A 20-year wait becomes reality


UNITED NATIONS (IPS)-- The Group of 77 played a crucial role in finalising the draft outcome document for the UN conference on Financing for Development (FfD) in Monterrey on March 18-21, according to Ambassador Oscar R. de Rojas, Executive Coordinator of the FfD Secretariat in the UN's Department of Economic and Social Affairs (DESA).

The former Deputy Permanent Representative of Venezuela said the 133-member Group ensured that key issues constituted the core of the Monterrey consensus.

"Let us not forget that developing countries had been waiting for this conference for over 20 years," he said.

Many see in FfD a modern-day incarnation of the famous "global negotiations" efforts that were frustrated in the early 1980s when there were calls for a "New International Economic Order" (NIEO), he added.

Excerpts from the interview:

1) How would you characterize the significance of the Monterrey conference in the context of an impending global economic recession in a post-September 11 climate?

The meeting of Heads of State and Government and the participation of the Ministers of Finance should serve to regain confidence in the international economy and the international system that was badly shaken as a result of 9/11/2001 events. Greater confidence should lead to higher investments and stronger recovery as well as concrete measures in international trade and better prices for primary commodities.

A higher sense of urgency can be expected to increase cooperation for development. Despair, illiteracy and poverty can be root causes of conflict and threats to peace, and there is a growing realization that investing in development and building more just economic and social structures is in the interest of all. Furthermore, systemic issues addressed by FfD such as calling for greater participation and transparency in financial institutions and the international banking system, tax cooperation, the fight against corruption and the flight of funds and money laundering are ways to help turn off the illicit flow of finances to terrorist networks.

2) To what extent would the 133 developing nations of the Group of 77 benefit from the Monterrey conference?

The International Conference on Financing for Development is taking place at the initiative of the G77, and developing countries have a large stake in making Monterrey a success. One of the greatest successes has already been achieved, namely placing on the international agenda the six key issues related to financing for development and mobilizing the leaders of both developed and developing countries to build on the Monterrey Consensus.

If the current Consensus (to replace the so-called “Washington Consensus”) is supported by the South and the North at Monterrey and the recommendations, policy guidelines and proposals are implemented, the international and national environment for development should change in a major way, facilitating the acceleration of economic growth and development. Let us not forget that developing countries had been waiting for this Conference for over twenty years. Many see in FfD a modern-day incarnation of the famous “global negotiations” efforts that were frustrated in the early 1980s when there were calls for a “New International Economic Order”.

3) What key role, in your judgment, did the Group of 77 play in the final draft outcome document adopted at the last PrepCom meeting?

The group ensured that key issues - particularly those related to increased participation in international economic decision-making, reform of the international financial architecture, innovative modalities to deal with external debt problems, increased technical assistance for strengthening the financial sector, the support to regional focus and concrete follow-up mechanisms - constitute the core of the consensus.

4) What are the key elements of the outcome document? What are its successes and failures? And are you expecting any revisions in Monterrey?

Apart from those mentioned in 3) above, other key elements are the support to increased concessionality of development financing, ownership as a key element in development cooperation, keeping the SDR issue on the agenda, the strengthening of regional development banks and a more active role for them in mitigating financial cycles and dealing with financial crises, commitment to a United Nations Convention against corruption including repatriation of illicitly obtained funds to the country of origin, strengthening the UN as a forum for economic development and financial issues, a stronger approach to the follow-up, increased consensus on the key elements of the enabling domestic and international environments to foster development while recognizing explicitly that the appropriate role of Government will vary from country to country.

(On weaknesses) It would have been better to have had a more precise time frame for action on agreed proposals and recommendations. The focus on development and its implications of the forthcoming trade negotiations could have been more specific. Key actors should have supported in a decisive way increases in ODA. There could have been more discussion of international institutional gaps and specific related questions.

(On revisions at Monterrey) It is unlikely that there will be any revisions to the Consensus. But there might be important new initiatives at Monterrey that can be pursued without altering the document. There will be efforts made to build on the Consensus and take the agenda forward. There may also be other declarations and commitments made at Monterrey, but this remains to be seen.

5) And if there are no revisions, would the Monterrey conference be only a formal meeting for world leaders to approve a plan of action already endorsed by the UN's 189 member states?

Apart from possible new initiatives, a strong reaffirmation of the consensus by Heads of State and Ministers of Finance is key to actual implementation. Besides, the Roundtables will serve as the forum for furthering the consensus and devise more concrete actions for implementation. The Roundtables will once again reflect the inclusive, multi-stakeholder participation that has been a unique feature of the FfD process, and once again members of civil society, NGOs and private sector business entities, will have the opportunity to add substantively to the discussions on financing for development.

6) A key element in financing for development is an increase in development aid. But the United States has shot down a proposal by Secretary-General Kofi Annan for doubling ODA to about $100 billion a year. Were you disappointed that this proposal never found a place in the outcome document?

Yes, like most people. But things can still happen and the key issue that remains is how donors approach their commitments in terms of volume and of rapid implementation.

7) There are two other proposals-- the cancellation of Third World debts and the reform of the World Bank, IMF and WTO -- that never made it to the outcome document. Both proposals were, at one time or another, advocated by developing nations and NGOs. Was this omission due to pressure from Western nations?

Many countries believed that the time was not yet ripe to push the institutional reform agenda forward at the cost of achieving substantial advances in other sectors. But the pressure for reform has been felt by some institutions, and certainly in recent months the Bretton Woods Institutions been more open to positions advocated by the developing countries and recognized the need for change. The fact that countries have agreed to stay engaged in furthering the FfD process will keep healthy pressure on everyone and eventually we should move towards greater participation in decision-making processes and increased transparency. There was an understanding that the whole question of aid and debt have to be re-examined. Significant steps have also been taken in the advance toward greater coherence in global monetary, finance and trade systems. Developing countries along with members of civil society have argued the present approach to solving debt problems is insufficient and needs to be considerably improved. But I don’t remember anyone calling for an all-out, across the board cancellation of all the foreign debt.

8) Although all "stakeholders" were expected to actively participate in the PrepCom process for FfD, most NGOs were disappointed that they were asked to be only "observers" not "participants." Do you think they should have played a more important role at the meeting?

That proposition is not correct. Members of civil society, including NGOs and business sector representatives participated very actively in an unprecedented way in the plenary sessions of the PrepCom as part of this unique multi-stakeholder process. All the stakeholders played a very important role, and their inputs were taken heed of in the final Monterrey Consensus document. It had been decided earlier by the General Assembly, which included both developed and developing countries, that in keeping the “intergovernmental character” of the negotiations, the actual negotiating sessions would be closed. Despite objections from some countries, the terms were amended to allow members of civil society and other stakeholders such as the Bretton Woods Institutions, to remain at the sessions and lobby while governments negotiated. Inputs from civil society gave direction to many key issues such as the concept of equitable globalization and private-public partnerships. Civil Society will continue to play an active role in Monterrey and participate in Roundtable discussions.

9) The outcome document has been criticised by because it has no time-bound targets. How would you react to this criticism?

The Monterrey Consensus lays the foundations for the edifice of financing for development and for our future work. It has broken new ground in finding agreement to sustain efforts to reform international financial architecture, strengthen the underpinnings of international financial stability, increase transparency in international financial activities and increase participation of developing countries and economies in transition in international economic decision-making and norm-setting. A crucial point in achieving this coherence is strengthening the UN as a forum for international economic and financial issues. FfD seeks new partnerships and good governance to mobilize domestic resources and encourage private investment while addressing systemic issues of world economic governance in order to ensure consistency between the international monetary, financial and trade systems.

Time-bound targets will possibly emerge as the financing for development process gets a boost from the congregation of world leaders, finance ministers, heads of intergovernmental organizations, leading lights of civil society and innovative business entrepreneurs who are meeting in Monterrey with the purpose of achieving results.

10) What's next after Monterrey? Will there be a mechanism to follow-up on the decisions in Monterrey?

Perhaps the most significant outcome of the consensus is that governments have agreed to “stay engaged” after Monterrey. FfD is a process that will build upon and evolve beyond the 2002 consensus. Already there are calls to take the process forward. As the Norwegian Development Cooperation Minister stated recently at a meeting in Washington, "We must go beyond Monterrey at Monterrey."

The most important intergovernmental follow-up mechanism for FfD will be a strengthened and more focused use of the spring meeting of ECOSOC with the Bretton Woods Institutions and WTO. This will in turn feed into the semi-annual dialogue on “strengthening cooperation through partnership” held in the UN General Assembly.

The Monterrey Consensus clearly also calls for support to the FfD process at the national, regional and international levels in recognition of the link between financing of development and attaining internationally agreed development goals and objectives, in measuring development progress and in helping to guide development priorities. Governments agreed to support the United Nations in the implementation of a global information campaign on the internationally agreed development goals and objectives and encouraged the active involvement of all relevant stakeholders, including civil society organizations and the private sector. And, to underpin these efforts, The Secretary-General of the United Nations has been requested to provide sustained follow up within the UN system to the agreements and commitments reached at Monterrey. The Consensus goes on to say that this support will build on the innovative and participatory modalities and related coordination arrangements utilized in the preparations of the Conference. More precise mechanisms and arrangements for follow up will surely emerge and evolve after Monterrey.