase official development assistance to reach the 0.7 per cent target of gross national product within a very clear time frame; those in the context of the Doha round seeking to put in place more equitable trade measures; and all others aiming at deploying new and innovative sources of financing, such as the establishment of an International Finance Facility.

The debate that will follow will no doubt also enable many delegations to explain in greater detail the measures on which their respective Governments are now working, in particular in the lead-up to the G-8 summit to be held at Gleneagles, Scotland, from 6 to 8 July, to work out the scope and details of implementation.

I also wish to welcome the historic decision to establish a development fund taken -- on the initiative of Qatar -- by heads of State or Government of the countries of the South at the Second South Summit, held from 14 to 16 June in Doha.

In that context, it is essential to strengthen the coherence of the international financial, trade and monetary systems to establish an international climate that enables developing countries to carry out reforms to mobilize domestic resources. On the eve of December's World Trade Organization ministerial meeting in the context of the Doha round, the international community must mobilize to conclude a general agreement that truly contributes to the establishment of a multilateral trading system that is more open and equitable, better regulated, non-discriminatory and more favourable to development.

I would like to conclude by reiterating the appeal made by heads of State and Government at Monterrey calling for "a follow-up international conference to review the implementation of the Monterrey Consensus" and stating that "The modalities of that conference shall be decided upon not later than 2005" (A/CONF.198/11, resolution 1, annex, para. 73). I would therefore urge all members to heed that call and to include in the decisions to be taken this year the holding of a follow-up conference on financing for development to be held in 2007, five years after Monterrey.

I now call on Secretary-General Kofi Annan.

The Secretary-General

It is a pleasure to welcome all participants to the United Nations. I think we can all sense that this is a period of extraordinary promise, a moment when this body's decisions can make history. Let me be more precise: What can help make poverty history?

Many years of hard work have brought us to the threshold of a breakthrough in our pursuit of development and human dignity. Not so very long ago, many feared that development in the world's poorest countries was in danger of being given up as a lost cause. Some held that extreme poverty was a sad but inescapable aspect of the human condition. Quite rightly, that view is now seen as intellectually indefensible and morally untenable. Today it is widely recognized not only that poverty must be defeated, but that it can be.

There is real hope today because, first and foremost, many developing countries have succeeded in lifting millions of people out of impoverishment and despair. There is real momentum, because the international community has banded together in a sustained, unprecedented effort. United Nations conferences and summits have mapped out a vision. The Millennium Development Goals have become a rallying point of unparalleled scope, the globally accepted benchmarks by which our policies should be fashioned and by which our progress should be judged. The Monterrey Consensus has brought rich and poor countries together in partnership. The Millennium Project has given us a plan of action. All along, the tenacious advocacy of leaders, citizens, civil society groups and the occasional rock star or movie star has boosted public awareness, creating a popular groundswell of pressure on the representatives in this Hall and on their colleagues in Government. The question now, just 12 days before the Group of Eight (G-8) summit and less than 12 weeks before the 2005 world summit here at United Nations Headquarters, is whether we can close the deal.

As we heard earlier from the President of the General Assembly, the decision taken this month by the finance ministers of the G-8 is very encouraging. For too long, some of the world's poorest countries have faced an unpalatable choice between serving their peoples and servicing their debt. Now it is the debt that will be written off instead. It is also an enormous boost to know that the European Union has agreed upon a clear timetable for reaching the 0.7 per cent target for official development assistance by 2015. That will offer a chance finally to overcome the resource shortfalls that have kept so many millions of people mired in squalor.

Such steps make up for lost ground. They need to be accompanied by similarly dramatic action on the unfinished parts of the agenda. Rich and poor alike must do their part. Responsibility flows both ways. Developing countries have pledged to uphold the rule of law, fight corruption and build up their institutions. They have promised to invest in their human capital, mobilize their domestic resources and open their doors more readily to business activity. Many are doing just that.

On the other side, the developed countries have promised to support them. They should, for example, launch an international finance facility and double aid to Africa. Beyond aid and debt, they should also strive to reduce the damaging effects of volatile private capital flows and to increase the voice and participation of developing countries in global economic decision-making. Developed countries must also take the lead in creating a development-friendly trading system. If developing countries could compete on fair terms and did not have to contend with unfair subsidies and unduly high tariffs, they would reap dividends far beyond what aid and other measures could generate.

Until very recently, the poor and vulnerable had to settle for too many small steps -- mere blips on the vast radar screen of need -- when what they had hoped for were bold and meaningful advances. Today, we can and must do better. Despite new commitments on debt and official development assistance, the overall deal is not done. The new money for both is not yet there. The commitment is not yet universal -- either among donor or developing countries or on so central an issue as trade.

Never, perhaps, have a few weeks mattered so much for the world's poor as the next few. The decisions you make and the action you take in 2006 will set the course for development over the coming decade. Mutual interest should guide you. All countries would benefit from efforts to build stable societies, strong markets and a rule-based global economy.

Mutual accountability should dispel doubts. A cardinal principle of the Monterrey Consensus -- indeed, the very essence of the global partnership for development -- is that States are accountable not only to their own peoples but to each other.

So let us work together for a successful summit. Let us grasp this opportunity to advance the cause of development, as well as the security and human rights agendas that are so closely bound up with it. Let us show that needless, senseless human misery shall have no place in our world.

The President

I thank the Secretary-General for his statement.

I give the floor to the President of the Economic and Social Council, Mr. Munir Akram.

Mr. Akram (Pakistan)

It is a pleasure for me, representing the Economic and Social Council, to participate in the second high-level dialogue on financing for development. The dialogue is taking place at an important juncture in world history and for the developing countries.

The Monterrey Consensus outlined the comprehensive national and international policy actions required to achieve the internationally agreed development goals. It recognized that enhanced financial flows are critical to the realization of those development goals. And it acknowledged that dramatic shortfalls exist in the required resources.

At Monterrey, the world's leaders agreed to address the challenges faced in generating the required financing for development. Unfortunately, like other such global agreements, the Monterrey consensus suffers from a serious implementation deficit.

The Consensus assigned the Economic and Social Council important responsibilities for follow-up on the implementation of commitments. The Council is to promote greater coherence, coordination and cooperation between the United Nations and other international financial and trade institutions in the implementation of the agreed development goals. The special high-level meeting of the Economic and Social Council is designed to perform that function.

The special high-level meeting of the Economic and Social Council with the Bretton Woods institutions, the World Trade Organization and United Nations Conference on Trade and Development was held on April 18 this year and focused on three sub-themes: first, policies and strategies; secondly, trade, investment and private flows; and thirdly, official development assistance, innovative sources of financing and debt.

The Economic and Social Council's discussions -- held in a special plenary and during six round tables -- benefited from the meetings of the International Monetary and Financial Committee and the Development Committee that were held the previous day, as well as from the Secretary-General's report entitled "In larger freedom".

In terms of policies and strategies, it was recognized that nationally formulated and owned development strategies, adequate policy space, greater overall coherence and coordination, including donor-recipient coordination, employment creation and greater support for private-sector-led growth are all critical elements in attaining the agreed development goals.

Good governance, particularly enhancing transparency and combating corruption, was also recognized as central to the effective implementation of national strategies. At the international level, the need to strengthen the voice and participation of developing countries in international financial institutions was viewed as an important factor for good global governance.

There was universal recognition of the key and substantial contribution that trade can make in securing enhanced resource flows for development. Consequently, there was unanimity in calling for an early, successful and genuinely development-oriented outcome of the Doha Round of multilateral trade negotiations.

On investment and private capital flows, several participants underscored the need for generating favourable business conditions for both domestic and foreign investors, including a stable macroeconomic environment, an effective regulatory framework, transparency and an enabling infrastructure.

Concern was expressed in the Economic and Social Council about the stability of international private capital flows. It was noted that, besides sound national macroeconomic policies, other initiatives were needed to mitigate the effect of the volatility of capital flows. These could include the use of innovative financial instruments, as well as improved multilateral official liquidity and the adoption of effective prudential regulations. There was also general agreement on the need to reduce the cost of the transmission of worker remittances.

With regard to official development assistance (ODA), the discussions recalled the 0.7 per cent ODA target, confirmed at Monterrey, and emphasized the need for a rapid increase in aid flows to reach the amount necessary to meet the internationally agreed development goals. It was also noted that aid effectiveness should be improved through greater coordination and harmonization.

The Economic and Social Council discussion generally supported recent initiatives on innovative sources of financing. Those sources should be additional to the existing official development assistance (ODA) commitments and targets. On the implementation of innovative financing, there was a general preference for an incremental approach.

The discussions noted the urgent need to solve the huge debt burden of the Heavily Indebted Poor Countries (HIPC) Debt Initiative countries, consideration of the situation of debt-distressed non-HIPC low-income countries, and the need for a comprehensive framework for solving debt problems of middle-income countries. Views on defining debt sustainability, however, remained divergent.

I am confident that the deliberations of the Economic and Social Council will contribute significantly to the Assembly's deliberations and to the outcome of the September high-level event.

The Economic and Social Council, for its part, will hold a high-level segment on the world economy and internationally agreed development goals on 29 and 30 June and 1 July.

The draft outcome document that you have circulated and the Secretary-General's report, entitled "In larger freedom", have presented several proposals to strengthen the Economic and Social Council. On 10 June 2005, in my capacity as the President of the Economic and Social Council, I forwarded to you, Sir, a non-paper outlining several steps to strengthen the role and contribution of the Economic and Social Council to development. That non-paper was developed on the basis of informal consultations and with the collaboration of several delegations, including those of Belgium, Germany and Sweden and the 15-member Group of Friends of United Nations reform. The informal consultations held by the Economic and Social Council on 5 May also contributed to the evolution of the non-paper. It is my view that the measures set out in the non-paper will enable the Economic and Social Council to achieve the following: first, it will promote global dialogue on social and economic policy trends; secondly, the Council will serve as a development cooperation forum; thirdly, it will enhance the linkage between peace and development; and lastly, it will strengthen operational coordination within the United Nations system. I trust the non-paper will receive full consideration in this meeting and in the outcome document for September.

In conclusion, Mr. President, let me wish your deliberations all success in -- as the Secretary-General has put it -- transforming poverty into history and making equality a reality.

The President

I should now like to turn to some organizational matters pertaining to the conduct of the meeting.

First of all, we turn to the length of statements. As indicated in the note of the Secretary-General (A/59/850), I urge speakers to limit their statements to five minutes, on the understanding that this will not preclude the distribution of more extensive texts.

In view of the large number of delegations already inscribed on the list of speakers, and there are 79 so far, I would appeal to speakers to cooperate in this respect.

To assist speakers in managing their time, a system of lights has been installed at the speaker's rostrum which functions as follows: a green light will be activated at the start of the speaker's statement; an orange light will be activated 30 seconds before the end of the 5 minutes; a red light will be activated when the 5-minute limit has elapsed.

I would like to inform members of the General Assembly that, in accordance with resolution 59/293 of 27 May 2005, the General Assembly will also hear statements by representatives of the following United Nations system organizations: the World Bank, the International Monetary Fund, the World Trade Organization, the United Nations Conference on Trade and Development and the United Nations Development Programme.

I now give the floor to His Excellency Mr. Delano Franklyn, Minister of State, Ministry of Foreign Affairs of Jamaica, who will speak on behalf of the Group of 77 and China.

Mr. Franklyn (Jamaica)

I have the honour of speaking on behalf of the Group of 77 and China. All reports, reviews, analyses and consultations on development since the Monterrey conference lead to one major overall conclusion -- namely, the international community has fallen far short of mobilizing the level of resources required to finance the level of development envisaged in the development-oriented summits and conferences, including the Millennium Summit. An unprecedented, multidimensional, coherent and focused thrust will be needed from the High-level Plenary Meeting to generate the level and quality of resources in the established time frame, even to meet the Millennium Development Goals.

We stress that the development challenge, as addressed at Monterrey, is comprehensive. It includes, but also extends well beyond, the achievement of the very important Millennium Development Goals. Deficit have emerged in all six areas of action identified in the Monterrey Consensus. Urgent action is therefore required in each area. The Secretary-General has concluded that, at mid-decade, most developing countries and countries with economies in transition have made significant progress in improving resource mobilization. Many of those resources, however, have not been available for investment to meet development objectives for a variety of reasons.

The G-77 and China, as a result of reasons already identified, propose, first of all, that emphasis be given to providing developing countries with the required policy space to be innovative, depending on national circumstances. Secondly, the international community should devise strategies to reverse, in the shortest possible time, the negative flow of resources from developing countries; and, thirdly, coordinated effort must be directed to enhancing the capacity of the local business sector to compete globally.

The Monterrey Consensus identified trade as an engine for development and, in many cases, the single most important external source of development financing. It welcomed the November 2001 decision of the World Trade Organization (WTO) to place the needs and interests of developing countries at the heart of its work programme and of leaders committed to the implementation of the WTO decisions.

There has been no progress on the substantive issues of interest to developing countries in the Doha Work Programme. The heads of State and Government of the G-77 and China, at their second South Summit in Qatar in June of this year, stressed the need for the WTO to become a fair, equitable and rules-based trading system that is inclusive and gives priority to the development dimension. Of course, a number of other factors were also stressed.

As we have heard on a number of occasions, the Monterrey Consensus urged developed countries to make concrete efforts towards the target of allocating 0.7 per cent of gross national product (GNP) to official development assistance (ODA) to all developing countries and 0.15 to 0.20 per cent to least developed countries. The declining trend in ODA has been halted. ODA from developed countries increased from a record low of 0.21 per cent of GNP in 2002 to 0.25 per cent in 2003 and 2004.

However, an increase of 0.04 per cent in ODA after the second year can hardly be defined as substantial. No new developed country has achieved the target since Monterrey. ODA currently includes debt relief, emergency aid and technical assistance, which have been increasing, and many developing countries have had to divert significant resources to disaster emergency and recovery activities and to the fight against international terrorism since 2002.

There is a sense of increasing recognition of the need to address the resources issue and of a momentum in that regard. For example, the Secretary-General made several proposals in his report, including the establishment of fixed timetables to achieve the 0.7 per cent target, and the European Union recently agreed on timetables for all its older members to reach the target by 2015, with an intermediate target for 2010. The G-77 and China welcomes those initiatives. Here, I must make special mention of the initiative of the Emir of Qatar to launch a fund for development and humanitarian assistance. That fund was launched at the Second Summit, held recently in Doha.

The Monterrey Consensus recognized the urgent need to enhance coherent governance and consistency of the international monetary, financial and trading systems. Despite that urgent recognition and increasing meetings involving the United Nations, the Bretton Woods institutions, the WTO and the United Nations Conference on Trade and Development, the systems remain incoherent. Actions in one area still often negate or constrain actions in the others.

The Summit of the G-77 and China called for: greater coordination among international institutions and agencies dealing with development, finance, monetary and trade issues to promote coherence in policies with a view to making them more development-oriented; action to deal with issues of global systemic imbalance in areas such as trade, finance, money and technology; and reform of the global financial architecture, including enhancing the voice and participation of developing countries in the decision-making processes of the international financial institutions, which affect their development options.

I know that instructions were given to limit statements to five minutes. However, because I am speaking on behalf of the Group of 77 and China, I am sure that members understand why I might have gone over my five minutes.

The President

I now call on His Excellency Mr. Luis Ernesto Derbez, Minister for Foreign Affairs of Mexico.

Mr. Derbez (Mexico)

By defending the principles and norms of international law and by adopting an approach based on shared responsibility, Mexico has always supported the development and strengthening of the international system. We Mexicans regard the multilateral institutions, particularly the United Nations system, as the ideal forum for defending Mexico's interests abroad and for contributing to international development, peace and security.

Today, the community of nations faces a formidable challenge: to carry out the reforms necessary to ensure that the United Nations can effectively address the challenges set for us by the twenty-first century. We cannot pass up this unique opportunity to create a new international architecture that will promote a balance among the principal organs of the United Nations and improve the Organization's working methods and operations. If we do not take action to that end, we will condemn the United Nations to irrelevance.

Mexico has striven to promote comprehensive reform. By participating actively in the Group of Friends for United Nations Reform and in the "uniting for consensus" movement, we seek to achieve broad reform that will strengthen the United Nations, enhance its legitimacy, make it more representative and improve its capacity to prevent and respond to situations that could threaten world peace and security.

Mexico supports the vision expressed by Secretary-General Kofi Annan in his report presented last March (A/59/2005) in which he emphasized the importance of ensuring that the debate on Security Council reform is carried out in such a way so as not to impede progress in equally important organs, particularly the Economic and Social Council.

United Nations reform must be the fruit of a consensus-building effort among all Member countries. For the good of the Organization, we cannot permit the imposition of partial solutions that will only leave us with an institution that is fragmented and unable to cope with the demands that it was originally created to address. Only such an approach will enable us to prevent and promptly address conflicts that arise from a lack of access to development.

To make that vision a reality, we must promote, through the Economic and Social Council, the creation of a system of shared responsibility and dialogue with regional development organizations, as well as with the Bretton Woods institutions. We must link the Millennium Development Goals with the development financing mechanisms that emerged from the Monterrey Summit. Only in that way can we guarantee the benefits of globalization for our peoples.

Linking the Millennium Development Goals with the international financing mechanisms will make it possible to enhance coherence between national development strategies and the global economic process. Such linkage is essential, given that the opening up of trade and the liberalization of financial markets, together with the adjustments that developing countries have made in their national economies, have not in themselves been sufficient to attain the Millennium Development Goals.

Mexico attaches the highest priority to honouring its international obligations and has spoken out energetically in favour of meeting various historical demands of developing countries, particularly with regard to participation in the decision-making of the international financial institutions and the building of a system of trade that is fairer and more conducive to development.

The second High-level Dialogue, which brings us here today, provides us with the opportunity to carefully review compliance with the Millennium Development Goals and to identify areas in which the international community needs to focus its efforts to achieve the results planned for 2015. I am convinced that this exercise will enable us to determine where the commitments of the Monterrey Consensus stand and what concrete actions we must take to achieve the Millennium Development Goals.

I take this opportunity to highlight the progress made at the global level in the area of official development assistance (ODA), particularly by developed countries that have met their commitment to allocate 0.7 per cent of their gross domestic product to ODA and by those that have established timetables for doing so. In addition, the Government of Mexico welcomes the agreements reached to relieve the burden of multilateral debt of the heavily indebted poor countries. Those agreements must be accompanied by the measures necessary to ensure the integrity of the international financial system.

The progress I have cited has resulted from the significant efforts of the international community as a whole -- the donor countries, the developing countries and the poorest countries -- to make this year a watershed in the area of international development policy.

We need a strong United Nations to make progress towards the Millennium Development Goals. That must be our commitment. We cannot pass up this historic opportunity to strengthen and reinvigorate the United Nations. To do that would be not only irresponsible but, frankly, dangerous. To give up on the possibility of an effective United Nations would be to give up on strengthening our ability to respond to the security and development dilemmas that we currently face. This Dialogue reminds us that that is not an option.

This is a crucial year for the future of the United Nations. As Member States, we must define a new international architecture capable of responding through dialogue and coordination to our peoples' demands for development and security.

The President

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