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ICDA's UN Financing for Development Brief
By Monika Adamova
ICDA Secretariat, Brussels
18 March, 2002

Will take place in Monterrey (Mexico) from 18th March till 22nd March 2002

Governments, international financial institutions, business sector and NGOs will meet to decide upon the strategies on how to reach the internationally agreed development goals as set by the UN Millennium Declaration i.e. the overreaching goal of reducing poverty by half by 2015. The results of this meeting will be very important for the upcoming World Summit on Sustainable Development in Johannesburg.

The Monterrey Consensus

Preparatory Committee (PrepCom) agreed on a final outcome for the International FfD Conference, producing a clean text prior to of the conference, which is of a rare occurrence. Most parts of the agreement were prepared in a series of meetings between the different "stakeholders". A majority of NGOs were disappointed with the content of the text, complaining that the very comprehensive agenda has already been watered down. Hopeful proposals to introduce progressive taxes, such as the Tobin Tax and eco-taxes, have been removed from the agenda, as well as constructive plans to relief the debts of the poorest countries. Another problem is that the "consensus" is staying away from institutional reforms, which are needed to clarify the balance of power between the different global institutions, especially the UN and the WTO. Most governments support the target of 0.7% of GNP as ODA to developing countries. Although it seems as a positive move, this target has been suggested for more the 30 years, while most of the countries reduced their ODA budgets during the past 10 years.

Agenda - six key areas have been identified for discussion and decision:

1. Mobilising Domestic Resources for Development
The majority of a country's development capital comes from within its own borders. Effective legal institutions, system of taxation, public administration, and financial infrastructure are necessary for public and private funds to be mobilised and deployed efficiently so as to improve economic and social development.

2. Mobilising International Financial Resources
In addition to domestic resources, majority of developing countries need to obtain foreign capital to meet key investment needs. Increasingly this means to attract private finance from abroad, i.e. FDI, portfolio investments and bank loans. A main challenge is to increase the magnitude and the reach of these flows, while at the same time containing their volatility.

3. Trade
Earnings from trade are most important channels for promoting economic growth and eradicating poverty. However, the continued rapid expansion of trade is not guaranteed and many developing countries have so far received only meagre benefits from opening up their economies.

4. ODA (Official Development Assistance)
ODA has entered into a long-term decline but remains essential for the development of many low-income countries. Additional assistance is also necessary if the world is to realise its commitment to the Millennium Summit goals of poverty reduction and human development.

5. External Debt
Significant relief has been extended through the HIPC initiative but heavy debt burdens continue to slow down development in many developing countries. While seeking to solve present debt problems, more has to be done to prevent developing countries from falling into the debt trap.

6. Systemic Issues
One of the main issues is the reform of the international financial institutions. Some improvements have been made but more are needed. One challenge is to find ways to strengthen developing countries' participation in the international economic process. The other is to increase coherence among the key institutions in the areas of international finance, money, trade and development. In this regard the UN should be able to play a more effective role in the international economic arena.

Innovations to engaged the NGOs
NGOs participated extensively in the FfD process. They have been invited to take the floor during informal sessions of the Preparatory Committee (PrepCom) and comment on the draft outcome text. NGOs will also participate extensively in the formal process during the Conference in Monterrey, as participants in the 8 Ministerial and 4 Head of State Roundtables scheduled for the Conference. Each roundtable will have 70 participants including 48 government representatives, 4 institutional stakeholders, 7 business sector representatives and 7 from Civil Society. NGOs decided that the International Support Committee of the NGO Forum would take the lead in this regard. NGOs agreed that the following selection criteria were crucial: Regional representation, gender balance, diverse coverage of all issues on the FfD agenda and prior to involvement in the FfD process.

An unprecedented feature of the FfD process
An unprecedented feature of the Financing for Development process is the active participation of The World Bank, the IMF, and the WTO in a UN-led process. Also involved in the Conference and their preparations are the UNCTAD, the UNDP and the five regional commissions and other UN system agencies, as well as representatives of civil society and the business sector. [ENDS]

This article was based on articles from the UN's Official Website on FfD, "Go Between", the United Nations Non-Governmental Liaison Service (NGLS) publication --n#89-December 2001-January 2002; Draft text of the official Monterrey Consensus; Roots Magazine (produced by Netherlands-based NGO ASEED; "The Zedillo Report and NGO Advocacy Positions on FfD" that featured in ICDA's WTO Impact List of WTOIL September ( ffdngocaucus@yahoogroups.com

Back to ICDA's UN FfD Page

Key Themes

  1. Trade
  2. Debt
  3. ODA
  4. Systemic Issues
  5. Domestic sources
  6. Private Flows
Top 5 ODA Donors (2000)

  • Denmark (1.06%)
  • Netherlands (0.82%)
  • Sweden (0.81%)
  • Norway (0.8%)
  • Luxembourg (0.7%)

  • Worst 5 ODA Donors
  • USA (0.1%)
  • Italy (0.13%)
  • Greece (0.19%)
  • Spain (0.24%)
  • Austria (0.25%)
  • ICDA Updates on FfD

    >> ICDA's UN FfD Briefing

  • 14 March Interactive Teleconference of UN Ffd @ UN Information center in Brussels
  • NGO Concerns for FfD
  • (to be posted)

    Useful Links

  • Official UN FfD Page
  • Tobin Tax Page (UK)

  • WEED/Terres des Hommes Paper on Tobin Tax
  • Center for Economic Policy & Research Page on Tobin Tax
  • US-based NGO Center of Concern's page on FfD
  • US-based NGO Interaction Page outlining details for a roundtable entitled "Overseas Development Assistance: The Key to Global Security" on 20 March

  • Last Updated: Monday 18 March 2002 @ 1:04pm CET
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