General Assembly Session 62 meeting 32

The President

I now give the floor to His Excellency Mr. Bert Koenders, Minister of Development Cooperation of the Netherlands.

Mr. Koenders (Netherlands)

Today we are discussing the urgent question of if and how we will be able to finance the Millennium Development Goals (MDGs) so that they can be reached by 2015. Many countries are lagging behind in reaching many of the MDGs, so we need to step up our efforts and keep our promises. Many Group of Seven countries and new emerging donors have not come up with additional financing. Official development assistance (ODA) in the past year decreased; the trade negotiations that promised to finalize a so-called development round are stalled; many countries still have to wait for the Heavily Indebted Poor Countries Debt Initiative (HIPC) process of debt reduction to be dealt with; and many developing countries have not yet stepped up their efforts to invest in human development.

This morning, the Secretary-General signalled a mixed picture of progress and setbacks in his report on the follow-up to the International Conference on Financing for Development. Serious work and responsibilities lie ahead for all of us.

Today we are witnessing growing inequality between and within States. The world economy is growing, which is a crucially positive development, but at the same time we are faced with three fundamental challenges -- first, poverty and the unequal distribution of wealth; secondly, poverty and climate change; and thirdly, poverty and the unequal distribution of security. These three challenges are interlinked in a complex manner. Our efforts should focus on solving all three fundamental challenges by acting urgently.

This must be done by, first, by stepping up our efforts. In the countries where the MDGs are off track, measures have to be taken in the domestic arena to ensure progress in fields such as progressive taxation, democratic accountability and transparency. In support of these national efforts, international efforts, both through transfer of funds and through meaningful political dialogue, can and should also play a role of greater importance. The Netherlands has been a consistent 0.8 per cent donor for decades, and we have added in the new cabinet period 700 million euros extra to start addressing the environmental adaptation agenda for least developed countries. In spite of all the promises made in the past few years, including those made in this arena, worldwide development aid even dropped by five per cent last year.

As the international community, let us implement the Monterrey agreement. We fall way short of our targets. If we are to attain the Millennium Development Goals, we need to reverse this trend. The European Union (EU) decision to raise its ODA level in accordance with specific targets and a timetable for the coming years can now be realized. We expect more G-7 and non-traditional donor countries to join us in delivering the agreed 0.7 per cent United Nations target.

Secondly, the enhancement of the quality and effectiveness of our ODA spending is at least as important as the levels of spending. Over the years, the international aid architecture has become increasingly complex. Funding decisions and budget allocations are increasingly linked to performance and accompanied by demands for more transparency and better accountability. Also, we need to limit conditionality to key areas only. This is positive and very much needed, but major challenges remain, as also signalled by the Secretary-General this morning -- effective ownership, lower transaction costs and predictability of aid, less bureaucracy and fewer endless rules, regulations and reports. I really call on United Nations agencies to reverse this negative trend of more and more paperwork. What really counts are results on the ground, in the country. The monitoring of results and follow-up of mutual commitments at country level are essential, but this requires, first and foremost, strong leadership and the involvement of parliaments and civil society -- that is, the people on the ground. We have to make sure that in Accra, next September, the Paris Declaration can be taken a step further -- towards double accountability, and this will require political leadership.

But even more stable and predictable funding is not enough. I will increase the amount of multi-year core funding for United Nations organizations that perform well and, in the near future, for "One United Nations" country programmes. I call on all donor countries to do the same. In this light, I look forward to contributing to the elaboration of principles of good multilateral donorship.

The third challenge concerns trade. Trade and phased integration into the regional and world economies are essential preconditions for economic development and poverty reduction. The poorest countries need to be supported with their integration into the world trade system, but we must allow them to protect their own markets for some time against the sometimes unfair competition that affects vulnerable sectors, the development of rural areas and food security.

Since Monterrey, more challenges have been facing us. Global security issues and climate change place us before new hurdles on our way to MDG realization. We have to re-think our financing mechanisms to stay ahead of these developments. I would, in conclusion, like to share my ideas on these issues with you as food for thought for our discussion.

First, when it comes to climate change, we have to bear in mind that the poorest countries are the main victims of the more extreme weather conditions, droughts and floods. A temperature rise of only two degrees will destroy the coffee sector that is so crucial to Uganda, for instance, a country I visited only a few months ago. I consider this issue to be of great importance to the Monterrey review. How can we improve our responses to climate change? What does it mean for our levels and ways of ODA spending and other financial mechanisms? At the G-8 meeting in Heiligendamm in Germany, some steps were taken in the right direction in terms of seriously considering the goal of 50 per cent fewer emissions by 2050. I hope that at the United Nations climate summit at Bali later this year, we will see this constructive attitude turned into substantive action. But it is also is a matter of restructuring our financial flows, taking new innovative steps and forming public-private partnerships. We cannot do it in the same ways that we have done it up until now. I hope we will be able and willing to answer some of the questions ahead of us in time for our meeting one year from now in Doha, Qatar, on the bases of the polluter pays principle, shared responsibility and additionality.

When it comes to fragile States, we should recognize that the majority of the world's billion people living at the bottom in sheer misery are in these States. Effective assistance to these States is still lacking. There is not enough money, nor is there effective cooperation in multi-donor trust funds or between development, diplomacy and defence. This is unacceptable. I just came back from the Sudan, and I see how much work we still have to do to improve these multi-donor trust funds.

In Doha next year, we will be obliged to show the world that we have not taken our previous promises for granted. New developments and challenges have to be taken into account. Emerging issues, such as innovative finance, new donors, harmonization, South-South cooperation, to mention just a few, need to be carefully studied and selected to be dealt with substantively in Doha.

Sometimes, we are puzzled by the complexity of the matters we discuss. However, complexity must never be an excuse for passivity. The Netherlands, therefore, remains committed to actively participate in and contribute to the financing for development process. We call on everyone to step up their efforts. The world is more and more characterized by political, economic and cultural fault lines. This is no longer acceptable.

The President

I now call on His Excellency Mr. Kwadwo Baah-Wiredu, Minister of Finance and Economic Planning of Ghana.

Mr. Baah-Wiredu (Ghana)

It is a privilege for me and my delegation to participate in this important High-level Dialogue on Financing for Development. The theme could not have come at a better time, particularly as we prepare for the Doha conference in 2008.

Ghana aligns itself with the statement delivered by the representative of Pakistan on behalf of the Group of 77 and China.

In the year 2001, world leaders gathered in Monterrey and resolved to address the challenges of financing for development around the world, particularly in developing countries. The goal of the Monterrey Consensus was to eradicate poverty, achieve sustained economic growth and promote sustainable development.

The Consensus is based on the contemporary view that international cooperation for development should be viewed as a partnership between developed and developing countries. Developing countries must accept primary responsibility for their development, including strengthening governance, combating corruption and putting policies and investments in place to drive economic growth and employment, thereby maximizing domestic resources available to fund national development strategies. Developed countries, for their part, are to provide the support that developing countries need, in the form of increased development assistance, development-oriented trade systems, wider and deeper debt relief and increased private financing.

A considerable number of developing countries are making tremendous strides towards achieving the internationally agreed development goals, including the Millennium Development Goals (MDGs). I want to assure the Assembly that Ghana will achieve Goal 1 by the end of 2008. Our efforts have also received encouraging support from development partners, particularly in the area of debt relief, which has seen improvements, especially since 2005.

Despite those achievements, challenges remain. The world is still confronted by acute and increasing social and economic inequalities. Some poor countries, particularly in sub-Saharan Africa, are not likely to achieve the MDGs by 2015. Official development assistance has also declined, despite pledges to the contrary, and developments at the Doha negotiations so far provide little comfort for developing countries.

Permit me now to share with representatives the outcome of the Second African Ministerial Conference on Financing for Development, held in Accra.

In May 2007, the Government of Ghana hosted the Second African Ministerial Conference on Financing for Development. The theme of the Accra conference was "Infrastructure for Growth -- the Energy Challenge". The main focus of the Conference was the energy sector -- particularly its financing and its contribution to the growth agenda for meeting the MDGs by 2015.

The outcome of the discussions comprised 15 concrete action points for Governments, international partners and the private sector, aimed at addressing the dual challenge of increasing access to energy for the poor and ensuring the reliable functioning of existing energy infrastructure. Those points include the following. Governments must strengthen planning frameworks to take into account and accelerate the pace of current regional initiatives such as the Inga Dam project in the Democratic Republic of the Congo, regional power pools and gas pipeline projects. International partners must deliver on past promises and pledges for development assistance, and then scale up aid to the energy sector and develop new funding instruments and mechanisms for transboundary energy projects. The private sector must, through financial institutions, develop new financing instruments such as infrastructure bonds. It is important that the action points be implemented by all stakeholders in order to advance the development of the continent.

One sure way in which African countries can finance our development is through fair international trade. It is therefore imperative that all well-meaning countries make the adjustments necessary to make it possible for the current trade talks to be concluded.

Our countries have realized that most of the aid that we receive -- be it in the form of loans or grants -- is supposed to be tax-exempt. Those exemptions have assumed proportions that have made them unsustainable. In fact, in Ghana they amounted to 3 per cent of our gross domestic product in 2006. There is a need for development partners to review the tax exemption policies incorporated into their aid programmes.

We need to take a long-term view of financing programmes, as Ghana has done with regard to its 2057 budget, which takes into account what could happen over a period of 20 to 50 years.

The increasing significance of emerging donors, such as China and India, in recipient countries means that they are increasingly involved in the development dialogue and in decision-making. Their further involvement would enhance the quality of that dialogue and would contribute to aid harmonization.

We are interested in the carbon credit mechanisms, which would help us to know what is really going on. We are also very happy to point out the need to front-load aid to enable recipient countries to embark on their projects and programmes in a timely manner. We are aiming to achieve the One Laptop Per Child project, designed to bridge the gap between developed countries and developing countries. Ghana is seeking to assemble approximately 5 million personal computers in order to make sure that its schoolchildren have access to them. I hope that we will be supported in that effort.

The President

I now call on His Excellency The Honourable Samuel Mumbengegwi, Minister of Finance of Zimbabwe.

Mr. Mumbengegwi (Zimbabwe)

It is a pleasure for me to be here today to share ideas on the important subject of financing for development. My delegation aligns itself with the statement made by the representative of Pakistan on behalf of the Group of 77 and China.

The Monterrey Consensus of 2002 launched a new partnership for financing for development, especially the internationally agreed goals, including the Millennium Development Goals (MDGs). The discourse we are having today provides an opportunity for us to assess progress made, recognize obstacles and constraints and identify new challenges, opportunities and emerging issues of concern, particularly to developing countries.

The primary responsibility for national development is vested in national Governments. Zimbabwe, like other developing countries, is making every effort to achieve the MDGs by 2015 and to invest in the crucial areas of agriculture, infrastructure development, health and education. The MDGs have provided us with a framework for putting poverty reduction and human well-being at the centre of our development efforts, and we have made great strides in education and health.

However, rising poverty levels remain a challenge for Zimbabwe, undermining the achievement of the MDGs. Recurrent droughts, the illegal sanctions imposed on our country by some powerful countries and the HIV/AIDS pandemic continue to slow down economic growth in the country. Despite those challenges, the Government has continued to implement turnaround strategies aimed at steering the economy towards sustained economic growth and development.

It is now widely accepted that, without a complementary international effort to finance development in developing countries, the objective of achieving the internationally agreed development goals, including the MDGs, will remain elusive. It was that realization that led Governments and multilateral trade and financial institutions, under the aegis of the United Nations, to commit themselves at Monterrey in 2002 to provide more resources to finance development. The 2005 World Summit reaffirmed the need to take concrete action to accelerate development. The immediate objective of the commitments made there was to reduce poverty, particularly extreme poverty.

Monterrey was able to make the correct diagnosis and identify the constraints that developing countries face in their efforts to eradicate poverty through economic and social development. Five years after Monterrey, the remedies that the international community agreed to undertake have not been fully implemented, thereby preventing the achievement of targets that were set.

It is now apparent that the current official development assistance (ODA) levels fall short of requirements for meeting the targets associated with the Millennium Development Goals (MDGs) and internationally agreed development goals. In this regard, developed countries need to fulfil their promises to meet the target of providing 0.7 per cent of their gross national income as official development assistance to developing countries in the short term. Such assistance needs to be adequate, predictable and continuous in order to have a meaningful impact. In the long term, new and additional resources are required to enable developing countries to continue to fight poverty beyond the MDG target date of 2015.

While we commend those countries that have met and even surpassed the target of 0.7 per cent of their gross national income, we urge those that have not yet done so to continue scaling up aid in order to reach the required level. On the other hand, it is important to analyze the volume of aid and its effectiveness on the ground. Aid earmarked for specific programmes, most of which are not developmental in nature, very often fails to have the desired impact.

Concerted efforts must also be directed towards addressing the problem of the unsustainable external debt faced by a number of developing countries. While we recognize the various initiatives that have been undertaken to reduce the debt burden of a number of developing countries, including the Multilateral Debt Relief Initiative, we are, however, of the view that the process is slow and does not cover all countries. We are also of the view that the real solution to the developing countries debt problem would be full debt cancellation. Additionally, the inclusion of debt relief in aid statistics can be very misleading. The simple fact is that debt relief does not make new resources available for development.

Since development is a process and not an event, we believe that more attention should be paid to addressing the disparities in the global trade regime so as to remove trade barriers. If we act now to remove trade barriers, agricultural subsidies and restrictive rules on intellectual property rights, we will be laying a solid foundation for sustainable development that can lead to the eradication of poverty, particularly the extreme poverty that engulfs millions of people.

The reform of international financial institutions to make them more democratic by allowing developing countries a greater voice and participation in decision-making processes is an issue that remains unresolved. The level of participation of developing countries in decision-making within these institutions does not reflect the numerical strength and influence of developing countries in the global system. It is regrettable that the repeated calls to reform these institutions, including addressing the issue of distribution of voting rights at the International Monetary Fund (IMF), continues to fall on deaf ears.

Zimbabwe is of the view that all aid to developing countries should be unconditional and tailor-made to support the development priorities of the recipient country. In addition, Zimbabwe rejects the use of coercive economic measures as a tool to ensure political compliance with the whims of those countries that perceive themselves to be powerful. Such malicious actions undermine development cooperation and should not be entertained by the international community as it works to increase development and reverse poverty.

Zimbabwe would like to express its confidence in the ability of the United Nations system to coordinate and lead the development efforts of the international community, including through its agencies, funds and programmes. However, these operational activities for development of the United Nations system must earn the confidence of all by maintaining their neutrality and supporting the development policies, priorities, and strategies of Member States. They must also resist the temptation to further donors' ulterior motives in developing countries.

Let me conclude by reiterating that together we have agreed that mobilizing financial resources for development is central to a successful global partnership for development. This High-level Dialogue would therefore be of great value, if it were to infuse urgency to the fulfilment of commitments on financing for development made at Monterrey and the 2005 World Summit, including the establishment of effective mechanisms to measure aid inflows. We must therefore muster the necessary political will to tackle head on the obstacles encountered since Monterrey, with a view to completely removing them, in order to guarantee the success of the follow-up conference to be held in Doha, Qatar next year.

The President

I now give the floor to His Excellency, Mr. Igor Luksi, Minister of Finance of Montenegro.

Mr. Luksi (Montenegro)

It is my particular pleasure to address this High-level Dialogue on Financing for Development at this important moment for the follow-up to the implementation of the Monterrey Consensus and ahead of the Doha conference in 2008. At the outset, I would like to point out that Montenegro has fully aligned itself with the statement made by the representative of Portugal on behalf of the European Union presidency. Therefore, I will take the opportunity to make a statement in my national capacity by emphasizing a few issues that are of particular importance for Montenegro.

The overall advancement toward the achievement of the internationally agreed Millennium Development Goals in Montenegro has been very positive as it evolves alongside the European Union integration processes. Montenegro signed the Stabilization and Association Agreement on 15 October 2007, thus opening a new chapter not only with regard to the political, but also the economic, market, and fiscal areas of development. This framework will enable us to promote sustainable development and carry out poverty reduction strategies.

In recent years, Montenegro has achieved macroeconomic stability, and the prospect of growth remains strong. Real gross national income growth for the past three years is expected to be an average of seven per cent. Inflation is low at between two and three per cent. There has been a budgetary surplus in the past two years of about four per cent, and the level of public debt is moderate at 35 per cent. We have championed the foreign direct investment (FDI) inflows in our region in the past two years. FDI is an important vehicle for the transfer of knowledge, skills and technology, and for the reduction of poverty, as noted in the Secretary-General's report. Montenegro has recognized that the challenge for developing countries is to increase trade and attract FDI in a way that will maximize its contribution to long-term development and has carried out a comprehensive set of activities to ensure the sustainability of economic growth.

As stated in the World Summit Outcome document, our development is our responsibility. Creating a friendly business environment for domestic and international investments is of utmost importance. A stable macroeconomic environment, market-friendly frameworks, availability of human resources, and a measure of predictability are recognized as crucial to the effective implementation of my country's development strategies as well as for fostering public-private partnerships, improved transparency, and accountability. Montenegro recognizes that it has the primary responsibility to develop adequate administrative capacities, to design and implement development strategies and to set priorities and timelines for their implementation.

Being a small Mediterranean country in the last stage of transition, we understand that infrastructural bottlenecks pose the greatest challenge to stimulating growth and development. Investors know how to allocate resources, but it is up to the Government to commit energy to motivate their decisions on the basis of a solid infrastructure.

I would like to take this opportunity to stress the particular relevance of international financial institutions and their technical support. As a small middle-income country, Montenegro maintains good relations with our international financial institution partners. We therefore welcome the latest decision of the World Bank to cut interest rates. At the same time, we call for the allocation of the net income of international financial institutions be directed towards more technical support for countries, in order to transfer know-how, and address social inequality and global climate change and to help them to prepare infrastructure projects.

To that end, Montenegro commends activities that foster international financial and technical cooperation. We also welcome ongoing efforts at the global level to reach the target of 0.7 per cent of gross national income for official development assistance (ODA) by 2015 and to improve the quality, predictability and effectiveness of ODA.

I believe deeply that this important momentum towards global development will not be lost and that several different initiatives will foster the implementation of the Millennium Development Goals and other internationally agreed development goals. Montenegro also supports an outcome document in the style of a ministerial declaration that would focus on the further implementation of the Monterrey Consensus.

The President

I now give the floor to His Excellency Mr. Tijjani Yahaya Kaura, Minister of State for Foreign Affairs of Nigeria.

Mr. Kaura (Nigeria)

Let me start, Sir, by joining other speakers in commending your laudable initiative to convene this very important High-level Dialogue on Financing for Development.

While my delegation associates itself fully with the statement made this morning by the Minister of State for Economic Affairs of Pakistan on behalf of the Group of 77 and China, I wish to reflect on some issues from Nigeria's national perspective.

The most pressing preoccupation of the world community today is how to assist developing countries to achieve internationally agreed development goals, including the Millennium Development Goals (MDGs), in a sustainable and environmentally friendly manner. This High-level Dialogue on Financing for Development is therefore inevitably anchored on that premise.

We thank the Secretary-General for his comprehensive report (A/62/217) and the useful recommendations contained therein. We are worried about the disturbing trend referred to in the report, namely, that in spite of the general improvement in the world economy there are widespread concerns that the fruits of development and growth are not fairly distributed and that, even more disturbing, there seems to be a growing trend towards a higher concentration of income and wealth in a few countries.

This is a wake-up call for the international community to assist developing countries to take appropriate measures to diversify their economies and mobilize domestic, external and other forms of financing to ensure sustainable growth and development. However, the efforts of developing countries will yield the desired results only if they are backed by a massive infusion of foreign direct investment, fair and equitable trade, access to the markets of industrialized countries, decreased subsidies for agriculture by industrialized countries, debt relief and sustainability and improved official development assistance (ODA) -- all of which must be tailored to the development aspirations of recipient countries.

In spite of the daunting challenges facing developing countries, Nigeria's economic reforms, as encapsulated in both its first and second national economic empowerment and development strategies, have recorded modest progress in kick-starting the economy and addressing many of its structural defects. In that respect, our strong macroeconomic performance has continued to attract commendation from our development partners, with some analysts even projecting that if the trend continues Nigeria could join the 20 largest world economies by the year 2020. The Government is therefore determined to achieve that.

The statistics are quite encouraging. For instance, from 2002 to 2006 annual gross domestic product (GDP) grew at an average of 6 per cent, with inflation steadily declining to single-digit levels, and external reserves steadily increased to the current level of $47 billion. Furthermore, foreign direct investment flows into the country increased steadily, from about $1 billion in 1999 to about $4.5 billion in 2006.

Interestingly, however, that growth has been driven not just by the oil sector but also, to a lesser extent, by the non-oil sectors of agriculture, manufacturing, telecommunications, banking and finance and wholesale and retail trade. To further diversify the economy, the Government is planning to embark on massive investment in petrochemical plants and the development of enterprise centres and industrial clusters around the country. Nigeria has also succeeded in drastically reducing its external debt, from about $35.9 billion in 2005 to about $3,348,000,000 early this year. In fact, the Government took a deliberate decision to dedicate all proceeds from the Paris Club debt deal to scale up pro-poor programmes and projects.

In spite of those appreciable strides, for Nigeria to consolidate and build a solid economic base it will have to confront and surmount its acute infrastructural deficiencies -- especially in the areas of power, water, railways and roads -- which are threatening our sustained drive towards economic growth and industrialization. The Government has therefore embarked upon extensive sectoral reforms of its infrastructure and the establishment of legal, regulatory and administrative frameworks conducive to foreign investment. We would welcome massive foreign investment to fund infrastructure development. It is estimated that Nigeria will require between $6 billion and $9 billion annually to fix the facilities it needs to maintain sustained economic growth.

In order to mobilize domestic resources for development, the Government has perfected an effective public-private partnership in line with the assertion contained in the report of the Secretary-General that a robust domestic private sector that is itself investing in its economy will provide a powerful signal to attract productive private investment inflows.

We also believe that for economic growth to be meaningful and sustainable, it has to improve the living conditions of the people.

The Monterrey Consensus emphasized the linkage between trade, development and finance. Most developing countries, including African countries, therefore, view greater access to the markets of developed countries and institutional capacity building to ensure that as the best way to ensure sustainable economic growth that is development-oriented rather than dependant upon aid.

Nevertheless, in order to better attune ODA to Nigeria's development strategies, the Government has developed an official development assistance policy to avoid a situation where a substantial part of a grant is used to pay experts from donor countries.

On the road to Doha, we view the World Trade Organization negotiating areas of agriculture, non-agricultural market access and services as very important. Hence, we are prepared to engage in the ongoing negotiations in a manner that will produce the greatest possible benefits for developing countries.

Finally, we note with deep concern that, while the developing countries are striving, against all odds, to implement their part of the commitments by devising national development strategies, improving governance and creating a macroeconomic climate conducive to growth, trade and investment, our development partners have yet to fulfil all their commitments related to development assistance and financing, trade, technology transfer and other areas of cooperation.

My delegation therefore believes that the time is ripe for the international community to take concerted and time-bound action to ensure the implementation of all the commitments made by our development partners. We hope that the current institutional reforms in the Bretton Woods institutions will go far enough to ensure greater voting rights and representation for developing countries, particularly African countries, in the World Bank and the International Monetary Fund.

The President

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