Press Releases

    29 June 2005

    World Community Must Honour -- Even Go Beyond -- Commitments on Trade, Debt, Finance to Achieve Anti-Poverty Goals, General Assembly Told

    Progress Implementing 2002 Monterrey Agreement Assessed by more than 80 Speakers, Six Round-Tables Discussions in Two-Day High-Level Dialogue

    NEW YORK, 28 June (UN Headquarters) -- The international community must honour, and even go beyond, its commitments on trade and debt relief, and increase official development assistance (ODA) if the Millennium Development Goals were to be achieved, General Assembly President Jean Ping (Gabon) said this afternoon, as that body concluded its High-level Dialogue on Financing for Development.

    Summarizing the statements of delegates during the two-day meeting, Mr. Ping stressed the importance of successfully completing the World Trade Organization’s Doha round of trade negotiations, noting the importance of trade for growth, development and the fight against poverty.  As for ODA, the recent example set by the European Union to lay down a timetable for reaching the target of 0.7 per cent of gross domestic product (GDP) should encourage those countries that had not yet done so.

    Meeting to assess progress in implementing a landmark agreement reached at a 2002 development summit in Monterrey, Mexico, the High-level Dialogue took place as the Assembly negotiates the outcome document for the 2005 World Summit in September, and in the immediate run-up to the Group of 8 (G-8) meeting, where development finance heads the agenda.

    It brought together ministers of finance, foreign affairs and development cooperation, as well as leaders of the United Nations, the World Bank, International Monetary Fund (IMF) and the World Trade Organization (WTO).

    Participants had also highlighted the huge challenges Africa faced, Mr. Ping stated, emphasizing the key role that the New Partnership for Africa’s Development (NEPAD), as well as other regional organizations, should play in development.  Noting that significant progress had been made on debt relief, particularly the recent G-8 proposal to eliminate the debt of heavily indebted poor countries, they had emphasized that that measure should be extended to other nations, including some middle-income countries.

    Adding that the Monterrey principles required greater cooperation to better promote and finance development, he said those principles called for greater coherence among States in trade, aid policies and financial decisions.  To that end, participants had highlighted the need for developing country participation in international decision-making, and the need to reform the United Nations, as well as the working methods of the Economic and Social Council.

    Addressing some of those issues in today’s plenary meeting, the representative of Pakistan noted that current ODA targets, as well as proposed debt relief, seemed inadequate in achieving the Millennium and other agreed development Goals.  The September Summit should redefine “debt sustainability” as the level of debt consistent with achieving national development goals, and consider significant debt cancellation for all developing nations, including heavily indebted middle-income countries.

    Moreover, foreign direct investment (FDI) should flow to a wider range of developing countries, he added, noting that it facilitated technology transfer, created jobs, boosted productivity, enhanced competitiveness, accelerated economic growth and eliminated poverty.  Unfortunately, such flows were a small fraction of global investment flows, and were concentrated in only a few emerging markets.  The September Summit should endorse national and international measures to generate domestic, as well as FDI, in low-income countries.

    Echoing that concern, Djibouti’s representative observed that FDI had remained geographically concentrated, with certain regions suffering steady declines and others showing signs of weakness in competing for newer and higher quality investments.  Africa was likely to show a modest increase in FDI flows, but such investments remained largely concentrated subregionally and sectorally.  Least developed countries had fallen further behind in real growth in GDP, sub-Saharan Africa was off track in meeting the Millennium Goals, and the number of people living in absolute poverty in Africa had grown by about 40 per cent in the last decade.

    Turkey’s delegate stressed the joint responsibility of both developed and developing countries in mobilizing international resources for sustainable development.  Developed countries should design a pro-development international financial system to ensure a global flow of FDI, and developing countries should implement the principles of good governance and the rule of law, and create a strong legal basis for market-friendly institutions to attract that investment.  Unfortunately, neither side had yet completely fulfilled those conditions.

    Highlighting the need for increased trade to boost development in least developed countries, Bangladesh’s delegate noted that 50 of them were caught in a trap of underdevelopment, poverty and structural weaknesses, continuing to be marginalized and facing a variety of barriers in their major trade markets.  He urged the international community to provide immediate duty-free and quota-free market access for all exports of least developed countries, and to direct 0.20 per cent of GDP towards such nations, as committed in the Monterrey Consensus.

    Parallel to this morning’s plenary meeting, six round tables were held under the following topics:

    -- Round table 1:  Mobilizing domestic financial resources for development;

    -- Round table 2:  Mobilizing international resources for development:  foreign direct investment and other private flows;

    -- Round table 3:  International trade as an engine for development;

    -- Round table 4:  Increasing international financial and technical cooperation for development;

    -- Round table 5:  External debt;

    -- Round table 6:  Addressing systemic issues:  enhancing the coherence and consistency of the international monetary, financial and trading systems in support of development.

    In addition to this afternoon’s plenary, delegates also attended an informal interactive dialogue on financing for development.

    Also speaking today were high-level officials from Spain, Bulgaria, Nicaragua, Serbia and Montenegro, Croatia, Ghana, Paraguay, Lao People’s Democratic Republic (on behalf of landlocked developing countries), Chile, China, Brazil, Russian Federation, United Arab Emirates, Morocco, Republic of Korea, Syria, El Salvador, Romania, Kazakhstan, Thailand, Switzerland, Canada, Zambia, Algeria, Ethiopia, Uganda, Venezuela, Fiji, Netherlands, and the Observer from Palestine.

    Statements were also made by representatives of the European Community, the Inter-Parliamentary Union, the International Federation of the Red Cross and Red Crescent Societies, the Commonwealth Secretariat, the International Union for the Conservation of Nature and Natural Resources, the Asian Development Bank, and the International Organization for Migration.


    The General Assembly met today to continue its two-day High-Level Dialogue on Financing for Development, assessing the progress made in implementing the Monterrey Consensus, adopted at the 2002 International Conference on Financing for Development, held in Monterrey, Mexico.  In addition to today’s plenary meeting, the Dialogue will also feature six high-level round tables and an informal interactive dialogue.  (For background on the meeting, see Press Release GA/10362 issued on 24 June.)


    LEIRE PAJÍN IRAOLA, Secretary of State for International Cooperation of Spain, said that her country was firmly committed to doubling its official development assistance (ODA) in the next four years, with the objective of achieving the target of 0.7 per cent in 2012.  It would reinforce its commitment to the least developed countries and to sub-Saharan countries, where it would target at least 20 per cent of its ODA.  It would also increase the current flow of ODA to Latin America and North Africa, with a particular emphasis on middle-/lower-income countries.

    It was necessary to continue fighting poverty, which was defined as a lack of opportunities, capacities and options in order to maintain a decent standard of life, she said.  There was no doubt that those capacities and opportunities were largely determined in great part by the disposable income level, as that determined access to necessary goods and services.  High vulnerability, lack of empowerment or representation of women was another indispensable dimension when fighting poverty.  Another dimension of strategic importance when fighting poverty was reducing inequalities among and within countries.

    She confirmed her Government’s commitment with the poor in developing countries.  The Guiding Plan of Spanish Cooperation (2005-2008) envisaged that at least 20 per cent of ODA would be targeted to basic social sectors.  Along with that, a stronger commitment on behalf of the Organisation for Economic Cooperation and Development (OECD) countries was necessary.  That commitment must be visualized in an international commercial policy that would be geared towards the needs of developing countries, with decisive measures for the problem of debt, as well as to ensure environmental sustainability.

    LYUBOMIR DATZOV, Deputy Minister of Finance of Bulgaria, said efficient national development strategies largely depended on a complex combination of factors, which included country ownership of its future, full mobilization of domestic resources, and support from the international donor community.  The European Union target of 0.7 per cent of gross domestic product (GDP) for ODA by 2015, which Bulgaria subscribed to, was ambitious, but achievable.  In addition to increased ODA, new innovative sources of financing were being considered by the international community, such as the International Finance Facility.  The expected benefits from such proposals should be carefully balanced against potential difficulties and obstacles in implementing them.

    In Bulgaria, sound financial and macroeconomic policies had proven effective in achieving long-term financial stability, resulting in annual economic growth of 4 to 5 per cent over the past seven to eight years.  The country had employed such policies in restructuring and reducing its external debt from more than 120 per cent to 38 per cent of GDP in the last two to three years.  The Bulgarian experience had clearly shown the importance of transparent and effective governance, establishing the rule of law in both judicial and economic sectors, and combating corruption and organized crime at the national and regional levels.

    MAURICIO GOMEZ LACAYO, Vice-Minister-Secretary of Economic Relations and Cooperation of Nicaragua, said that it was obvious that donors and recipients realized that cooperation must be effective and have an impact.  The quality of development assistance was the key to the success of the various points in the Monterrey Consensus.  There must be greater efficiency and effectiveness, and resources must have greater impact on countries’ socio-economic development.  It was necessary to examine the conditions in receiving countries and the philosophy behind the cooperation provided by donor countries.  Nicaragua and others had assumed leadership and established national development plans and created the tools to guarantee effectiveness and transparency.  The same must be done in the international community.  His country had participated actively in the follow-up to Monterrey and the high-level forums of Rome and Paris.

    He said it was necessary to promote machinery for rapid action on development; to put forward national development plans; to create better balance between investments in social sectors; and to show that cooperation could function in the area of economic growth.  What was also needed was to make a qualitative leap forward in development.  On the issue of debt, he emphasized the need to work within the context of the Heavily Indebted Poor Countries (HIPC) Initiative.  He congratulated the Group of Eight (G-8) for dealing with multilateral debt.

    In a globalized world, he noted, it was important to make public investments in countries that were net receivers of external cooperation, and to ensure better quality of external resources.  Free trade treaties had provided great opportunities that must be maximized.  It was also necessary to increase competitiveness.  In order to ensure good governance, it was important to strengthen capacities and to invest in national institutions.  In addition, access to public services must be seen as an issue of human rights.

    PEDRAG BOSKOVIC, Vice-Minister for Foreign Affairs of Serbia and Montenegro, said that developed countries should provide assistance mainly to those nations that had demonstrated resolve in implementing economic and political reform, opening up their economies and fighting corruption.  His country supported recommendations to increase ODA from 0.44 per cent to 0.54 per cent of GDP by 2015, and to increase assistance to countries registering progress in achieving the Millennium Development Goals by 2005.  Developed countries should also set deadlines for increasing ODA and achieving the target of 0.15 to 0.20 per cent of GDP for ODA to least developed countries.

    Serbia and Montenegro had set up a working group to monitor achievement of the Millennium Goals in October 2004, he said.  A group of national experts in health, education, social policy, environmental protection and global partnerships had prepared the Review of Implementation of the Millennium Development Goals in Serbia.  The country based achievement of the Goals on integration into the European Union, harmonization of its laws with developed States, the reduction of poverty, the strengthening of democracy, and regional cooperation.

    ANA HRASTOVIC, Assistant Minister for Finance of Croatia, noted that her country was very likely to achieve all of its specific Millennium Development Goals.  The first lesson learned in achieving progress towards the Goals was a need for clear country ownership.  Country ownership, enhanced by the mobilization of domestic resources and policy coherence among development partners, was of crucial importance.  Croatia’s economic strategy was consistent with the policy programme supported by the International Monetary Fund (IMF)’s Standby Arrangement, and the overall macroeconomic policy would also be supported by a number of structural measures to be further enhanced by the World Bank.  The main pillar of the programme was the fiscal adjustment needed to limit external vulnerability and the increase of Croatia’s external debt-to-GDP ratio.  The programme also aimed to enhance transparency and financial management in the government and public sector.  The best way to achieve the Millennium Development Goals was to integrate country-specific goals into domestic economic strategies and support them further with development partners’ programmes.

    Another lesson learned was the need to coordinate policies internally, she said.  In Croatia, the Ministry of Foreign Affairs and European Integration had been assigned the task of monitoring the Millennium Development Goal process and acting as main partner of the United Nations Development Programme (UNDP) in implementation.  She supported improving the processes and capacities at the country level in order to strengthen the voice of developing countries, while not forgetting transitional economies.  Further capacity-building in transitional countries was important for supporting their active engagement in the international development arena, and active participation as owners -- not only borrowers -- in Bretton Woods institutions.

    GEORGE GYAN BAFFOUR, Deputy Minister of Finance and Economic Planning of Ghana, said the gulf between North and South had widened in the past two decades, despite a plethora of internationally agreed development goals.  Such a state of affairs called not only for a radical change in the approach to development issues, but also for both developed and developing countries to translate those goals into realistic and workable actins.  The new concept of development embodied in the Monterrey Consensus provided both a positive framework and the right impetus for developing countries to pursue the implementation of responsible socio-economic development agendas, and for developed countries to complement those efforts by supporting, both morally and financially, the poverty-reduction agendas of developing countries.

    The Millennium Summit could not have come at a more appropriate time for Ghana, he said.  The goals and targets both vindicated and validated the development initiatives it had been pursuing since the late 1980s. The Millennium Development Goals, together with the Monterrey Consensus recommendations, captured the very essence of the strategies contained in the Ghana Poverty Reduction Strategy. Regarding poverty reduction, Ghana had made good progress, reducing the number of people living below the poverty line from over 52 per cent in 1992 to 42 per cent in 1997, with a further reduction to 35 per cent in 2003.  Gains in the area of health, however, were less encouraging.  In the globalized world, developed countries’ support was a sine qua non for real progress.  In pursuit of sustained economic growth and poverty reduction, Ghana’s Government emphasized democracy, good governance, the rule of law and respect for human rights as essentials for sustainable development.  The free and fair elections of the past 12 years testified to the democratic path Ghana was charting.

    RUBÉN RAMIREZ, Vice-Minister for Economic Affairs and Integration of Paraguay, said it had been recognized that developing countries had the primary responsibility for mobilizing their national resources to finance their development.  In that regard, his country had instituted a programme to strengthen governance and fight corruption, among other things.  However, development assistance was still needed on a timely manner, without conditionalities and on favourable terms.  That way, it would be possible to strengthen internal efforts and bring out investments for development.  At Monterrey, developing countries were convinced that the Consensus adopted was the right means to fight poverty and allow for countries to enjoy better living conditions.  The results of that Conference were only the beginning of a long road that both developing and developed countries must travel together.

    According to the Economic Commission for Latin America and the Caribbean (ECLAC), poverty in his region continued to be high, with 96 million living in conditions of extreme poverty.  That showed that the gap between rich and poor countries continued to widen, with no solution in sight.  The problem of poverty continued in many countries.  National development must accompany international assistance.  To develop small and vulnerable economies, such as the least developed countries and the small island developing States, the factors that would influence a change of course required actions of different kinds.  There must be broad and unrestricted access to world markets for those countries.

    The Monterrey Consensus, he continued, had stated that trade was the most important instrument to finance development.  But the share of developing countries in the world trade system had been marginal.  That situation was particularly dire in the case of landlocked developing countries.  It was important to bear in mind the high costs those countries must shoulder in shipping products to principal markets.

    ALOUNKEO KITTIKHOUN (Lao Peoples’ Democratic Republic), speaking on behalf of landlocked developing countries (LLDCs), said financing for development had remained indispensable in achieving sustained economic growth, especially for LLDCs.  While mobilization of domestic resources had improved in many developing countries, LLDCs had lagged behind, mainly due to slow economic growth and declining levels of foreign direct investment (FDI).  For LLDCs to overcome such restraints and move forward in pursuing developmental goals, the donor community should give them unconditional support. He appealed to the international community to increase ODA and facilitate greater flows of FDI to LLDCs, so that they could meet their developmental needs.

    Landlocked developing countries had remained marginalized from the world trading system due to their high transport costs and lack of territorial access to the sea, remoteness from world markets, poor transport infrastructure and burdensome border crossings, he said.  Current LLDC expenditure on transport and insurance as a share of total export earnings doubled that of developing countries overall, and tripled that of developed economies.  Such high costs prevented LLDCs from reaping the benefits of international trade, and kept them out of the regional and global economic mainstream.  Adding that his country hoped to see an open, equitable, rule-based and development-oriented multilateral trading system, he stressed the importance of concluding the Doha round by 2006, and called for current World Trade Organization (WTO) negotiations on market access for agricultural and non-agricultural good to focus on products of special interest to landlocked developing countries.

    HERALDO MUÑOZ (Chile) said that it was now necessary to strengthen multilateralism, and to move beyond analysis and evaluation.  It was also necessary to move towards a more just world order.  That was especially the case in Latin America, which had the greatest disparity in income distribution.  It was necessary to make the aspiration for development something tangible.  In that framework, Chile had participated in initiatives against hunger and poverty, particularly in an action against hunger and poverty initiative with Brazil and France.  In doing so, it had, with those countries, prepared a menu of innovative mechanisms to promote complementary flows to development assistance.  The Millennium Declaration had identified the goals to be achieved by 2015.  The Monterrey Consensus and the Johannesburg Plan of Action had laid down the processes and identified responsibilities in that regard for consistent action at the national, regional and international levels.

    He noted that the 0.7 per cent ODA target was not enough to carry out the tasks to achieve the goals set.  He reaffirmed the need to promote positive interaction between the private sector and all social actors in the economic and social development of countries.  In the multilateral framework, it was necessary to complete the Doha round of WTO negotiations, eliminate practices which distorted trade, generate fair competition and provide access to markets.  No one should be excluded from the fruits of globalization.

    ZHANG YISHAN (China) said the most urgent task in financing for development was to bridge the financial gap.  Due to historical and current reasons, developing countries had not been able to get out of their financial difficulties.  Coupled with shortages of domestic financial resources, international commitment to financial aid had never been fulfilled and the “development deficit” had remained unsolved for a long time.  Many African and least developed countries were bogged down in “poverty traps”, lacking the essential resources for national infrastructure, social services and public management.  In some countries, heavy debt payments had taken away their valuable resources, which would otherwise be spent on development.  Such problems must be corrected.

    He said the European Union had taken an important step towards formulating the timetable for realizing ODA targets, and it was to be hoped that other developed countries would also follow their steps to reach the targets at an early date.  Second, debt cancellation and reduction should be extended and deepened and China welcomed the initiative by the G-8 finance ministers to forgive the debts of 18 heavily indebted poor countries.  Third, China looked forward to the International Finance Facility, which would hopefully provide experiences for more extensive financing arrangements.  Fourth, a monitoring mechanism should be established to intensify supervision of follow-up actions in financing for development, so as to ensure the timely delivery of high-quality ODA.

    From the long-term point of view, the key to financing for development lay in enhancing the capacity of developing countries for self-financing and diversifying the means of financing, he said.  That would be a long and arduous task and, to support them, the international community must help developing countries to strengthen their capacity- and institution-building.  It was important to create a favourable external environment, and especially a fair and equitable international economic system.  In terms of capacity-building, current international efforts to support developing countries were still rather generalized and some were even mixed with conditionality aimed at putting pressure on recipient countries, which was more harmful than helpful.

    He said that in order to create an enabling external environment and solve the systemic problems of developing countries, the international community should understand fully the special difficulties they faced in the globalization process.  They should be allowed to choose policies suited to their national conditions and given sufficient “policy space”, as high-handed actions would only aggravate their difficulties.  Also, the international community should build a fair, non-discriminatory and rule-based multilateral trade system.

    RONALDO MOTA SARDENBERG (Brazil) said that, at the national level, his country had combined sound macroeconomic policies with strong social programmes.  It had put into practice fiscal discipline, warded off inflation and adopted measures to stimulate economic growth.  As a result, its GDP had grown, its trade surplus had expanded and investments had increased at a fast pace.  It had also put in place the so-called “Zero Hunger” programme, which had already benefited millions throughout the country.

    Brazil, he said, had also endeavoured to put into practice Monterrey’s recognition of “the value of exploring innovative sources of finance”.  With that purpose, it had, together with Chile and France, launched the action against hunger and poverty initiative.  To follow up on that, a technical group on innovative financing mechanisms continued to elaborate proposals aimed at increasing the amount of resources available for development and ensuring better predictability of aid disbursements.

    Regarding the international community’s appraisal of what had been done to meet the Monterrey commitments, he noted that, on the one hand, there had been promising announcements in the fields of foreign debt and ODA.  On the other hand, some of the main guiding principles of the Consensus, unfortunately, had not been put into practice, such as the need for enhanced participation of developing countries in international forums.  Nor had any breakthrough been reached in the area of trade.  He hoped those and other issues would be taken up at the next WTO meeting in Hong Kong later this year.

    ANDREY DENISOV (Russian Federation) said that debt relief was vital in mobilizing resources to attain developmental goals and solve social problems.  This year, Russia intended to announce the cancellation of $2.2 billion in debt for the poorest African States within the framework of the HIPC Initiative.  However, cancelling debt by itself, without effective financial and budgetary policy and structural reforms, stronger institutions, and an improved investment climate, would not achieve favourable results.  Continuous increase in credit volume and constant cancellation of past debt gave the wrong signal to debtors.

    Supporting in principle the use of innovative sources of financing, he stressed that such mechanisms as the proposed International Financial Mechanism or international taxation to extend global economic assistance should be strictly voluntary, and should be adopted only by countries that considered such mechanisms compatible with their national legislation and economic capabilities.

    Adding that expansion of world trade would create additional opportunities for achieving the Millennium Goals, he called for a rapid completion of the WTO Doha Round of trade negotiations.  The international community must ensure stable, predictable and non-discriminatory conditions for market access for all, including countries in transition that have not yet acceded to the WTO.

    ASIM ARAR (Turkey), aligning himself with the statement made on behalf of the European Union, said poverty was still the main obstacle for an equitable international economic system, because it stemmed from unequal levels of production and an unbalanced income distribution among countries.  The responsibility for developing countries was to create a comprehensive national development strategy focusing on poverty reduction.  There was also a joint responsibility of both developed and developing countries to mobilize international resources for sustainable development.  Developed countries should design a pro-development international finance system to ensure a global flow of FDI.  To attract that investment, developing countries should implement the principles of good governance and the rule of law, as well as create a strong legal basis for market-friendly institutions.  Unfortunately, neither side had yet completely fulfilled those conditions.

    Developing countries should be provided with help to help themselves, he said.  International partners should focus on capacity-building for national administrations and transferring know-how about development policies and best practices.  Quick implementation of the commitments regarding the increase of ODA was also important.  The negative impact of the indispensable aid, however, was an increase in the foreign debt.  Heavily indebted countries deserved, therefore, special attention.  International trade had a central role in promoting, encouraging and supporting development activities, and his country, therefore, supported an early conclusion of the WTO negotiations.  It should, however, be kept in mind that, in the absence of global stability, no policy, good governance, rule of law and implementation of free market policies could deliver sustainable development.

    HAMAD HAREB AL-HABSI (United Arab Emirates) stressed the importance of strengthening international political will to develop a clear and integrated strategy for financing development.  International financial institutions and developed nations should commit 0.7 per cent of their GDP to ODA for developing countries, and 0.15 per cent to 0.20 to least developed countries, ensuring that such assistance was free of conditions.  They should also establish an international multilateral trading system based on equality among countries, which would aim to open international markets for developing country products, attract foreign investment and capital, and promote modern technologies for peaceful purposes.

    For their part, he continued, developing country governments should mobilize foreign investments to finance development programmes, as recommended by a series of conferences on South-South cooperation, the latest of which was held in Qatar.  The Qatar conference urged nations to adopt national plans to reform financial and social institutions, and called for stronger regional cooperation, especially in exchanging expertise, developing financial and human resources, advancing the private sector, and promoting bilateral and regional agreements aimed at promoting investments in financial, industrial and technological fields.

    IFTEKHAR AHMED CHOWDHURY (Bangladesh) said that, in the road towards development goals, each developing country must be in the driver’s seat.  Development could only be achieved on the matrix of pluralism, democracy, good governance, rule of law and gender justice.  To that end, his country had undertaken an array of reforms in both political and economic sectors, including deregulation and liberalization in every sector of the economy.  In doing so, it had achieved considerable progress in those sectors.

    He highlighted the plight of least developed countries, noting that 50 of them were seemingly caught in a trap of underdevelopment, poverty and structural weaknesses.  They continued to be marginalized, facing a variety of barriers in their major markets.  He urged the international community to provide immediate duty-free and quota-free market access for all exports of least developed countries.  As reiterated in Monterrey and Brussels, 0.20 per cent of gross national product (GNP) should be directed towards least developed countries.  Also, he noted that current debt relief efforts had been far from effective.  The outstanding debt of all least developed countries must be written off immediately, as that would free up much-needed resources for investment in development.  Whatever approach was chosen for fuller debt relief, it had to be additional to current assistance to least developed countries.  Likewise, a significant portion of foreign direct investment should be directed to the least developed countries.

    MOHAMED BENNOUNA (Morocco) stressed the need to reaffirm the North-South partnership represented by the Monterrey Consensus, and to take concrete decisions within its context.  Adding that the international community must mobilize the necessary financing to give hope to so many people living in want and poverty, he supported the European Union timetable of contributing 0.7 per cent of GDP to ODA by 2015.  Official development assistance must be combined with debt relief, however, and efforts made to accelerate implementation of the HIPC Initiative, as well as to attain substantial debt relief for all developing countries.

    Turning to trade, he said only predictable access to global markets could provide new momentum to sustain economic growth and achieve the Millennium Goals.  He appealed to developed countries to open up their markets and eliminate quotas on developing country products.  Developing countries would also benefit from the proposed International Financial Facility or some form of international taxation, which could mobilize major resources for development.  Regarding international governance, decision-making in international financial institutions must be reformed to allow countries of the South a stronger voice in matter of globalization.

    CHOI YOUNG-JIN (Republic of Korea) said that if the Monterrey Consensus was to be fully implemented, further measures must be undertaken by both developing countries and the international community.  Four areas that were crucial in that regard were cultivating domestic resources, providing sufficient and effective ODA, promoting trade and enhancing regional cooperation.  To maximize domestic financial resources, every developing country must adopt a national development strategy that strengthened good governance while supporting private sector-led economic growth.  Also crucial was sharing knowledge and lessons learned regarding the strengthening of good governance.

    He agreed that ODA played a critical role in supplementing domestic resources.  But just as important as increasing the quantity of aid was ensuring that it was used effectively.  Further measures should be taken to improve coordination among donors, strengthen good governance and align the dispersal of aid with the priorities of recipient countries.  As an emerging donor, his country had intensified its efforts to both increase its volume of ODA and to improve its policies and procedures on ODA implementation.  It was developing medium- and long-term strategies to further increase and improve its ODA. 

    While ODA was an important source of financing for development, aid alone could not ensure sustainable development over the long term, he added.  Trade played an important role in that regard, and he hoped the Doha development round could be soon successfully concluded.

    FAYSSAL MEKDAD (Syria) said the outcome of the Monterrey Conference was a crucial element for implementing the Millennium Development Goals.  Syria had transformed itself into a real workshop in various areas of development, in order to achieve the aspirations of its people.  It was one of the first States to submit its report on achieving the Millennium Development Goals, despite the hardships it had faced.  Syria’s development depended, to a large extent, on the mobilization of domestic resources.  The country was increasing national investment, producing structural transformations, and had a market based on competition.  It was also reforming education, promoting research and development, and stressed the role of civil society and women in development.  A number of laws had been adopted to implement the main development projects of the country and to improve the investment climate. 

    He said that, despite the fact that the Monterrey Consensus had stressed trade as the driving force of development, some parties were hampering the use of international trade to finance development.  He supported the appeal for the WTO to facilitate the accession of developing countries.  He welcomed the European Union’s decision to achieve the 0.7 per cent ODA target, and encouraged other States to establish timetables to increase their volume of assistance.  Given the urgency of development in Africa, Syria had made the continent a priority when it came to ODA.  The debt of all least developed countries should be cancelled, and not tied to ODA.  He also welcomed efforts to find innovative sources of financing for development, and called on all developed States to adopt measures in keeping with Brazil’s initiative.  Development was a right for everyone, and should be the top priority at the September Summit.

    CARMEN MARÍA GALLARDO HERNÁNDEZ (El Salvador) stressed that developing countries must overcome obstacles to sustainable development by creating the appropriate conditions for international trade, promoting good governance, and empowering civil society as a whole.  They could not accomplish such tasks alone, however, and must have technical cooperation and other assistance from developed countries and international financial organizations.  Developed countries must abide by their commitments to provide investment and relieve unsustainable external debt.

    In efforts to achieve the Millennium Goals, her Government was determined to create jobs through new enterprises, and had increased the general budget by 7 per cent to support local development.  Such efforts, however, must be accompanied by an increase in international capital flows, as well as foreign direct investment for sustained economic development.  In addition, the international community must develop predictable trade rules and seek to protect vulnerable economies, including medium-income economies, in its efforts to combat poverty.

    MIHNEA IOAN MOTOC (Romania) said that, as an emerging donor, Romania would increase over the next few years the volume of development cooperation with developing countries and countries in transition.  As an acceding country to the European Union, it would take on board new responsibilities in the field of development policy.  It would also continue to extend technical assistance on a bilateral basis.  He felt closer attention should be paid to the phenomenon of emerging donor countries.  Among other things, their coming on board should normally multiply the chances for meeting the targets for development assistance.  The new or emerging donors from his part of the world were keen on meeting the high ODA targets set out by the European Union. 

    For its part, he said Romania wished to be able to deliver on commitments and expectations.  He was confident that joining the European Union -- the largest donor of development assistance, and the foremost contributor to multilateral trade assistance programmes in the world -- would prove an invaluable “learning-by-doing” experience.  Increasing the effectiveness of development cooperation implied adequately responding to partners’ needs, simplifying operating procedures and enhancing coordination. 

    ROBLE OLHAYE (Djibouti) said that, according to the Secretary-General’s report, foreign direct investment remained geographically concentrated, with certain regions suffering steady declines and others showing signs of weakness in competing for newer and higher-quality investments.  Africa, in particular, was likely to show a modest increase in foreign direct investment flows.  But there, again, those investments remained largely concentrated subregionally and sectorally.  The report further elaborated that most least developed countries had fallen further behind in real growth in GDP.  Accordingly, sub-Saharan Africa, in particular, was off-track in meeting the Millennium Goals, and the number of people living in absolute poverty in Africa had grown by about 40 per cent in the last decade.

    The Monterrey Consensus had identified trade as the single most important external source of development financing, he recalled.  However, the participation of many developing countries in global trade remained marginal.  Hence, a breakthrough in the Doha Round of negotiations in favour of developing countries was crucial.  It was now widely accepted, he said, that many poor developing countries would miss out on achieving the Millennium Goals unless ODA was substantially augmented, both in quantity and quality.  Achieving ODA goals would involve more developed countries meeting their commitments to reach the 0.7 per cent target.  He also welcomed innovations such as the tax on airline tickets or foreign exchange purchases.  It was imperative that the international community remain open to financing suggestions and proposals.   

    MUNIR AKRAM (Pakistan) stressed the need for sound economic policies and good governance for turning around even the worst performing economies.  Development also required adequate financing, however, and would be difficult in countries with a net outflow of resources from developing to developed countries. Viewed in that context, current ODA targets, as well as proposed debt relief, seemed inadequate in achieving the Millennium and other agreed development goals.  The September Summit should redefine “debt sustainability” as the level of debt consistent with achieving national development goals, and consider significant debt cancellation for all developing nations, including heavily indebted middle-income countries.

    Emphasizing the need for foreign direct investment flows to a wider range of developing countries, he said they facilitated technology transfer, created jobs, boosted productivity, enhanced competitiveness, accelerated economic growth and eliminated poverty.  Unfortunately, such flows were a small fraction of global investment flows, and were concentrated in only a few emerging markets.  The September Summit should endorse national and international measures to generate domestic, as well as foreign direct investment in low-income countries.  Those measures could include international and national investment guarantee schemes, tax and other incentives, and revised “risk rating” arrangements to help direct a greater flow of private investments to developing countries that could not attract such transfers through normal market mechanisms.

    An open and equitable international trading system was also vital for sustainable growth and development, he said.  The Summit should identify development objectives of the Doha Round, and act to bring immediate benefits for developing countries before it even concludes.  Among other actions, the Summit should agree on an end date for eliminating agriculture export subsidies by developed countries; commit to the elimination of tariff peaks and tariff escalation against exports of developing countries; impose a moratorium on anti-dumping actions against low-income countries; and put an end to arbitrary and abusive use of sanitary, phytosanitary and other standards to restrain exports of low-income countries.

    LOUIS MICHEL, European Commissioner for Development and Humanitarian Aid and Chair of the observer delegation of the European Community, said that the Monterrey Consensus, for the first time, instituted the global partnership for development, which was central for eradicating poverty.  Progress had been made, but it was not enough.  That was unacceptable, both humanly and politically.  Given the persistence of poverty and globalization, radical change was necessary.  The main responsibility was on developing countries themselves, which must put in place bold strategies to combat poverty and become owners of the development process.  They could not do that without effective integrated governance. 

    The international community, he continued, could not dodge its responsibilities in that process.  It must do more, do better and do it more quickly.  The European Community was committed to that process, and had agreed to increase its budget.  The European Union was already one of the primary donors and through its new decision would consolidate its leadership for development.  It now had a new timetable and precise targets to attain the 0.7 per cent ODA target.  He supported suggestions for innovative sources of financing, such as the initiative for a voluntary tax on airline tickets.  He was also studying the possibility of using the anti-trust levies, as an additional contribution to the development budget. 

    He added that improving the quality and effectiveness of aid was another challenge, in addition to increasing the volume of aid.  He stressed the need to stop having administrative demands which were often not connected with the facts on the ground.  The Union had adopted a coherence policy for development, to ensure that internal policies adopted within the Union would not undermine the achievement of the Millennium Development Goals.  Also, the Union had adopted proactive, pro-African policy, particularly for sub-Saharan Africa.  The whole donor community must live up to its promises relating to development. 

    YERZHAN KH. KAZYKHANOV (Kazakhstan) said international development partners of developing and least developed countries should continue to provide required assistance in order to implement national poverty-reduction strategies.  Immediate debt relief should be provided for highly indebted poor countries.  His country attached great importance to innovative and unconventional sources of financing for development initiated by the United Nations and several Member States.  Also, an open, rule-based and equitable multilateral trading system could play a significant role in stimulating economic growth.  Close cooperation between the Organization and the Breton Woods institutions, and a more active role of the regional and subregional organizations would help to successfully achieve people-centred development.

    He said Kazakhstan actively contributed to the implementation of the Millennium Development Goals.  It had built a functioning market economy, and rapid economic growth had made it possible to substantially expand government expenditures in the social sector.  He asked for clearer and more specific recommendations regarding assistance by development partners to landlocked developing States.  Tapping the potential of such major international agreements as the 2003 Almaty Programme of Action and global partnerships to address the special needs of landlocked developing countries should be a priority.  Regional cooperation, in particular South-South cooperation, and open borders, free of tariff and customs barriers, were key to making economies more competitive.  His country had, therefore, focused on the establishment of a Union of Central Asian States, proposed by its President.

    LAXANACHANTORN LAOHAPHAN (Thailand) said that international trade had remained the most powerful and sustainable source of financing for development. The WTO Doha Round of trade negotiations must be completed by 2006, paying special heed to enhanced market access for developing country products, as well as commodity prices.

    Addressing FDI, she said Thailand not only received foreign investment from various international corporations, but was itself investing in neighbouring countries.  Investment between developing countries had been increasing and was becoming an important source of additional financing for development.

    Thailand was also working with both developed and developing partners to establish the Asian Bond Fund, which would not only be a vital resource facility in the Asian region, but would act as a safeguard against fluctuations in international financial markets.  Official development assistance played an important role in financing development, but should supplement other sources such as domestic resources.  She commended those nations who had fulfilled their ODA commitments, and urged those who had not to do so without delay.

    SERGE CHAPPATTE (Switzerland) said it was crucial that developing countries -- which had primary responsibility for their own development -- formulate and implement efficient and effective poverty-reduction strategies, establish policy frameworks enabling sustainable development, and mobilize domestic resources.  Industrialized countries were called on to increase and further improve the quality and effectiveness of their ODA, facilitate the transfer of resources and continue to open their markets to developing countries, especially the poorest.

    Since Monterrey, Switzerland had been increasing its ODA continuously and was reaching what it considered to be a realistic objective, he said.  Despite a comprehensive rebalancing exercise of the federal finances, ODA would be among the very few budget items growing over the next few years, namely, by 8 per cent over the period 2006 to 2008.  Also, Switzerland would actively pursue its support in the different domains of the Monterrey Consensus, particularly regarding the enhancement of good governance and management capacities, and pay particular attention to partnerships with the private sector with a view to further increase the impact of the country’s ODA.

    Concerning debt, he said that his country had actively contributed to concrete debt-alleviation measures through innovative bilateral debt cancellation programmes and through involvement in the HIPC Initiative.  While he continued to have reservations regarding the possible introduction of global mechanisms and facilities for mobilizing new resources for development, he was willing to examine participation in more limited mechanisms on a voluntary basis, such as the recently proposed financing facility to support immunization.

    BRUCE MONTADOR, Vice-President of the International Development Agency of Canada, said that this year promised to be a turning point in the fight against poverty.  The global community had mobilized and momentum was building.  At Monterrey, the international community established the basis of a partnership to help mobilize the resources necessary to achieve the Millennium Goals.  Canada was committed to supporting the efforts of developing countries to establish strong foundations for their sustainable development.  Clearly, that meant increasing its aid.  Since Monterrey, Canada was on track to fulfil its promise and double its aid by 2010.

    More importantly, he said, Canada wanted to make its aid better and more effective, and was aligning its efforts with the priorities of its development partners.  However, aid was only a small part of the development puzzle.  It worked best when it was part of a broader and more coherent set of policies.  By establishing clearer links among its development, diplomatic, trade and security agendas, his Government would help to ensure that its actions in areas other than development cooperation took the interests and needs of developing countries into account.

    Canada, he said, supported the negotiation of foreign investment protection agreements or bilateral investment treaties to better manage and mitigate investment risk.  Also, it viewed the WTO as an important forum in the approach to help achieve the Millennium Goals.  He noted that the recent G-8 decision to cancel 100 per cent of the debts of some countries was an excellent result for Africa.  Canada was increasing its investments in Africa, where needs were clearly the greatest.  It was doubling its 2003 level of aid to the continent by 2008.

    TENS KAPOMA (Zambia) said that his country had successfully reached the HIPC conclusion point in April, resulting in the reduction of its debt stock of $7.1 billion in 2004 by $3.8 billion.  Also, Zambia was one of the beneficiaries of the 100 per cent debt cancellation by the Bretton Woods institutions at the last meeting of the G-8.  Consequently, the debt stock had reduced significantly to less than $2 billion, which would facilitate increased expenditure on development programmes.  The Government had embarked on policies and strategies that would ensure debt sustainability, among which were prudent debt management and soliciting for more grants as opposed to loans.

    In addition, Zambia was currently implementing the Harmonization in Practice Initiative and had signed a memorandum of understanding with 15 development partners, outlining partnership commitments on aid effectiveness based on ownership and mutual accountability, among others.  He stressed that more needed to be done to reduce conditionalities and increase untied aid; eliminate the multiple assessment frameworks; change the mindset of development partners who were still clinging to their “darlings”; and strengthen the donor field offices based in developing countries with powers to manage and make decisions on aid delivery to avoid the “post office syndrome”.

    MOURAD BENMEHIDI (Algeria) said the Monterrey Consensus still gave rise to much hope among developing countries.  However, developing countries did not own their own development, as the Consensus had stipulated, and developed countries were far from honouring their ODA commitments.  Developing countries, despite their lack of resources and capacity, had made commendable progress in reform and institution-building.  Stressing that developed countries should live up to their commitments to increase ODA to 0.7 per cent of ODA by 2015, he commended those countries that had already done so.  The international community must also promote FDI, which had remained at a ridiculously low level in several regions.

    Continuing, he said innovative sources of financing could be extremely beneficial, but should not take place of traditional sources in combating poverty and hunger.  Adding that debt was also a serious obstacle for developing countries, especially heavily indebted ones, he welcomed decision of G-8 to cancel external debt for heavily indebted poor countries.

    TERUNEH ZENNA (Ethiopia) said the record in achieving the Millennium Goals indicated a big disparity between regions.  The challenge of meeting the development goals in Africa remained one of the key reasons for enhanced international partnership.  He shared the Secretary-General’s view that countries adopt and begin to implement, no later than 2006, a national development strategy bold enough to meet the Millennium Goals by 2015.  Ethiopia had undertaken a series of economic policy reforms geared towards poverty eradication and sustainable development.  According to the Millennium Development Goals needs assessment report, Ethiopia would need $5 billion in ODA per year, while the present level was only about $1 billion.

    He noted that ODA would continue to play a crucial role in supplementing the resources of developing countries, particularly those in sub-Saharan Africa.  In addition to the need to raise the level of ODA, he underlined three areas the Secretary-General’s report had mentioned.  First, not only did ODA have to increase substantially, it was essential to direct at least half of ODA to sub-Saharan Africa.  Second, the call to increase ODA must be qualified, so that it referred to real increases in financial resources to support the Millennium Development Goals channelled through the budgets of recipient countries.  Third, the rise in ODA had to go hand in hand with improvements in aid quality and effectiveness.

    FRANCIS BUTAGIRA (Uganda) noted that developing countries created the necessary environment to allow for the mobilization of domestic and international resources for development.  Uganda had put in place the necessary macroeconomic policies through the poverty eradication action plan.  To encourage competitiveness, the Government had focused on raising productivity by improving efficiency in macroeconomic management; providing public goods, infrastructure and information; and ensuring security, law and order.  Investments in health, education, water and sanitation were also a priority that would lead to higher productivity.

    Uganda welcomed the G-8 announcement of debt cancellation for highly indebted poor countries, which should be supported by sustained measures to ensure that those countries did not fall into unsustainable debt once again.  Being a least developed country and a primary commodity dependent country, he said Uganda was interested in seeing implemented the provision in the Monterrey Consensus for targeted financial technical assistance and capacity-building programmes, as well as immediate duty-free and quota free access for all least developed country products into developed country markets.

    Although they had pursued sound economic policies, countries like Uganda were faced with negative economic growth due to external factors, he said.  It was time for action to address global systematic imbalances by enhancing coherence and consistence in the governance of international institutions dealing with trade, financing and monetary issues.  The voice and participation of developing countries in systematic issues would make for a more realistic outcome.

    IMERIA NUÑEZ DE ODREMÁN (Venezuela) said that the decade of the 1990s had created a framework focusing on development, with developing and developed countries moved towards consensus.  In Monterrey, countries undertook shared responsibilities for ensuring development.  In spite of the efforts made, the prognosis was that the world was moving towards regrettable failure in the fight against poverty.  At that rate, the Millennium Goals would not be achieved by 2015.  In the area of trade, Venezuela had emphasized the need for a public review of the impact on Member States of the Marrakech Agreement.  Access by developing countries to major markets should not depend on conditionalities.  The policies of macroeconomic reform and open trade had aggravated the disparities between developed and developing countries.  That required implementing concrete policies to deal with debt and the problems of medium- and low-income countries.  External debt continued to have a pernicious impact on the economies of developing countries.

    In spite of all that, she said a response had only come from the World Bank and the IMF, which had only sought to guarantee the repayment of the debt of developing countries.  It was necessary to approach debt in a way that ensured the sustainability of the societies affected.  Venezuela supported the rights of developing counties to implement their development strategies, and rejected the imposition of conditionalities.  The past six years had been plagued by difficulty in her country, but it had shown what could be done if resources were mobilized to finance development.  There must be massive efforts by the people, who must take part in decision-making processes affecting the country.  Statistics indicated that her country would attain many of the Millennium Goals by 2015.

    ISIKIA RABICI SAVUA (Fiji) said that trade and economic growth was very important for Fiji.  A fair, open and equitable trading system, supplemented with adequate aid, were powerful drivers of economic growth.  While the recommendation to complete the Doha round of multilateral negotiations and the fulfilment of its development promise were lauded, Fiji’s concern continued to remain its outcome, which he hoped would be favourable to developing countries and small economies.

    He called for enhanced market access for products, and strengthening the supply side capabilities and productive capacity in developing countries to strengthen export competitiveness and build capacity to overcome trade challenges arising from trade liberalization.  The September Summit should also address trade distortion through subsidies, as commonly practiced in developed countries.  In sum, developing countries needed financial support and “policy space” to lift their exports sector and “grass-roots economies” from the doldrums and enable them to be competitive.

    He said that natural disasters experienced in small island developing States in the recent tsunami exposed their vulnerability and fragility.  He asked for appropriate technical and financial assistance to ensure the effective and full implementation of the Mauritius Strategy.  He also drew attention to the seeming lack of focus paid to developing countries in Asia and the Pacific that were in dire need of assistance.

    DIRK JAN VAN DEN BERG (Netherlands) commended the European Union decision to raise ODA according to a specific timetable in coming years, but stressed that that was not enough.  Other donor countries should also increase their ODA contributions to enhance the sustainability and predictability of development financing.  Emphasizing that debt relief could also play a key role in liberating resources needed to achieve the Millennium Goals, he welcomed the decision by G-8 finance ministers to cancel the debt of highly indebted poor countries to the IMF, World Bank and the African Development Bank.  He stressed, however, that debt relief should not reduce resources available to other developing countries, or jeopardize the long-term financial viability of international financial institutions.

    Turning to microfinance, he said it had huge potential in reducing poverty and attaining the Millennium Goals.  The World Bank’s publication “Doing Business” could devote a separate edition to financial sector development issues, including financial snapshots, as well as concrete recommendations and best practices.  National microfinance platforms could support their governments in implementing those recommendations, and a high-level task force could advise and advocate for microfinance as a major contribution to poverty reduction.

    JIHAD AL-WAZIR, Deputy Minister of Finance of the Palestinian Authority, said that Palestine was one of the main recipients of international aid and, with the help of the international community, had been undergoing significant reforms at all levels of society.  In the last three years, it had taken key steps towards economic and political reforms, culminating in the democratic presidential and municipal elections.  Also, a series of financial reforms had been enacted, which had proven the capacity of the Government to manage resources efficiently, and to formulate, implement and enforce sound policies and regulations in a transparent manner.  Those reforms had been recognized by the World Bank and the IMF as among the best in the region.

    Yet, despite those reforms and significant international donor support, the humanitarian and economic situation of the Palestinian people remained bleak, he said.  Israeli occupation policies, such as closures and the continued building of the wall, had severely restricted the possibilities of any significant economic development.  Private sector-led growth was the key instrument for Palestinian economic recovery.  For the private sector to succeed, it required both a stable and secure political environment, which allowed unimpeded access to regional and international markets, as well as an internal environment characterized by transparency and good governance.

    ANDA FILIP, Permanent Observer of the Inter-Parliamentary Union, said developed countries must generate the political will to devote more resources to international development.  Decision-makers in those countries must be convinced that they have the people’s support to commit fully to development, which was where national parliaments played a key role.  Over the past few years, there had been more direct parliamentary involvement and reflection in development policy and financing, particularly in donor nations.  Moreover, more and more members of parliament were travelling to developing countries to see for themselves how development assistance and other programmes were being implemented.  Those and other signs showed increased political awareness of developing country needs within industrialized countries, which must be retained.  The role of parliament would be critical in the next few years to keep development financing high on the domestic agenda through systematic and long-term processes.

    He also noted that decision-making in many developing countries needed strengthening, so that such nations could truly “own” development.  Ownership not only entailed governmental decisions, but also parliamentary consultation, debate and scrutiny.  To this day, there were too many instances in which parliaments were not appropriately informed of governmental negotiations with the donor community and international financial institutions.  Those practices ran counter to good governance and failed to contribute to coherence and coordination in designing developmental plans.  The building of parliamentary capacities in developing countries, especially in those affected by war or civil strife, must remain a priority.

    IAIN LOGAN, Senior Advisor, International Federation of Red Cross and Red Crescent Societies, said that 181 Red Cross and Red Crescent Societies around the world carried out core programmes and activities that contributed to achieving the Millennium Goals.  That was often most effectively done by providing essential community-based contributions to disaster preparedness and response, health and social care, the dissemination of humanitarian values, and longer-term development.  The International Federation appeals annually for long-term development funding and through emergency appeals for humanitarian disasters.  That covered a spectrum of challenges well articulated within the Millennium Goals, including HIV/AIDS, disaster preparedness and risk mitigation.

    He continued to urge governments to support and partner with their national Red Cross and Red Crescent Societies in both the humanitarian and development fields, to reinforce risk mitigation and disaster preparedness as a means of ensuring better resistance to disaster and disease.  Year after year, disaster after disaster, he had insisted that proper financing should apply to all disaster-preparedness measures.  The Indian Ocean earthquake and tsunami was only the most recent reminder that the tragic human toll and suffering could have been avoided by investing more in disaster preparedness and advanced protective measures.  Disaster preparedness and risk reduction were integral to national development plans and were worthy of the same financial support that often came during response to sudden onset emergencies.

    INDRAJIT COOMARASWAMY, Commonwealth Secretariat, said that urgent action was needed for Africa.  The level of deprivation on the continent was unacceptable in today’s world, which knew how to make poverty history. Reversing the deteriorating situation in Africa would require sustained economic growth.  That would require a commitment to genuine partnership.  Africa and its leaders should lead the transformation.  The New Partnership for Africa’s Development (NEPAD) and the Monterrey Consensus provided the road map and the Millennium Goals the objectives.

    He said the single most important challenge for rich countries was to stop the economic damage inflicted on the poor through the international trading system.  It was important that new preferential treatment measures achieved their intended objectives.  It was now clear that the Millennium Goals would not be attained without a doubling of aid.  The proposal of Chancellor Brown of the United Kingdom for an international finance facility and the French and Brazilian proposals deserved support and early implementation.

    The provision of 100 per cent debt relief for heavily indebted poor countries that had reached completion points was encouraging, he said.  There was clear evidence that small States were being marginalized as globalization advanced.  Their vulnerability, along with loss of trade preferences and a decline in ODA, meant a decline in their economic performance in recent years.  He added that the governance structure of the Bretton Woods institutions could be reformed by ensuring that they better adhered to democratic principles.

    WILLIAM JACKSON, Director, Global Programme of the International Union for Conservation of Nature and Natural Resources, called on States to ensure that environmental sustainability and existing national plans outlining investment priorities for it were mainstreamed into frameworks for growth, poverty reduction, and each of the Millennium Goals.  States should also correct market failure and distortion through such initiatives as:  reflecting the costs of environmental degradation in national accounts; introducing payments for ecosystem services; phasing out environmentally harmful subsidies; and reforming tax structures to promote environmentally beneficial actions.

    The international community should also mobilize FDI and other private flows for development, ensuring high social and environmental standards for those private investments, he said.  Foreign direct investment was currently the largest source of financial flows to developing countries, but reached only a handful of nations.  In addition, it should agree to an “end-game document” before the upcoming WTO session to ensure that the Doha round could be completed in 2006, and that it contributed to sustainable development through further work on eliminating trade-distorting domestic subsidies negatively impacting the environment, including in the agriculture, fisheries, water, and transport sectors.

    KAZU SAKAI, Director General, Strategy and Policy Department, Asian Development Bank, said that, in Asia and the Pacific, impressive progress had been made in reducing income poverty, but that had largely been confined to a few countries.  The main challenge was to extend those successes to other parts of the region, and other Millennium Goals.  The Millennium Project Report found that, with respect to 20 Millennium Development Goal indicators assessed, the subregions within Asia-Pacific were on track to meet only a few of the indicators.  With its sole focus on the Asia and the Pacific region, the Bank was in a unique position to inform and galvanize support for Millennium Development Goal achievement in the region.  But, it could not do it alone.  All stakeholders must work closely together in common purpose, including the mobilization and allocation of the necessary financial resources.

    Economic growth was crucial -- both as a means to reduce income poverty and as a source of financing to achieve the non-income Millennium Goals, he noted.  In addition, building physical infrastructure was critical for realizing sustained economic growth in many developed countries.  A fiscally sound government, a vibrant private sector and successful public-private partnerships could play a large role in achieving adequate resource mobilization and efficient resource allocation for development.  He added that greater and more effective aid would be needed to accelerate progress towards achieving the Millennium Goals in the Asia-Pacific region, regardless of other efforts to mobilize domestic resources and private financing.

    NDIORO NDIAYE, of the International Organization for Migration, said the international community must consider how to better finance development programmes in the social sectors, which were long term, and the results of policies could only become visible after generations.  There was also a need to qualitatively and quantitatively improve education programmes, and increase resources in that area, since they could significantly contribute to development as a whole.  Moreover, the quality, accessibility and cost of health services were out of step with mobilized funds.  Also, improvements were needed in medical equipment, as well as training for health workers.

    Round Table 1:  Mobilizing Domestic Financial Resources for Development

    József Berényi, Minister for Foreign Affairs of Slovakia, and John Wasielewski, Director, Office of Development Credit, USAID Bureau for Economic Growth, Agriculture and Trade (United States), co-chaired the discussion.

    Participants pointed out that, while it had become clear in the years since Monterrey that perhaps the best response to poverty was prosperity, many of the strides made by developing countries and transition economies were being diminished by a host of difficulties which prevented them from boosting domestic financial and human resources in a predictable, sustainable way.  

    Speakers representing developing countries acknowledged that the Monterrey Consensus had reaffirmed their primary responsibility spur development from within, by strengthening governance, combating corruption and increasing domestic savings, among others, but that ignored many of the real structural problems such countries faced.

    Which should come first:  ensuring good governance or boosting domestic savings; promoting domestic savings schemes or pushing for equal access to global markets? asked a speaker from South-East Asia.  Countries with weak institutions and poor economic foundations were basically “starting from scratch” and had some very serious choices to weigh as they struggled to reach the Millennium Development Goals and promote home-grown reforms.

    Speakers from the Africa and the Middle East urged representatives from the developed world to consider special efforts to reinforce financing in countries where progress towards improving policy frameworks and enhancing institutions was lagging.  Indeed, it would take more than ODA to counter phenomena such as “brain drain” and capital flight.  Among other things, special efforts needed to be directed at boosting human resources -- ensuring better health care and education, for instance -- to help drive national development.  That would be particularly critical for sub-Saharan Africa, where women and children made up 60 per cent of the population.

    Several speakers pointed to booming economies like India and China, as well as Mozambique’s relatively robust economy and steady recovery under way in many Eastern European countries among clear successes.  But, it was clear that even in those countries -- particularly those with pockets of extreme poverty -- would require help identifying financial sectors and improving institutions and policies necessary to absorb and utilize resources effectively.

    The discussion turned to taxation, as well as to developing policies to promote strong banking regulation and supervision, better access to financial and credit services, long-term financing and bond markets.  

    Round Table 2:  Mobilizing International Resources for Development:  Foreign Direct Investment and Other Private Flows

    Co-chairing the round table were Baledzi Gaolathe, Minister of Finance and Development Planning of Botswana, and Datuk Mustapha Mohamed, Minister in the Prime Minister department of Malaysia.

    The importance of remittances from migrant workers, ODA and FDI were the focus of discussion with the representative of the International Organization for Migration, noting that since 1993 some $93 billion had been remitted officially, a figure that did not take into account informal remittances that could not be tracked and which could be two or three times the size of official remittances.  She stressed the need to reform the remittance system in order to reduce transfer costs and facilitate the investment of the consequent savings.

    A business sector representative, noting that remittances had represented significant proportions of gross domestic product in several developing countries over the last few years, said the important thing was how to harness those flows.  There was a lack of specialized banking for remittances and foreign leaders should be aware of that problem.  The banking sector in the United States did not offer banking services to the remittance services, which could lead to a decrease in remittance flows.  Fears of money-laundering may be justifiable, but they were also overblown and foreign governments must address the problem.

    The representative of the Organisation for Economic Cooperation and Development (OECD) said there was a need to eliminate artificial distinctions between productive and non-productive private remittances.  Private remittances required the right policy environment, as they were sometimes seen as a possible substitute for the ODA, whereas they were a matter of private choice.  At least one quarter of the ODA was linked, in one way or another, to mobilizing private investment, he added.

    Peru’s representative said FDI played a more important role in development than did international assistance.  It created jobs and was not speculative.  However, the historical trend whereby FDI flowed between developed countries and only to some 10 or 12 developing countries had not changed for some time.  Conditions in those developing countries included the lowest wages with a minimum wage below the international standard.

    A civil society organization representative stressed the need to establish proper regulatory frameworks before opening up a country’s borders to international financial flows.  There was a need to avoid a build-up of foreign financing exposures, which often caused volatility in commodity prices.  There was a need to make such countries much better targets for foreign investment and lending by ensuring they were stable and not subject to volatility.

    Cuba’s representative said that although the Monterrey Consensus recognized the need for stable and predictable financing, today’s figures reflected that the developing countries continued to be net remitters of funds to the developed world through the repayment of debt.  By employing only market criteria, there would be no contribution to the development of poor countries.  Therefore, FDI could only be a part of development financing and only if it was in keeping with national development plans.  For many low-income countries, external assistance was the most important source of development financing and commitments to provide aid could not be diluted, delayed and treated as mere political announcements of intent.

    Turkey said a bureaucratic approach had been adopted since Monterrey, which said it was a shared responsibility of the developed and developing countries.  That was a simplistic view.  That approach could not always be easily transformed into reality, since it did not take account of the eternal environment of developing countries.  However much they worked to establish the rule of law and free market policies, economic imbalances in major economies and their corrections translated themselves into external shocks on the developing countries.  So, it was first of all a matter of global stability that should start in the developed countries, first and foremost.

    Anwarul K. Chowdhury, Under-Secretary-General and High Representative of the Secretary-General for the Least Developed Countries, Landlocked Developing Countries and Small Island Developing States, drew attention to the situation of the least developed countries, saying that at least 50 of them did not get the deserved attention.  They must be supported through the creation of means to help them attract the necessary investment.  Second, there was a need to look into the usefulness of microcredit, which had a poverty-eradication dimension.

    Participants also heard contributions by the representatives of Tunisia, Senegal, Azerbaijan, United States, Hungary, Namibia and South Africa.  Other participants included representatives of the Global Fund to Fight AIDS, Tuberculosis and Malaria; the Economic and Social Commission for Asia and the Pacific (ESCAP); the World Bank; the Asian Development Bank; and the civil society organization Latin American Debt and Development.

    Round Table 3:  International Trade as Engine for Development

    The Co-Chairs were Fayza Aboulnaga, Minister for International Cooperation of Egypt, and Fernando Canales, Minister of Economy of Mexico.  Introductory statements focused on trade as a way of improving supply-side constraints on developing countries and on the difficulty of developed countries to open their trade doors.  How could trade promote development?  What could be done to make meaningful the December Doha Round in Hong Kong?  Was the state of trade as an engine for development a cause for satisfaction or cynicism?  Was there too much eagerness to reach targets at any price?

    Agency representatives noted the ministerial meeting to be held in Hong Kong in December would allow already approved new modalities to enter into the World Trade Organization (WTO) negotiation process.  A WTO paper would be published in July with rules on facilitating trade from the development aspect.  Heads of State should use the September Summit as an opportunity to consider how coherence could be achieved in trade and development, they said.

    Speakers called for parties to make the meeting succeed, as it was threatened by time constraints and rich country protection concerns.  One speaker called for ambitions to be raised, since now there was a “high risk” of a “low ambition” for the round.  The elimination of trade subsidies was only the beginning of issues to be addressed.  Others included:  increased market access; eliminating tariffs and quotas; development of complementary policies with adjustment assistance for developing countries; South/South trade; fiscal implications of tariffs as a source of income; revenue implications of trade liberation as a public goods expenditure.

    Also, Doha should set timetables that could be monitored, speakers said.  Developing countries should work with civil society to stop free trade from creating economic dictatorships.  Also to be addressed were the many variables in trade agreements that worked against the more vulnerable, including women and children. 

    Further, speakers said, for trade to aid development, there must be a focus on capacity-building, and it must be consistent with broader development principles.  It must be a multilateral effort and should be an additional element, and not a recycling of other aid.  A “pro-poor” approach should be taken on trade liberalization to benefit both developed and developing countries.  Developing countries should also be given flexibility in applying new rules.

    Agency, national and civil representatives stressed the importance of trade for development.  One speaker said all progress on debt relief and aid were only band-aids compared to trade.  Emphasis should be on removing the elements that hurt the poor.  Substantial progress on special and differential treatment, as well as on adjustment support must be reached by July, if the December negotiations were to succeed.  The WTO small economies work programme should identify special trade products identified for countries.  A strong development component must be built into investment agreements.

    A number of business-sector speakers called for a balanced emphasis on agricultural and non-agricultural exports to make trade an engine of development.  One said developed countries wanted to solve the problem of subsidies, but had a problem demonstrating to their own people the benefits of lowering the subsidies.  Financial-sector speakers said commodity price decline must be addressed.  They said liberalizing the financial sector was good for the industry, as long as other factors went along with it, such as capacity-building and transparency.

    A number of Member State representatives emphasized the importance of trade in quickly lifting people from poverty, if trade capacity assistance was provided.  They called on developed countries to decrease trade barriers and distortions at the Doha Rounds and to take up questions of duty-free access to markets, preferential treatment and supply-side constraints, along with timetables.

    Some representatives said the environmental and safety standards imposed by developed countries put constraints on the supply side of trade and made it difficult for developing countries to take advantage of even those trade opportunities aimed at them.  Diversifying the variety of exports would help, they said.  Others called for political will and an integrated framework for strengthening infrastructure and developing trade and political structures.  Developed countries should stop demanding reciprocation and work trade aspects into development programmes.  Along with diversification, competitiveness should be addressed through the operational measures of special and preferential treatment.  Finally, the credibility of the financial institutions must be restored.

    Round Table 4: Increasing International Financial and Technical Cooperation for Development

    Jean-Louis Schilz, Luxembourg’s Minister for Development Cooperation and Humanitarian Action, and Vongsey Vissoth, Deputy Secretary-General of Cambodia’s Ministry of Economy and Finance co-chaired the round table.

    The representative of the Food and Agriculture Organization (FAO) called for renewed emphasis on agriculture and rural development, given that 75 per cent of people in the developing countries lived in the rural areas and that agriculture was the backbone of most of their economies.

    Speaking on behalf of the similarly Rome-based International Fund for Agricultural Development (IFAD) and World Food Programme (WFP), he said that past trends of technical assistance did not reflect that reality and in the last 20 years there had been an almost 20 per cent decline in assistance to agriculture and rural development. There was too little recognition that hunger was not just the result of poverty, but also one of its main causes, since a hungry person could not be productive.  Investing in hunger reduction could have an extremely high return, he added.

    A civil society representative from Cameroon expressed his concern this morning about the moral and philosophical hypocrisy of some donors who supported corrupt and anti-democratic regimes that bore the real responsibility for the poverty of their countries.  The international community should support initiatives to repatriate funds diverted from developing countries by corrupt rulers.

    Calling for sanctions against industrialized countries that supported corrupt leaders, who were unwilling to give up power while knowing that their aid would not be spent on development, he said that the citizens of those recipient countries generally did not even know that they had received aid.  International assistance should be spent in the social field, on transforming local resources on the ground, as well as on renewable energy, rather than directed to the police or military, which would only strengthen the leaders in power.

    Austria’s representative said that an increase in ODA would mean a change in the delivery methods, as there would also be a shift from the project approach.  Currently, national non-governmental organizations were the best promoters of development and they also had much to do with implementing development programmes.  Their advocacy role was important in sustaining the political commitments made by their government.

    She said there was a need to devote more attention to the catalytic role of energy in achieving the Millennium Development Goals, none of which could be met without the availability of energy services.  Some of the increased resources that would become available should be used to build up energy systems in line with the climate-change dimensions mentioned in the Millennium Declaration.

    The representative of the European Commission said that increased assistance should be accompanied by better management, including a reduction in administrative costs.  The European Commission also supported budgetary support, which were more worthy of encouragement than projects, while projects only dealt with part of the problem.

    A business-sector representative said the progress noted regarding ODA and debt relief was very important, but there was a problem concerning the harnessing of expertise.  Even with more ODA and innovative financing there would still be a lack of expertise and infrastructure.  The amount of FDI had dropped and there was a real challenge to re-engage the private sector at all levels.

    The co-chair, Mr. Vissoth, said that none of the Monterrey commitments to increase official development assistance had been met in any substantive way.  However, the European Union had recently committed itself in real terms and given a time frame for increasing aid.  That increase must be fresh and not at the expense of emergency relief, debt relief or other commitments already made.

    He said that since the Monterrey Conference until the present Cambodia had expected a real increase in assistance, but it had turned out that ODA had actually decreased, due to decisions made in multilateral institutions like the World Bank, which favoured stronger performers and punished weaker ones.  International financial institutions were not responding to the needs of the country but were instead hampering its efforts to alleviate poverty.  There was a need to re-examine the system of allocating aid.

    Participants also heard from the representatives of France, Uruguay, Germany, United Kingdom, Brazil, Nicaragua, Zambia, Japan, United States, Slovenia, Italy and Bangladesh.  Also contributing was the representative of the OECD.

    Round Table 5:  External Debt

    The discussion was co-chaired by Errol Cort, Minister of Finance and Economy of Antigua and Barbuda, and Francis Gotds, Director for International Relations of Belgium.

    Speakers from developing counties, while welcoming the “Group of Eight” (G-8) finance ministers’ decision to wipe out the debt of some 18 poor nations, today reiterated their frustration with the international financial system as it stood today.  Without a complete overhaul of the major global money-lending institutions and more focus on commerce, finance and trade, over the long haul, the crippling debt burdens for many poor countries would never be significantly reduced, they said.

    Delegations and representatives of civil society stressed that poor countries, which had struggled to pay down their debts for years, would still need to ask for loans because their institutions and financial sectors had been severely weakened.  The G-8 measure was an important first step, but what they sought was 100 per cent debt cancellation, access to markets, enhanced foreign direct investment initiatives and assistance with technical and human resources to turn their economies around and raise the level of development.

    Africa, in particular, faced real problems with debt sustainability.  The representative of Guinea stressed that a closer look at the G-8 initiative would reveal that none of the beneficiaries were currently exposed to or recovering from the immediate after-effects of conflict.  And while it was clear that African countries, chiefly through the New Partnership for Africa’s Development (NEPAD), were making strides towards promoting good governance and the rule of law, the poorest and most war-affected nations on the continent needed not only total debt relief, but support for development activities.

    Switzerland’s representative said that there were still some technical issues that needed to be worked out regarding the G-8’s proposal, particularly in terms of “equity of treatment” regarding the beneficiaries.  The overall aim of the international community should be the re-entry of developing countries into global financial systems and markets, he added.  The representative of the Russian Federation stressed that debt cancellation should go hand-in-hand with improving financial policies, promoting structural reforms and enhancing investment climates in poor countries.  He added that Russia did not see the G-8 agreement as undercutting the HIPC Initiative that was not yet complete.

    The representative of Ireland also welcomed the G-8 initiative, but stressed that it must result in boosting resources for poverty reduction in poor countries.  He also said that, as the details were worked out, the focus should be on financing debt cancellation with new resources, not through the allocation of resources that had been earmarked for other development financing initiatives. Though the process was still in the early phases, Ireland looked forward to the involvement of more non-G-8 countries, as the technicalities were subsequently hammered out.

    Japan’s representative stressed the importance of utilizing loans more effectively to establish the necessary infrastructure needed for developing countries to do more than service debt.  The representative of the World Bank said that his institution welcomed the G-8 initiative as a source of augmented financing for affected countries.

    A representative from civil society warned that the discussion was not about reinventing the wheel but about not “reinventing the flat tire”.  Any new initiatives to ensure debt sustainability or relief should not be based on the same flawed thinking that had beset so many of the Bretton Woods institutions’ programmes in the past.  The “disorderly and delayed” debt restructuring system in place today had proved seriously damaging for many middle-income and poor countries, another advocate said, adding that all developing nations needed to be clear on what the rules were regarding debt sustainability.

    Another said that the current system was a “mess”, barely understood by the people on the ground living in misery.  Everyone was responsible for the situation -- creditors and debtors alike.  What was needed was a clear and comprehensive audit of what debts were owed, discussions on whether that debt was legitimate, and what the cost of debt relief would be.  It would take moral and political courage for all stakeholders to move beyond dialogue and make real change.

    Round Table 6: Addressing Systemic Issues:  Enhancing Coherence and Consistency of International Monetary, Financial and Trading Systems in Support of Development

    Co-chairing the round table were Hilde Johnson, Minister of International Development of Norway, and Ana Hrastovic, Vice-Minister of Finance of Croatia.  Introductory remarks stressed the coherence and consistency issues involved in global partnerships.  What kinds of policies reduced poverty and affected developing countries better than others?  What policies supported or hampered development?  How could governance be improved, including through the actions of donors?

    Numerous speakers called for governance changes in the global financial institutions to restore their credibility.  Many called for more support to the International Monetary Fund (IMF) and fewer restrictions and conditionalities on its assistance.  One speaker pointed out that the Bretton Woods institutions had at one time been essentially financial organs that had now become bodies of global democratic governance.  That was all the more troublesome, others added, because they were standard-setting organizations with little participation on the part of developing countries.  That meant the costs of compliance were borne by the countries who received assistance, while benefits accrued elsewhere.  The United States, for example, had been designated a lender of last resort because loans in private hands had wreaked havoc with the IMF programmes.  In addition, gaps in financial infrastructures left commodity-dependent countries open to shock.

    A first priority for the international financial system was to protect against shock, a number of speakers stressed.  However, the shock facility being designed for the IMF was inadequate, one said.  Not only were its provisions conditional, but it would not check the volatility of capital flows nor moderate the impact of shocks.  An element of expansion for official liquidity should be worked in and the voice of developing countries should be heard in standard-setting. 

    On addressing systemic issues in the global financial institutions, speakers called for a recalibration of the financial architecture and for weighting that recalibration in favour of the developing countries.  Some called for a closer coordination between the institutions and the United Nations Economic and Social Council (ECOSOC) in line with democratic principles to be applied in restructuring, implementation and governance.  Speakers called for the question of debt to be addressed and for strengthening transparency and accountability.  A number of speakers called for an end to talk, and an emphasis on implementation.

    The need to restore credibility of the World Bank, the IMF and the WTO was repeatedly emphasized, as was the need to make the ECOSOC the centre of coordination for development activities.  One speaker called for country reports to be submitted to the ECOSOC with a focus not only on ODA elements, but on related developmental issues, such as gender mainstreaming and the status of fisheries.  In addition, speakers emphasized the need for inclusiveness and for including those affected in the decision-making processes that concerned them.  One speaker called for consistency in Member State messages -- the tone of Member States discussing finances in Geneva was very different from the tone at Headquarters.

    In their turn, the representatives of the financial institutions said many changes had been made in their working methods over the past five years.  There was increased coordination, coherence and harmonization of programmes between the IMF, the Bank and the WTO.  Transparency and effective surveillance had increased.  One speaker said Member States should remember that “coherence starts at home”.  National ministers should talk to each other when negotiating with the institutions.

    Finally, a representative said the missing component in the international financial architecture was capacity-building.  If national capacities were weak, crisis management was difficult.  Technical assistance must be made available and must be made coherent across groups of developing countries.  In addition, the quality of the aid being given must be looked at.  Increasing aid without correcting the governance and transparency aspects wouldn’t make any difference.  Those in Geneva now weren’t preparing for the December Doha.  The poor “shouldn’t be beggars at the table”, one speaker said.

    Interactive Dialogue

    General Assembly President JEAN PING (Gabon) chaired an interactive dialogue this afternoon that focused on the links between the Monterrey Consensus and the Millennium Development Goals.

    The dialogue kicked off with a brief preview of the documentary film “Africa:  Open for Business”, which the President described as a true-to-life depiction of what could happen and was happening in Africa’s economic sector.  The film, which focused on Africa’s expanding industries and unusually high investment returns, among other things, will be screened in the Dag Hammarskjöld Library from 1:30 p.m. to 2:45 p.m. on 30 June.

    Setting the stage for the interactive dialogue, Jose Antonio Ocampo, Under-Secretary-General for Economic and Social Affairs, summed up the discussions that had taken place during the Assembly’s two-day High-level Dialogue on Financing for Development, saying that while the spirit of Monterrey was very much alive, the international community had not yet come to grips with what it would take to implement fully the global development financing agenda.

    He said that in the run-up to the Assembly’s September Summit, it would be crucial to make real headway on the promises made at the landmark 2002 Monterrey Conference -- where world leaders had agreed on a new partnership for development -- in order to help realize the Millennium Development Goals and the wider United Nations vision of dignity, prosperity and human rights for all.  He highlighted seven areas where progress was required:  enhancing the mobilization of domestic resources; approaching trade as an essential ingredient of financing for development; achieving increased and more effective ODA; encouraging more stable sources of external financing; achieving debt sustainability; raising the level of South-South cooperation; and strengthening the voice and participation of developing countries in decision-making.

    When the floor was opened for discussion, delegations agreed that the road to a successful September Summit went through Monterrey.  Egypt’s representative welcomed the cancellation of debt for some of the poorest countries and noted that debt swaps were also an effective way to help middle-income countries, as well as least developed countries out of debt.

    The representative of the United States said that within the next three years the Millennium ODA levels would be doubled, going by the numbers cited this morning by the OECD.  The money was in the bank and the need was to spend it wisely.  There was the beginning of a recognition that aid effectiveness would be the “hot issue” of the next five years.  There was a huge head-start in aid volume, but none in effectiveness.

    Countries and their problems differed enormously, he said, stressing that flexibility and empowerment were absolutely essential.  There was also a need for diversity in mechanisms, as well as for harmonization as opposed to homogenization, with specific mechanisms being adapted to specific situations.  Effective aid depended upon sustainability.  Social compacts were being made about education and health and the question was whether countries would be able to keep their commitments after 2016.  It was not entirely clear how capacity efficiency would be maintained.  Effective aid depended on leveraging private capital flows, and some of the mechanisms being suggested must be examined.

    There was a need to move huge flows into recipient countries, he said.  Some problems in Africa required immediate solutions, especially HIV, malaria and tuberculosis.  They could not be put off for another generation, or there would be no next generation to take care of it.  The humanitarian component of ODA was just as important as any other or the cost would be counted in lost generations.

    A representative of the Economic Commission for Europe (ECE), speaking on behalf of other United Nations regional commissions, described the lessons drawn from regional experiences, saying there was a need for a combination of greater resource flows and debt relief.  Middle-income countries also needed structural support to safeguard against economic and financial volatility.  As a complement to global initiatives, the emergence of innovative mechanisms could also be of great help.  One such initiative was to set up a regional bond market in Western Asia.  Early-warning systems could also prevent further financial crises.  There was a growing need for regional cooperation to coordinate policies for the benefit of developing and transition countries.

    Botswana’s Minister for Finance and Development Planning described the task of the round table he had co-chaired in the morning, noting that participants had recognized the need for improved infrastructure, better governance and macroeconomic development and the reduction of transaction costs.  By moving forward with regional integration, a bigger market was being opened and a flow of goods and services was being allowed across borders.  Investment should not only be from the North to South; there were now opportunities for South-South investment, which should also be promoted. 

    There was not enough FDI flowing to developing countries, particularly in Africa, he said.  It was, therefore, not enough to expect that if African countries put their houses in order, their prospects would automatically improve on their own.  Both the South and North should make an effort to encourage FDI flows.  Nothing much was ever reported in the media about Africa’s potential; only the bad news was reported, so investors failed to appreciate that potential.  By September the North and South should have come up with the means to improve FDI flows in both directions.

    Regarding remittances, he said the international community must make a deliberate effort to promote them by reducing costs and linking them with projects.  The round table had also discussed middle-income countries, which had their own special problems that should be addressed to prevent those countries from relapsing.  Among the challenges facing them was the question of diseases like HIV/AIDS and malaria, as well as natural disasters like drought, which diverted valuable resources away from development.

    Japan’s representative said economic growth must be at the heart of overall development policy, a point that had been highlighted during an Asia-Pacific ministerial meeting held last week.  Ownership must be at the core of all efforts, and reform was required not only in the financial sector, but also in terms of tax reform, the establishment of social safety nets and debt management, since debt relief could not be an end in itself.  There was a need to promote regional integration, including the development of intraregional trade and intraregional infrastructure.  There were also disparities within countries and among their peoples, particularly in the Asia-Pacific region.

    The representative of the Czech Republic said his country had increased its ODA threefold in the last five years and was determined to achieve the 0.7 per cent target figure, although it had not yet determined a timeline for doing so.  Regarding arms exports, the European Union code of conduct stated that they should not be exported to countries where the safety of the citizens could not be ensured.

    Jamaica’s representative stressed the need for reform and improvement of the international financial system, noting that there could be no total reliance on the “invisible hand” of markets.  Also, decisions on the taxation system should be more inclusive than they were at present, when they appeared to be the exclusive preserve of the OECD.  Remittances should not be considered as a means of financing development because they were really a source for consumption.

    Venezuela’s representative said that inequality in economic and social rights between developed and developing countries had only grown since the Monterrey Conference.  The present global economic model had increased the gap between countries, as well as within them, while the pernicious debt continued to deepen inequality in the distribution of goods.  There was a net flow of finance from the developing to the developed world, as well as growing consumerism.

    The problem of the foreign debt must be approached from a perspective that would guarantee that developing countries were able to carry out their development plans, he said.  With the World Bank insisting on debt repayments without regard to the needs of developing countries, the present set-up was a deliberate attempt to create a new colonial arrangement.  Meetings had shed light about the true determination of the international community to eliminate poverty, and Venezuela reaffirmed its commitment to the eradication of poverty as the most pressing challenge facing humankind.

    Speaking for the organization New Rules for Global Finance, a civil society representative said that systemic issues involved preventing financial crises and reducing their pain when they happened.  National governments must intervene in the market, which was not magic, in order to meet social goals.  The international community must come together at moments of financial crisis.  There was a need to deal with the problem of middle-income country debt before it turned into a crisis.

    Other speakers included the representatives of South Africa and El Salvador, as well as private-sector representatives.

    Closing Statement by General Assembly President

    General Assembly President PING, closing the High-level Dialogue, said that States must quickly and completely honour the Monterrey commitments.  The Dialogue was particularly important as part of the drafting of a global development agenda in the United Nations, in partnership with the Bretton Woods institutions and the international community.

    He said that of particular importance was a general feeling of urgency that had come forth, with Africa the focus of most concerns.  Many participants had emphasized the role that NEPAD must play, because it was in Africa that the biggest challenges must be faced.  There was an urgent need to honour, and even go beyond, the commitments on trade and debt reduction.  The importance of developing the private sector had been emphasized often and could be related to poverty-reduction policies.  The role of international trade was important for growth, development and the fight against poverty and, for that reason, the success of the Doha round was essential.

    There was a need for more ODA if the Millennium Development Goals were to be achieved, he said.  Recent progress should be emphasized and the recent example set by the European Union should encourage those countries that had not yet reached the 0.7 per cent target figure to set a timetable for doing so.  Regarding rapid progress in terms of innovative financing resources, within a year some proposals had reached the stage where they could be presented to the United Nations, and it was gratifying that beyond the International Finance Facility, a tax on airline tickets had been specifically proposed.

    The importance of developing a regional approach had been brought up many times during the Dialogue, he said.  Significant progress had been made regarding debt, and the recent G-8 proposal to eliminate the debt of Heavily Indebted Poor Countries was gratifying.  It had been highlighted, however, that there would be a need to extend that measure to other countries and to compensate financial lending institutions.  Some middle-income countries would also need new measures to deal with their debt.  There had also been calls to increase the voice of developing countries in the decision-making and norm-setting processes of international financial institutions.

    He said that the principles of Monterrey required greater cooperation in order to better promote and finance development.  Those principles called for greater coherence among States in trade, aid policies and financial decisions.  From that angle, the need for the participation of developing countries in decision-making had been recalled as had the need to reform the United Nations, as well as the working methods of the Economic and Social Council.  By the Monterrey principles, States were responsible not just to their own peoples, but also to each other.

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