Financing for Development

Source: Social Watch
The second Forum on Cooperation for Development held 29-30 June at the UN headquarters in New York, reviewed the Official Development Assistance (ODA) agenda. The main conclusions focused on aid effectiveness to achieve the Millennium Development Goals (MDGs), and the need to reconsider the financial paradigm and incorporate new forms of cooperation. [see more]
The Financing for Development (FfD) process, led by the United Nations (UN), was launched within the context of the Asian crisis in the 1990s. In 1997-1998, the UN General Assembly agreed to convene an International Conference on Financing for Development which was finally held in March 2002 in Monterrey, Mexico.

The Conference was characterised by the active participation of the World Bank (WB), the International Monetary Fund (IMF) and the World Trade Organisation (WTO). The United Nations Conference on Trade and Development (UNCTD), the United Nations Development Programme (UNDP), the five regional commissions and other bodies within the UN system, as well as representatives of civil society and the private sector also participated in the Conference and its preparatory process.

Monterrey encompassed a significant variety of financing for development-related issues that are of concern to civil society, such as debt relief and financial crises, the Official Development Assistance (ODA), foreign direct investment and the relationship between international trade and development. It also included systemic issues such as the governance of international financial institutions and the representation and relative power enjoyed by developing countries in those institutions.

The Conference was carried out on the basis of a clear aim: to halve world poverty by 2015, as set forth in the Millennium Development Goals (MDGs) approved in the Millennium Summit (September 2000). The then UN Secretary-General, Kofi Annan, said that without progress in the area of financial resources towards poor countries, the goals universally agreed to by the 147 Heads of State and 191 nations taking part in that Summit were in jeopardy.

The formal outcome of the Conference was the “Monterrey Consensus”, implicitly supported by the fifty Heads of State that participated in the event. Developing countries committed themselves to introduce sound economic and social policies, improve governance, eradicate corruption and create a domestic regulatory environment aimed at the development of the private business sector. On the other hand, industrialised countries pledged to take measures to provide the financial resources that might be required, in addition to the mobilisation of domestic resources in developing countries, to meet the MDGs.

These measures included a pledge to strive to provide official development assistance equal to at least 0.7% of each developed country’s gross domestic product; to improve market access for developing country exports; to complete the development dimension of the Doha round of the WTO; to provide debt relief in order to prevent debt service from becoming an obstacle to development; to facilitate the impact of foreign direct investment on development through greater technology transfer; and to improve the international financial architecture in order to predict and prevent financial crises.

Multilateral development agencies, for their part, celebrated the end of “aid fatigue” and welcomed the announcement made by the European Union and the United States regarding the increase of their development cooperation budgets. However, in spite of the increase in ODA, it still falls far short of the amount required to achieve the MDGs.

Weaknesses, limitations and opportunities

Civil society organisations gathered at the Global Social Forum – parallel to the Monterrey Conference – with the participation of thousands of representatives, criticised the outcome of the Conference, claiming it endorsed “neo-liberal” economic policies and made no progress in “systemic issues”. Although it was acknowledged that the Conference represented an unprecedented effort to build a consensus among multiple stakeholders, it was also stated that the Monterrey Consensus was not a finished product but rather a point of departure. And that the credibility of the follow-up process would depend on its ability to overcome the rhetoric of the Consensus with specific proposals that would make the availability of development resources effective.

According to John Foster, researcher at the North-South Institute in Canada, who has followed the UN’s FfD process since 2000, this process “has obvious weaknesses and limitations. However it offers opportunities for engagement which are not present elsewhere, particularly for those who are concerned with governance, democracy and transparency, with how the different parts of the system work either for or against development. It can also be a forum in which new proposals are put forward and support built.”

A major weakness of the Monterrey Consensus is that it has a very weak follow-up mechanism, due largely to the extreme reluctance of some large developed countries to give a high profile to finance work at the UN. The follow-up currently comprises a one annual dialogue session between UN members and the secretariat heads of the IMF, World Bank and WTO; and a three-day High-level Dialogue on FfD every two years.

Since 2002, an outstanding change has been noticed in terms of the discourse on FfD and the international architecture of development cooperation. For instance, the Paris Ministerial Conference on Innovative Development Financing Mechanisms – convened by French President Jacques Chirac in February 2006 – saw progress on issues such as ODA, the levies on international transactions and air tickets, and the search for additional funds for health care and, specifically, the struggle against HIV/AIDS.

A new world conference on FfD took place from 29 November to 2 December 2008 in Doha (Qatar), aiming at reviewing the implementation of Monterrey’s decisions and determining the new initiatives needed in order to meet the increasingly compromised MDGs. All of the topics addressed in Monterrey were revisited, but in the end little substantive progress was made. On the positive side, the Doha declaration preserved all the commitments made in Monterrey regarding the mechanisms necessary to reach the millennium development goals, and the pledging of 0.7% of developed countries’ Gross Domestic Product destined towards official development aid. The text also explicitly recognizes that the promotion of gender equality and women´s economic empowerment is essential in achieving equitable development.

The most concrete outcome of the Doha summit was the convening of another UN summit, in which the “G-192” (all of the member States of the UN) will meet to discuss solutions to the financial crisis and propose changes to the international financial architecture. That conference is scheduled to take place in 1-3 June 2009 in the UN Headquarters in New York.
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Monday, September 06 2010
Forum on Cooperation for Development: we need new aid delivery mechanisms
(Source: Social Watch)
Tuesday, April 13 2010
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(Source: Huairou Commission)

Financing for development process in the United Nations

United Nations Development Programme (UNDP)

United Nations Conference on Trade and Development (UNCTAD)

United Nations Capital Development Fund (UNCDF)

International Fund for Agricultural Development (IFAD)

World Economic and Social Survey (United Nations)

Follow-up process to the International Conference on Financing for Development (United Nations)

International Conference on Financing for Development – Monterrey 2002

Eldis Aid Quality Guide (ELDIS)

The Monterrey Conference: long on intentions (Network IDEAs)

The Monterrey Consensus (United Nations)

Multilateral development institutions

Civil society information resources

We want your feedback, as long as you speak English (Aid Watch)

Impact for what? - Cairo Conference on Impact Evaluation (CIVICUS)

Southern perspectives on reform of the international development architecture (North-South Institute)

The changing face of global development finance (Halifax Initiative Coalition)

Influencing international aid policy (Forum on the Future of Aid)

Whither EC Aid? (ActionAid - ECDPM)

Civil society perspectives on the Paris Declaration and aid effectiveness (INTRAC)

Gone offshore (Inter Pares)

Global Policy Forum

Social Watch Report 2006: Impossible Architecture (Social Watch)

Eldis Finance Policy Resource Guide

IFIwatchnet

Thinking Globaly: Why is FFD important to US groups? (Urban Justice Center)

The global financial and economic crisis (Third World Network)

South Bulletin 32 (South Centre)

Social Watch

Globalization and development

Forum on Cooperation for Development: we need new aid delivery mechanisms (Social Watch)

How the bailouts dwarf other global crisis spending (Institute for Policy Studies)

The finance and trade Nexus: systemic challenges (Third World Network)

The persistent confusion between growth and development (Americas Program - Center for International Policy (CIP))

The precarious state of public finance (Global Policy Forum)

Trade and development (Choike)

New financial architecture as a global public good (UNDP)

Official Development Assistance (ODA)

The Least Developed Countries Report 2008 (UNCTAD)

Scaling up: aid fragmentation, aid allocation and aid predictability (OECD Development Assistance Committee)

Security, the war on terror, and Official Development Assistance (North-South Institute)

The myth of western aid (D+C)

OECD Journal on Development: Development Co-operation Report 2007 (Organisation for Economic Co-operation and Development (OECD))

Asian models for aid: is there a non-western approach to development assistance? (Chr. Michelsen Institute)

Deceptive development cooperation

Should we dump the North-South lens? (The Drum Beat)

Financing for development in the Arab region: a case of a region at crossroads (Arab NGO Network for Development)

Africa does not need more Western philanthropy (ZNet)

Hold the applause! EU governments risk breaking aid promises (Eurodad)

Financing development: time for a new approach? (id21)

Overcoming the crisis of ODA (UNA-Denmark)

Why development aid is not the same as poverty reduction (WWF International)

Rich nations broke aid pledge (Third World Network - IPS)

Innovative mechanisms

Solidarity and globalisation: Paris Ministerial Conference on innovative development financing mechanisms (North-South Institute)

Assessing the role of financial transaction taxes in financing for development (UN-NGLS)

One step forward (Social Watch)

Innovative Financing for Development (Nueva Sociedad)

The Currency Transaction Tax: a bold idea for financing development (North-South Institute)

The Currency Transaction Tax: rate and revenue estimates (North-South Institute)

Taxing Currency Transactions for Development (UNA-Denmark)

Building on the Monterrey Consensus: the growing role of public-private partnerships in mobilising resources for develop (World Economic Forum)

The Millennium Development Goals

Are the MDGs priority in development strategies and aid programmes? Only few are! (UNDP International Poverty Centre)

Choike in-depth report (Choike)

Finding the money to eliminate world poverty (International Development Committee (IDC), UK)

Follow-up to Monterrey

Follow-up International Conference on Financing for Development - Doha 2008 (Choike)

Trade – finance linkages as a cross-cutting issue in the Doha FfD review (International Gender and Trade Network)

Financing for Development: The Abuja Commitment to Action

Chronicle of an announced failure and challenges for post-Monterrey (Third World Network Africa)

Report on UN Financing for Development Interactive Dialogue (Third World Network)

Stronger UN mandate and capacity needed for FfD process (Third World Network)

FFD Multi-stakeholder Consultations on Systemic Issues 2004-2005 (New Rules for Global Finance)

Other multilateral institutions

Organisation for Economic Co-operation and Development (OECD)

Andean Development Corporation (CAF)

The OPEC Fund for International Development (OFID)

Civil society statements

Statement by the Doha NGO group on financing for development (Blog Choike)

Civil society perspectives on the financing for development agenda (Social Watch)

Civil society calls for better democratic ownership in aid policies (Choike)

Challenges of the current aid architecture: addressing the development needs of Africa (AFRODAD)

Increasing international financial and technical cooperation for development (AFRODAD)

Domestic and global policy linkages for enhancing the role of Middle Income Countries in financing for development (DAWN)

NGOs call on EU to keep ODA promises (Development Through Dialogue)

NGO statement on Financing for Development (Choike)

Financing for development and gender

Where are the women in Haiti's reconstruction? (Huairou Commission)

Financing for Development and Women Rights: a critical review (WIDE)

Bridging the gap: financing gender equality (UN-NGLS)

Financing gender equality (Terra Viva)

Women's Forum in Accra issues recommendations for action on development effectiveness (Better Aid)

Women warn states on use of positive conditionalities in development cooperation (DAWN)

Women’s Consultation on Financing for Development (Women's Working Group on the FfD)

Implementing the Paris Declaration: implications for the promotion of women’s rights and gender equality (AWID)

Aid effectiveness and women's rights (Association for Women's Rights in Development - AWID)

Financing for Gender Equality

Civil society and the new aid modalities: addressing the challenges for gender (DAW - IGTN Caribbean)

Gender and FfD (INSTRAW)

The Paris Declaration on Aid Effectiveness

Paris Declaration on Aid Effectiveness (OECD)

Aid effectiveness: a progress report on implementing the Paris Declaration (Organisation for Economic Co-operation and Development)

The Paris Declaration: how CSO transparency and information can increase democratic ownership and accountability (GuideStar International)

The applicability of the Paris Declaration in fragile and conflict-affected situations (IDL Group)

Implementing Paris and Accra: Towards a regional agenda in Latin America and the Caribbean (FRIDE)

The Paris Declaration and the Right to Development (IFIwatchnet)

Evaluation of the implementation of the Paris Declaration (Ministry of Foreign Affairs of Denmark)

Ownership with adjectives (FRIDE)

Southern discomfort (D+C)

Accountability in aid effectiveness (AFRODAD)

The Paris Declaration and aid effectiveness (Pambazuka)

Paris Declaration undermines policy space through aid (Third World Network)

Fostering democratic ownership – towards greater impact on poverty (Alliance2015)

Turning the tables: aid and accountability under the Paris framework (European Network on Debt and Development)

Ownership and foreign aid in Latin America (Future of Aid)

The road to Accra: Paris Declaration on Aid Effectiveness (CIVICUS)

2006 survey on monitoring the Paris Declaration: country chapters (Organisation of Economic Cooperation and Development (OECD))

Accountability and aid effectiveness (AFRODAD)

From Paris 2005 to Accra 2008: will aid become more accountable and effective? (Better Aid)

The road to Doha

Follow-up International Conference on Financing for Development - Doha 2008 (Choike)

Upholding the spirit of Monterrey - A CIDSE Policy Paper (CIDSE)

The Road to Doha (Observatorio Económico de América Latina - OBELA)

Civil society benchmarks for the Doha preparatory process on Financing for Development (International Gender and Trade Network)

Financing for Development from Monterrey to Doha (South Centre)

Good intentions aren't enough (Latindadd)

To Doha and Beyond - "Changing Face of Global Development Finance" (North-South Institute)

Can the Doha Review Conference make trade an engine for development? (The Road to Doha)

Debt in Doha: What should be on the agenda? (NGLS)

The Road to Doha (NGLS)

Preparations for the Follow-up International Conference on Financing for Development (United Nations)

The High-Level Dialogue on Financing for Development: setting the stage for the review of the 2002 "Monterrey Consensus" (WIDE)

Financing for development: from Monterrey to Doha (Social Watch)


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