For information only - not an official document.
18 December 2000
Transcript of Press Conference by Secretary-General Kofi Annan
On Financing for Development at Headquarters


NEW YORK, 15 December (UN Headquarters) -- The Secretary-General: Good morning, ladies and gentlemen. I am very pleased to introduce to you this morning Dr. Ernesto Zedillo who, as you know, has just completed his mandate as President of Mexico. He deserves great credit for his role in bringing that country to full multiparty democracy, and I'm sure he also deserves a period of rest after such a strenuous task. But I am delighted to say that he has decided, instead, to put himself at the service of the international community, and particularly to the developing world.

Development, as you know, has been the twin objective of the United Nations, alongside international peace and security, ever since its foundation. The need for broader-based development, which can rescue over a billion human beings from abject poverty, was one of the main themes of the Millennium Report, and also the Millennium Declaration adopted at the Summit last September.

In that Declaration, the heads of State and government adopted many good resolutions, and set many targets, for combating poverty, ignorance and disease. But none of those targets can be achieved unless there is real development throughout the world, especially in the poorest countries. And development cannot happen without resources, especially financial resources.

Yet official development assistance has been in steady decline for well over a decade, and many poor countries are so indebted that the net transfer of resources, in the form of interest and repayment, leads into a net outflow into industrialized countries instead of the other way around.

It is vital that we turn this situation around, and ensure that developing countries receive the financial resources they need. But how? What policies must they adopt? What kind of help from the industrialized world will be most useful to them? Have we got the international institutions we need? And if so, how can we ensure they play their proper role?

Above all, how can we motivate the people and governments of industrialized countries, so that they are willing to devote more resources to debt relief and development assistance, and to open their markets more fully to developing-country products?

The more successful developing countries are the ones that have been able to mobilize private investment, both from abroad and among their own people. Flows of capital to the developing world as a whole are far larger than official assistance, but they are not evenly or equally distributed. Many of the poorest countries, especially in Africa, are almost completely left out.

We must establish clearly what is needed to enable all developing countries to mobilize private capital in this way. All these questions will be discussed at the global meeting on Financing for Development, which the United Nations will hold, in cooperation with the world's leading finance, trade and development institutions, in just over a year's time. We cannot afford to let that meeting be just another occasion where people meet and talk and adopt a communiqué, and leave the real world almost unchanged.

In order to avoid that, I have formed a high-level panel, on which a number of eminent people, all of them people with a record of outstanding achievement in the world of government and finance, have agreed to serve. I believe you already have the list -- a press release has been issued. And I have asked these people to come back to me by May next year and recommend concrete and achievable steps that could be taken to augment the flow of resources to the developing world.

I am convinced that this panel can make a really significant contribution to our thinking. I believe its recommendations will help build up political momentum, so that the meeting on Financing for Development in 2002 can mark a real turning point in the fortunes of poor countries, and poor people, all over the world.

I am especially pleased and proud that President Zedillo has agreed to chair this panel. I know he will give it exactly the kind of leadership it needs. And I will now let him speak for himself.

Ernesto, you have the floor.

President Zedillo: I just want to say that I have accepted quite willingly this responsibility offered to me by the Secretary-General.

The issue of financing for development is a fundamental one. As the Secretary-General mentioned, over the years, a number of proposals have been put forward to foster development in developing countries. However, little attention has been paid to the issue of financing, that is to say, how to pay for those proposals. Now, the Secretary-General -- counting on the very strong background of the same work that has been done here at the United Nations and at other organizations -- is asking a group of people to put together a number of proposals, which he has emphasized should be realistic, applicable, fresh and make an additional contribution to this topic.

The Secretary-General has asked a number of people to work on this subject to produce a specific report for him. That report will be among the inputs leading to the meeting he has just mentioned, which should take place in early 2002. I believe we will be ready with that report, Mr. Secretary-General. We will be keeping a very open dialogue with a number of institutions and organizations. We hope, in the end, to produce a good report for you. I thank you for this opportunity to serve the United Nations.

Question: I have a question for the Secretary-General.

This is all really about fighting poverty, as you mentioned. A favourite phrase mentioned at the Millennium Summit was "Think globally, act locally". What impact do you expect this panel will have for the various parts of the world, especially for the peoples of the Balkans, for instance?

The Secretary-General: I hope that the ideas the panel will put forward, and the suggestions it will make as to how we finance development, will be a set of proposals that could be applicable and helpful to countries in need, whether countries in transition or developing countries.

I think the phrase you mentioned implies that in today's world we cannot think in purely local terms, and that what happens internationally has an impact locally; and what happens locally has an impact internationally. Therefore, leaders -- whether private sector or political, or in other sectors -- cannot afford to think in purely local terms. I think that by approaching development financing the way we are, and by seeking fresh ideas about how we generate resources for development in the countries in need, and help them to create an enabling environment that will also release the energies of their peoples, will be very good.

Here we are talking, obviously, of financing for development. I think that, as we look at this problem, we have to understand that not all resources need necessarily come from abroad, and that there are local investors. The kind of climate, institutions and regulatory systems needed to attract international investors is the same one needed to attract local investors or to get local financiers to take risks. So I hope that the ideas the panel will come up with will help countries in the Balkans, countries in transition and developing countries -- or, at least, give them some ideas on how to proceed.

Question: With regard to development aid from developed countries, I think you have already sent a letter to the Japanese Government showing your concern with its fiscal policy to cut development aid by 3 per cent. Will you share with us your concerns about that?

The Secretary-General: I think that it is quite clear from my earlier remarks that I have been rather concerned, and I am concerned, about the tendency to see diminishing development assistance. A couple of years ago, quite a few countries did cut drastically their assistance to developing countries, and also to United Nations development agencies. We are just beginning to convince those Governments to bring the levels back up and to restore assistance to where it was two or three years ago.

So when I heard that the Japanese Government wanted to reduce its development assistance by 3 per cent, I was really concerned that, just as I thought we were beginning to reverse a trend, here came a suggestion from Japan that it would go the other way. That is why I wrote to the Prime Minister. I hope my intervention and the letter will be considered seriously. Hopefully, we will not have to live with those cuts.

Question: I would like to know, after looking at the people that integrated this panel, how and why specifically Mr. Zedillo has been appointed to head this panel? Where is this panel going to be based? Is it going to based here in New York, or is it going to be travelling around?

The Secretary-General: The first part of your question is the easy part. I selected Dr. Ernesto Zedillo because of the experience he has had in the financial area, because of the political experience he brings, because of his strong intellectual abilities in the area of economics and finance. So he comes with an incredible combination of academic and intellectual background, experience in the field and political understanding of how these things happen. He is someone who has done it. I think you cannot have a stronger reason than that.

As to where the panel is going to be based, there is no base. They will stay where they are. They will meet several times during the period between now and May, and they will stay in touch with each other via the Internet and other electronic means. They will have a small secretariat working with the Chairman and the Commission, but if they have to meet, they will probably meet here or in Geneva two or three times.

President Zedillo: My base is in Mexico City. I want to enjoy my house.

Question: President Zedillo, is this what you see yourself doing from here until you have to deliver the report, or are you going to be doing something else on top of that?

President Zedillo: I think I will have to be doing other things for a living. This is a very honorary appointment, which I will enjoy a lot. I will try to deliver, as the Secretary-General expects from me, but certainly I will not be charging him for this commitment.

The Secretary-General: And I thank you for that.

Question: To what extent do you envisage this panel looking at the basic development paradigm, as it were? Or, to put it in simpler terms, to what effect will the money be used? When you say "financing for development" and ask investors to put money in, will the panel also look at how the money is used, rather than just institutions and the concrete proposals?

The Secretary-General: I will say a word, and then ask Dr. Zedillo to say a word.

I think, first of all, the panel has only a few months to make its recommendations. It is not a panel that is going to stick around and have a long time to go around checking how governments and institutions use their money.

Question: I did not mean how they use the money. In other words, the paradigm that now exists of what constitutes development...

The Secretary-General: I see what you mean. I think they will touch on that issue and perhaps, in some instances, even indicate good examples of how other countries and other regions have done it and the sort of environmental requirement you need to be able to absorb these monies constructively and effectively. I think, if I hear you right, you are talking of a growth that leads to development and that touches the people and their lives, not just in statistical terms.

President Zedillo: I have nothing to add.

Question: Is the panel going to deal with corruption in recipient countries, which puts off some investment, and also analyse why the 20/20 has not come forth, not only from the developing world -- that has been spelled out quite nicely by Japan, the United States and so forth -- but from the developed world also?

President Zedillo: The Secretary-General has given us a list of topics that he expects the panel should be considering. However, this is an independent Panel that will produce a final report. It will not be until the panel gets together that we take a decision on what issues we will be reporting to the Secretary-General. In principle, I believe that people want to discuss any issue that the Secretary-General considers relevant, and, certainly, we will be looking from a general perspective at the issue of the application of resources -- how effective resources are in fostering development.

Certainly, when discussing that, I would assume that we will be touching upon the specific issue you mentioned, but I think that right now it is too early to say specifically what the panel will be doing or not doing.

Question: This is a two-part question, the first one in English to Mr. Annan, and then, if I can ask a question in Spanish, to Mr. Zedillo. Mr. Secretary-General, you talked about this conference in the year 2002. Where is this conference going to take place? Do you know yet?

The Secretary-General: The venue has not been settled yet, but I expect it to be settled as early as during the first or second quarter of next year.

Question (in Spanish): To change the subject, have you ever asked for help from the Nicaraguan Government to offer protection and asylum for Mr. Oscar Spinosa?

President Zedillo: Excuse me, but that question has nothing to do with this press conference. We discuss Mexican subjects in Mexico.

Question: Is the concern of the panel mainly to do with mobilizing private capital? What effect do you think the change of Administration in Washington will now have on the work of the Panel?

President Zedillo: We will not be limited to the private resources issue. The Secretary-General has asked us to deal with a rather comprehensive and, I would say, extremely ambitious agenda, but I repeat that it will not be until the panel gets together and starts working that we will decide on which specific areas we will be directing our recommendations.

It is too early to anticipate the content of that report. I have to speak with the members of the panel. I know a few of them, but not all of them, and we will have to do some work before we start providing the kind of information you are now requesting.

Question: Do you think a change of Administration in Washington will make your job easier or harder?

President Zedillo: I don't know. The Secretary-General: But on your first question, I think Mr. Zedillo is quite right. Obviously, we are going to look at a whole range of issues, not just private direct investment. We will look at official development assistance, and I have also asked that we look at other creative sources and other sources of funding for development. So it is a wide range. Obviously, as he said, when the panel meets they will decide how to proceed.

Question: I do not know all the topics you have asked the panel to deal with, but one very important topic that I wonder whether you would urge them to deal with is governmental actions that disrupt the development plans of others. For example, a recent report of the United Nations spoke of the devastation of the Palestinian economy because of Israeli practices. That has been a complaint across the board in many different places, but, in this particular case, do you want action on governmental measures that disrupt development, such as the ones by the Israeli authorities against the Palestinian economy?

The Secretary-General: I think you have asked a very specific question. It is a question I myself have had a chance to discuss with the Security Council and also with the Israeli and Palestinian authorities. But I do not expect the work of the panel to get into that specificity. But the issue you raised is a concern, and we are in touch, as you know, with the Israeli authorities to try and improve the situation. But it will not be on the agenda of the panel.

Question: I would like to ask Mr. Zedillo if he would answer in Spanish. (Then in Spanish): Could you explain to us exactly what tasks you will be assigning to the panel? My second question is, how do you respond to the critics back home, who say that this is a job arranged by President Fox?

President Zedillo (in Spanish): Within a range of activities that he would like to carry out in preparation for a meeting whose specifics are yet to be defined by the Organization, the Secretary-General has asked a group of people to work on a report on development financing that will support his efforts to prepare for that meeting. Through efforts over the years, the Secretary-General has prepared a list of topics that he feels should be considered by the panel, with a twofold purpose: first, to propose what he has referred to as innovative solutions to these problems; and to support him in his efforts to mobilize political will so that these topics will gain a higher profile in world public opinion and in the financial and governmental spheres. That is the task that the Secretary-General has entrusted to us. We, of course, will do our best to fulfil that responsibility.

As to the second question, President Fox did not help me secure this job. I hope that if he ever does help me find a job, it will be a paid job, because this one is voluntary.

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