General Assembly Session 62 meeting 33

The President

I give the floor to His Excellency Mr. James Mulungushi, Permanent Secretary of the Ministry of Finance and National Planning of Zambia.

Mr. Mulungushi (Zambia)

Zambia would like to join previous speakers in complimenting you, Sir, for convening this High-level Dialogue as we prepare for the review of the implementation of the Monterey Consensus. We also wish to commend the Secretary-General for his report contained in document A/62/217.

Zambia fully aligns itself with the statements made by the representatives of Pakistan on behalf of the Group of 77 and China, and of Bangladesh on behalf of the least developed countries.

We may recall that the Monterrey Consensus on financing for development offered a lot of hope to the developing world for its integration into the global economy. Indeed, some developing countries have exhibited positive economic growth, though the majority are far from being integrated and will not achieve most of the internationally agreed development goals, including the Millennium Development Goals (MDGs).

Zambia, like many other developing countries, is committed to the implementation of the decisions agreed upon in the Monterrey Consensus and calls upon all the other parties to honour their pledges. In that regard, Zambia has made considerable progress in the implementation of the Monterrey Consensus agreed upon in 2002. Conditions for mobilizing both domestic and external financial resources have been achieved, as evidenced by the improved and sustained macroeconomic environment of the past five years. Real gross domestic product (GDP), which is a key stimulus for expanding fiscal space, has been growing at an average of over 5 per cent over the past five years. On the other hand, inflation has been declining, reaching single digits in 2006 for the first time in 30 years. Interest rates have also enabled increased private sector credit, which grew by 54.7 per cent in 2006. Banks have been diversifying their range of products and branches. Domestic revenues as a percentage of GDP have been stabilized at around 18 per cent. The foreign exchange rate of the kwacha against major currencies has also been stable. That macroeconomic stability has resulted in increased foreign direct investment in recent years, especially in the mining sector. In 2006, for example, foreign direct investment was around $400 million.

Furthermore, external sector performance has been good, as evidenced by a sustained increase in exports in the past five years and improvement in gross international reserves. Growth in non-traditional exports over the past five years has been over 25 per cent. Similarly, metal exports in the past five years have increased due to high copper prices on the international market. The external debt overhang has declined significantly and now stands at around $700 million, thereby providing the much-needed fiscal space for the implementation of development programmes. Zambia therefore appreciates the debt relief provided under the Heavily Indebted Poor Countries Debt Initiative and the Multilateral Debt Relief Initiative.

Within the harmonization strategy contained in its fifth national development plan, progress has been made in harmonizing donor practices so as to improve aid effectiveness in line with the Paris Declaration. The Joint Assistance Strategy for Zambia, which defines Zambia's development framework with cooperating partners, has been developed. In addition, a number of cooperating partners have signed a memorandum of understanding on poverty reduction budget support in an effort to reduce transaction costs and improve predictability of external resources.

In order to drive the development process, Zambia has prepared a fully-owned fifth national development plan for the period 2006-2010, the theme of which emphasizes infrastructure development, capacity-building, technological advancement and wealth creation. That also includes investment in health and education.

We are hopeful that, going ahead, the country is poised for further growth. That optimism is premised on continued strong improvements in macroeconomic performance and progress in public expenditure management, in line with the fifth national development plan. Specifically, the focus in the coming years will be on, first, the efficient use of the fiscal space that has been created as a result of debt relief and sustained GDP growth; secondly, improving domestic resource collection; and thirdly, deepening structural reforms, especially those that will increase domestic and foreign investment, facilitate trade and improve productivity. Some of the reforms that Zambia is implementing in that regard are the Public Expenditure Management and Accountability, the Private Sector Development Programme and the Millennium Challenge Account Threshold Programme.

Though Zambia is experiencing growth, there is a downside to this positive story. That is due to the fact that poverty levels remain high and were estimated at 68 per cent in 2004, down from 73 per cent in 1998. Sustained growth is still fragile, since the economy is largely dependent on the mining sector and rain-fed agriculture, coupled with inadequate economic infrastructure. In the social sectors of education and health, critical shortages of teachers, nurses and doctors have adversely affected service delivery. The impact of the HIV/AIDS pandemic also remains a challenge, adding further pressure on health care delivery.

Therefore Zambia like many other developing countries, needs a lot of assistance from the international community and calls for concerted efforts in order for our countries to be integrated into the global economy. The following areas, among others, should be addressed in order to overcome some of the challenges that we face in Zambia: the scaling-up of aid to Africa, in line with the agreed commitments, so that development programmes can be intensified; realigning development assistance with recipient countries' national development strategies; concluding the Doha Round of negotiations, which is expected to deal with the interests and needs of Africa; financing the infrastructure gap in Africa by, among other things, improving the structure of private-public partnerships, including by building capacity in the public sector to deal with such partnerships; increasing the voice and participation of developing countries in the international financial institutions and other institutions at the global level; and financing the negative impacts of climate change in least developed countries, which are highly vulnerable to those effects because of their dependence on rain-fed agriculture.

The President

I call on His Excellency Mr. Gyan Chandra Acharya, Foreign Secretary, Ministry of Foreign Affairs of Nepal.

Mr. Acharya (Nepal)

Let me begin by appreciating the comprehensive reports of the Secretary-General on the status of financing for development.

I wish to associate myself with the statement made by the representative of Pakistan on behalf of the Group of 77 and China.

Since the international community has expressed its firm commitment to achieving the Millennium Development Goals (MDGs), financing for development and attaining sustainable development, the development agenda has occupied centre stage at the United Nations. But there have been mixed results in development since those compacts were agreed. While some developing countries have made good progress, many, particularly least developing countries (LDCs), are lagging behind in their development. Their development is severely constrained by the lack of sustainable financing, both domestically and internationally.

With the Monterrey Consensus in 2002, the international community demonstrated its commitment to fulfilling the needs of the developing countries by investing in synergy and ensuring adequate and sustained financial resources for their development. We agree with the report of the Secretary-General that we have made only modest progress and that the implementation of those commitments and pledges is rather slow. We face the challenges of promoting rapid and sustainable growth in many countries. The benefits of development are yet to be distributed fairly.

The delegation of Nepal stresses that the Doha Conference should be utilized as an opportunity to learn from our experiences, take stock of the progress made, seek innovative sources of financing, and accelerate the implementation of commitments so as to ensure the achievement of the MDGs and other internationally agreed development goals.

The LDCs are still in the classical stage of underdevelopment, where they seriously lack capital formation and technological advancement. They find themselves in the vicious trap of a low level of equilibrium. That is further compounded by a low level of productivity and a paucity of physical and technological infrastructure. Together, a large majority of them continue to find themselves at the bottom of the development ladder, despite revolutionary changes in science and technology and the unprecedented level of globalization. The downside of globalization has been more prominent in those countries because of their high level of economic vulnerability. That, we believe, is a fundamental challenge to the global community. We must collectively deal with it in a spirit of partnership.

We are all aware that domestic efforts and domestic financing are crucial to the sustainable development of any country, but we strongly feel that a high and sustained level of external financing will be equally indispensable for getting swiftly out from under the crushing burden of poverty and underdevelopment. We have been made starkly aware by the current realities of the world; the continuation of such a situation is not sustainable and is a threat to international peace and security. We cannot indefinitely have islands of abundance and opulence in a sea of deprivation and marginalization.

Innovative ways and mechanisms must be explored and broadened to bolster development collaboration. My delegation stresses the need for an inclusive and equitable international economic and development framework that is responsive to the needs and concerns of the larger section of the international community.

As we are halfway towards achieving the MDGs, it has become clear that many targets will be difficult to meet, especially in the least developed countries. While securing the gains that we have made in some areas, we need coherent and focused attention on effectively mobilizing domestic and international resources for strengthening our capacity to achieve those goals, in which we lag behind.

It is a matter of concern that the unsustainable debt burden has had a negative impact on sustained growth in many poor countries. Finding a durable solution to debt problems and increasing additional resources for development should be the priorities of the international community. We are alarmed at the reduction in real terms of total development assistance, which was highlighted yesterday by the representatives of the World Bank, the International Monetary Fund and the United Nations Conference on Trade and Development, as well as by many delegations. When we talk about financing for development, we need to focus on scaling up development aid. Predictability and accessibility, moreover, are the keys to development.

We call for the full implementation of the Brussels Programme of Action for the LDCs. While we thank those development partners that have met the targets, we urge the developed countries to make real contributions by meeting the official development assistance target of 0.2 per cent of gross national income to the LDCs.

Similarly, we need a holistic approach to deal with the myriad problems faced by the LDCs. When we all agree that trade could be an engine of growth, we must ensure the development dimension of the Doha Round of talks by enhancing the level of effective market access for their products, the removal of barriers to trade, productive capacity-development through the effective operationalization of the Aid for Trade Initiative, and the augmentation and swift disbursement of resources for the Integrated Framework programme of support for the LDCs. Without concerted efforts to mitigate the impact of global liberalization, there is a clear danger of mass unemployment and de-industrialization, especially in the least developed countries.

We hardly need to emphasize the role of international financial institutions, particularly the Bretton Woods institutions, in financing for development. Those institutions should develop coherent, consistent and concerted efforts to support the implementation of national development strategies, with the meaningful participation of developing and the least developed countries in the decision-making process of development cooperation.

In conclusion, sustainable financing for development is attainable if we act in concert and with seriousness and sincerity. Today's world has an abundance of resources, technology and knowledge that can easily meet the development needs of all countries. It is only a matter of synchronizing the requirements and availability. There is a need for a comprehensive and consolidated approach. Investment in the development of the world's poorest countries should be viewed as an investment in the long-term peace and security of the entire world. We look forward to a meaningful outcome of the Doha Conference in achieving a comprehensive and concerted strategy, together with a mechanism to review the commitment to the financing for development.

The President

I give the floor to His Excellency Mr. Axel Poniatowski, Chairman of the National Assembly Foreign Affairs Committee of France.

Mr. Poniatowski (France)

It is a great honour for me to have the opportunity to convey the French authorities' conviction of the importance of the High-level Dialogue on Financing for Development.

As the representative of Portugal stressed, speaking on behalf of the European Union, the Monterrey Consensus is the foundation of the global partnership for development. Its principal characteristics are a balance between reciprocal commitments, openness to all parties, and a willingness to go beyond divisions through a shared political resolve.

For some years now, globalization has been of concern to the developed countries and has forced them to question themselves. It has also raised hundreds of millions of the poorest people out of poverty and promoted an exceptional period of growth. At the same time, it has revealed certain imbalances and dysfunction, of which the tensions on the financial markets are a recent illustration. Moreover, many developing countries, particularly in Africa, have the reasonable sense of being subjected to globalization and excluded from its benefits. We must therefore respond to their concerns.

The long road to the achievement of the Millennium Development Goals justifies an unprecedented effort to honour the commitments we made at the major international conferences. That is why France is ready to support ail initiatives that will enhance the mobilization of the international community on behalf of those goals.

It is also up to us to keep our word. The States members of the European Union have demonstrated their resolve to make every effort to devote 0.7 per cent of their gross national income by 2015 to official development assistance. President Nicolas Sarkozy has committed himself, and France will therefore keep its promises. As with the launching of the International Drug Purchase Facility here in 2006, France will continue to campaign for innovative financing for development, which is an indispensable complement to official assistance and reflects a new form of international solidarity epitomized by the contribution on airline tickets, which some 30 countries have pledged to introduce.

We must now keep to our commitments. Accordingly, we hope that the Doha Conference will encourage the emergence of a consensus and lead to new progress towards the mechanisms that the international community needs to meet the major challenges of health and climate.

Development is not just a matter of financing. It partakes of a shared responsibility requiring universal resolve in the context of a global partnership based on solidarity. Accordingly, it is up to the developing countries to act to end the infernal cycle of violence and ensure peace; to fight against the arbitrary, the frightening trafficking of drugs and corruption; and to create the conditions in which the energies of the private sector will be released. Likewise, the North-South partnership requires the link between migration and development to be taken into account based on an approach of common interests in which co-development has a place. Many countries have begun bold reforms in all those areas. I should like, on France's behalf, to pay tribute to them and to emphasize that their choices are all the more justified in that they respond first to the profound aspirations of their peoples.

Furthermore, the quality and effectiveness of assistance must become a reflex worthy of the goals of development. The Paris Declaration has no other objective than to translate into action the national appropriation of that idea, without which it is impossible to set the virtuous circle of development in motion. It is important that all donors, including the actors involved in South-South cooperation, apply its discipline.

It is naturally up to the United Nations to do its share of the effort. Almost a year ago, the High-level Panel on United Nations System-wide Coherence presented a series of proposals to enhance the effectiveness of the Organization's operational activities. Eight countries decided, in complete sovereignty, to experiment with the "united in action" concept, the main objective of which is to restore to the recipients of aid the power to decide their own priorities and to define with them the contribution expected from the United Nations system.

The success of that reform, which is in the interest of countries that depend on international aid for their development, is a test of the United Nations credibility. With the leadership of the Secretary-General and the mobilization of the entire system, it is our responsibility to provide intergovernmental support for common-sense measures.

The developing countries feel especially excluded from the benefits of globalization because their ability to make their voices heard in international bodies is inadequate. Accordingly, France resolutely supports indispensable reforms at the Bretton Woods institutions to make them more effective, better integrate them into collective international action, and have them take account of the legitimate aspirations of countries desiring to assume their responsibilities and duties. The new Director General of the International Monetary Fund will shortly be taking up the new duties that have been conferred on him in the wake of his message on reforms.

Lastly, France, through its President Nicolas Sarkozy, recently proposed that the G-8 continue its gradual transformation and ultimately evolve into a G13 so that closer cooperation can be implemented between the major emerging countries and the most industrialized. In that regard, the process of dialogue launched by Germany at Heiligendamm, which will deal specifically with development assistance, will be an important step.

It is clear that the task before us all is immense. The importance of what is at stake -- the promotion of a more equitable international order with greater solidarity -- justifies a high degree of ambition. The Monterrey Consensus remains as relevant as ever. It is up to us to see to it that the Doha Conference builds momentum for achieving the objectives that we collectively set and that are still current today.

The President

I give the floor to His Excellency The Honourable Mr. Loh Seng Kok, Member of the Parliament of Malaysia.

Mr. Loh (Malaysia)

I would first like to thank you, Sir, for convening this meeting. I would also like to thank the Permanent Representatives of Egypt and Norway for their excellent work as the co-facilitators of this process and the Secretary-General for his reports. I would also at this stage like to associate myself with the statement made by the representative of Pakistan on behalf of the G77 and China.

This Dialogue is a valuable opportunity for us not only to take stock of the present situation relating to financing for development, but also to find ways to generate momentum on the subject as we approach the Follow-up International Conference on Financing for Development to Review the Implementation of the Monterrey Consensus in Doha next year. In that connection, the theme for this High-level Dialogue -- "The Monterrey Consensus: status of implementation and tasks ahead" -- is both timely and appropriate.

The Secretary-General's report clearly indicates that progress is slow in most, if not all areas of the Monterrey Consensus. But progress is slowest in perhaps the most important area of them all, the provision of official development assistance (ODA).

The worth of each civilization is measured by how it treats its weakest and most vulnerable members. In the present context, we must be measured by our actions to help those in the poorest countries. In practical terms, this means the level of financial assistance given. Using this measure, it is clear that we have failed the test of civilized behaviour, particularly when we compare the resources that we possess with what is required to lift the poor out of their plight.

If we are indeed to be thankful for small mercies, we should be gratified that compared with 2002, when ODA levels stood at 0.2 per cent, the figure rose to 0.33 per cent in 2005, when it stood at $106.5 billion. Unfortunately, however, we now know that much of the increase is accounted for by debt relief and technical and emergency assistance. Compounding the issue is the fact that the figure dropped to 0.3 per cent last year.

There is a need to put the whole issue of the quantum of ODA in perspective. I would therefore like to juxtapose the $106.5 billion given as ODA in 2005 with other figures, by way of comparison. First of all, the Millennium Project estimates that at least $150 billion is required annually if the Millennium Development Goals (MDGs) are to be achieved. As matters stand, it is unlikely that the MDGs will be realized, due in part to lack of financing. Secondly, in 2005, the net outward financial flows from the developing to the developed world totalled $533 billion. Thirdly, total global military spending during that year stood at $1.118 trillion, or 2.5 per cent of global gross domestic product -- or $173 for each inhabitant of the world. The United States alone accounted for 48 per cent of military spending.

More important, discussions should not be confined to ODA alone. It is important to recall that the Monterrey Consensus embraced six areas in all, which included all of the issues related to financing and its relationship to development. Malaysia believes that the 2008 Review Conference must fundamentally assess and recommend measures related to the following issues. First of all, we need to understand the reasons for the non-implementation of the goals of the Monterrey Consensus, particularly in fulfilling ODA targets. We believe that the establishment of a monitoring mechanism to assess the level of ODA provided by the developed world will give impetus to these efforts. We note that this issue has been raised by the Group of 77 before and has failed to find consensus. However, given the urgency of the situation, we believe that further discussions on this are warranted. In essence, what is required is for these issues, which are currently being discussed in the Development Assistance Committee (DAC) of the Organization for Economic Cooperation and Development (OECD), to now also be taken up in the United Nations, perhaps by the Annual Ministerial Review or the Development Cooperation Forum of the Economic and Social Council.

Secondly, the increasingly complex interlinkage between finance and various new and emerging aspects of development must be examined. For example, if climate change is to be one of the main factors impacting development efforts in the future, it is essential that the Review Conference devote its attention to some of the key issues of this subject. One could usefully discuss international assistance to address not only adaptation issues, but also climate-related reconstruction and rehabilitation efforts.

Finally, in terms of new and innovative sources of financing for development, there is a need to evaluate various initiatives that have been launched during the past few years, and to use them as a basis for newer ones.

Having said this, it is essential to note, that given the wealth it possesses, the burden of responsibility for strengthening international efforts at financing for development must fall on the developed world. It must not be passed on to the so-called emerging donor nations -- which is itself a vague and ambiguous term. In this connection, we believe that to the extent that the term is used, it should be confined to the non-DAC members of the OECD only.

That being said, Malaysia has not shied -- and will not shy -- away from our responsibilities to assist other developing countries. Within the context of South-South cooperation, our Malaysian Technical Cooperation Programme is a vehicle for sharing our development experience, especially that gathered in specific areas in which we have strengths and experience. To date, 137 countries are beneficiaries of the Programme, compared to 46 in 1991. This demonstrates increased demand from Programme countries as well as Malaysia's greater willingness to assist.