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TWN Info Service on WTO Issues (Nov03/4)

5 November 2003

Third World Network

Dear friends and colleagues,

STRONGER UN MANDATE AND CAPACITY NEEDED FOR FINANCING FOR DEVELOPMENT PROCESS

At the end of the Financing for Development Dialogue at the United Nations in New York, the President of the UN General Assembly presented his Chairman’s Conclusions.

Below is a report of these Conclusions.  It also provides an analysis of the 3-day series of FFD events, pointing out the weak mandate and capacity for the UN in this follow up to the Monterrey Conference, and the need to strengthen this UN mandate.

Two previous reports on the FFD meetings can be found at the

TWN website at www.twnside.org.sg

 

With best wishes

Martin Khor

TWN

 

 

Stronger UN mandate and capacity needed for FfD process

TWN Report and Analysis by Martin Khor, New York, 1 November 2003

The ministerial-level dialogue on finance for development ended on 30 October night with an official General Assembly plenary session in which the Assembly President, Julian Robert Hunte (Foreign Minister of Saint Lucia ) presented his Chairman’s Conclusions of the Dialogue.

The two-day Dialogue (and the one-day hearings preceding it) was a useful forum for exchange of views.  But it was hardly sufficient for satisfying either the limited need for review and monitoring of the Monterrey Conference’s commitments, nor the larger task of acting on the world’s finance and development problems.

The limited role of the Dialogue had been set by the Monterrey Consensus itself.  Some major developed countries had been adamant that there would only be a small follow-up process after Monterrey.

Thus, the only follow-up mechanisms are the biannual two-day Dialogue, a one-day annual ECOSOC Spring meeting with the international financial institutions and the WTO, interactions and “hearings” with civil society and business groups, and a small unit within the UN Secretariat to organize the process.

Yet the proceedings of the Dialogue revealed that many governments, and certainly the NGOs, are eager to move the process to a higher plane, so that actions by the UN can begin to keep pace with (let alone deal with) the multifold and increasing problems of finance and development.

The Chairman’s Conclusions, which are meant to summarise the discussions undertaken at the Dialogue, captured some of this impatience with the lack of capacity and the need to upgrade the UN’s mandate and capacity.

The Conclusions highlighted the general consensus that more needed to be accomplished on financing for development, notably with respect to recent adverse developments in international trade and in financial transfers.

The General Assembly President said that many delegations had called for a mechanism to review and monitor the implementation of the Monterrey Consensus, and especially also on goal 8 of the Millennium Development Goals (that deals with global partnership for development). Developed and developing countries should report on their actions to implement the Monterrey Consensus, under the mechanism.

He said that the central issue is political will.  Many speakers had called for measures to mobilize political will to implement the Consensus.  Many had also called for an increase in resources.

There was, he said, concern that trade negotiations in the WTO should resume as soon as possible towards an effective developmental conclusion.  Governments had voiced concerns about protectionist measures such as abuse of anti-dumping measures.

Concerns had also been expressed about commodity markets and the vulnerability of farmers to price volatility.  He said the United Nations must take up the commodity issue seriously.  One proposal was to adjust the level of ODA to counter the cyclical movement of commodity prices.  Another is to provide guaranteed minimum levels for commodity prices.

Hunte said the relation between the WTO and the UN should be strengthened.  It was also important to increase the level of aid.

He added that speakers were disappointed at how slow the HIPC initiative was to deliver debt relief and there were questions about its effectiveness. Some creditor countries agreed to review the topping up of debt relief when the affected countries had finished their programmes and yet had attained little relief.

It was felt that the UN can consider establishing an informal study group or an international arbitration group under the UN to deal with the debt issue.

Some speakers had highlighted remittances as an important source of financing.

There were also calls for new and innovative financing for development.

There was a need to strengthen international cooperation on tax matters.  One suggestion was to upgrade the ad hoc group on tax matters.

Democratic structures at domestic level need to be strengthened, for tasks such as fighting corruption, to be undertaken.

Hunte added that there was a need to strengthen democratic forces at the global level.  Developing countries should have increased participation in decision-making in the international financial institutions.

Several countries were also concerned with the need to reform and strengthen ECOSOC.  The UN through ECOSOC should be strengthened for undertaking coordination of macro-economic issues at global level.  ECOSOC should also be strengthened for dealing with social and economic affairs and for Financing for Development.

Proposals included the expansion of the bureau of ECOSOC, or the creation of an economic and social security council, or establishing an inter-governmental body to prepare for the dialogue of ECOSOC with the international financial institutions and the WTO, at the Spring meetings.

There were also proposals to form, under the FfD umbrella, various informal, multi-stakeholder working groups to address specific issues.

Speakers from developing countries also discussed the need for South-South financial cooperation.

Hunte called on governments and multilateral organizations , as well as civil society and the private sector,  to act on and implement the ideas and proposals put forward in the last two days.

The next steps in the FFD process is that Hunte will present his final Chairman’s Conclusions to the Second Committee of the General Assembly.  There would then be a process of about three to five weeks for the formulation of a Resolution on Financing for Development, which would have to be finalized before December 15 when the current session of the General Assembly concludes.

The General Assembly’s three-day High-Level Dialogue had been organized in follow-up to the 2002 International Conference on Financing for Development, whose main outcome was a policy framework, known as the Monterrey Consensus.

The Dialogue marked the beginning of a biennial process meant to conduct assessment and forward planning towards implementation of the Monterrey Consensus.

The Dialogue had included hearings of civil society and business, official plenary speeches; roundtables involving Ministers, agencies, NGOs and business; and experts and agencies and an interactive informal plenary.

It would appear that the FfD follow-up process has come to be the main focal point in the UN system for dealing with finance and development issues at the inter-governmental level.

Yet the Dialogue of the past week had shown how fragile this process still is.  Besides this three-day event, which is scheduled to take place only once in two years, there is only the annual one-day “Spring event” in which IMF, World Bank and WTO officials are invited to a dialogue with UN members at the ECOSOC.

The Dialogue itself was useful as a forum for exchange of views on the current finance and development situation.  But it lacked the capacity to undertake a serious review of implementation of commitments of the developed countries and the international agencies, nor of the developing countries.

The documentation for the Dialogue was also sparse, comprising mainly of a single document, the 47-page report of the Secretary-General on implementation and follow up of the Monterrey Conference.  Within this report are several topics (mobilizing domestic and international resources, trade, cooperation for development, external debt, systemic issues and staying engaged).

The compact report may be of a suitable size for a two or three day dialogue, but is inadequate for dealing in-depth with such a range of key issues.

The FfD unit in the UN Secretariat’s Department of Economic and Social Affairs is also very small and staffed mainly by staff on an annual contract basis. It  needs greater capacity and stability, if it is to expand its role to pursue a review and monitoring task, as proposed by many delegations at the Dialogue.

At the inter-governmental level, the Monterrey Conference follow up process is yet to find a more stable and permanent home, as it now only comprises an annual Spring one-day dialogue at ECOSOC and a biannual two-day High-Level Dialogue under the General Assembly.

From this present status of “dialogues”, the follow-up process should be upgraded to a more permanent level, to a Committee, Working Group or Commission of ECOSOC. At the least, the proposal in the Secretary General’s Report of establishing a committee or bureau to deal with preparations for the annual spring meeting with the World bank, IMF, WTO and UNCTAD and other follow-up aspects, should be agreed to.

The Secretary General’s report says that such a body could be designated an executive or steering committee and could match the size of the Bureau of the preparatory committee for the Monterrey Conference, and with geographically balanced representation. The report had also proposed setting up “informal study groups” on selected policy issues, comprising representatives of governments, international agencies, civil society, business and academia.

These two proposals, of a bureau and study groups, had been referred to by some delegations during the Dialogue and were also included in the Chairman’s concluding statement.

They could be parts of an incremental approach to strengthening the Monterrey Conference follow-up, which some major developed-country governments had deliberately ensured would start with a very weak capacity at the Conference itself.

In the longer run, the UN members would have to take more systemic measures to strengthen the organisation’s role in finance and development.

The term “coherence” was one of the buzzwords during the Dialogue.  Several participants proposed the strengthening of the role of ECOSOC in being the focal point and forum for coordination and coherence of finance, trade and development policies at international level.

Last week’s FfD Dialogue was useful in bringing various parties together for an interesting discussion, especially given the limitations for the follow-up process set by the Monterrey Consensus itself. Much more needs to be done, including expanding the follow-up mandate, if the follow-up process is to become meaningful beyond the exchange of views, and towards review and monitoring of implementation of Monterrey commitments, and beyond that, to review and action on global economic problems.

 


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