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Monterrey Conference:
Best Chance To Unlock Desperately Needed Financial Resources

Kofi Annan
Fourth Session of the Preparatory Committee for the International Conference on Financing for Development. January 14, 2002

The Monterrey Conference offers us the best chance we had, for many years, to unlock the financial resources that are so desperately needed for development. If we are to seize that chance, we must focus very sharply, in the few weeks remaining to us, on how best to achieve tangible results.

The Conference agenda is substantial and balanced - the fruit of very careful negotiations. The Conference itself must produce tangible results under all the main headings on that agenda, whether of a national or international or systemic nature.

What results would make it a success?

First, it must strengthen and sharpen the consensus that now exists on the policies, mechanisms and institutional frameworks which are required, within the developing countries, to mobilize domestic resources, as well as to attract and benefit from international private capital flows - and particularly from foreign direct investment. Agreement to conclude a comprehensive international convention against corruption - providing, for example, for the repatriation of illegally transferred funds -- would also be a major step forward.

Secondly, Monterrey must build on the momentum achieved in Doha with the promise of a new development round of trade negotiations. In particular, the Conference should pay attention to areas that will not be covered in those negotiations, but are of vital importance to developing countries - such as commodity prices.

Thirdly, Monterrey must mark a turning point in the history of official development assistance (ODA). We simply cannot allow the decline of ODA to continue, if we want our commitment to the Millennium Development Goals to be taken seriously at all. The Zedillo Panel calculated that, to reach those Goals by 2015, we need another $50 billion of official development assistance per year -- and the World Bank has come up with very similar figures. That means doubling the present figure of ODA - which may sound ambitious, but would still leave us well short of the recognized goal of 0.7 per cent of gross national product for the donor countries. Why don’t we take that extra $50 billion as an immediate, short-term target, to be announced at Monterrey and achieved within two to three years? It is certainly achievable, if all those who have not yet reached 0.7 per cent make a new, and real, effort.

Fourthly, we need a clear commitment from creditor countries to implement the Highly Indebted Poor Countries initiative fully and promptly, and indeed to go beyond the present terms of that initiative so as to ensure that from now on the debts are really sustainable. But, we also need to explore new ways of dealing with the debts of middle-income countries. We must do everything we can to prevent the tragic experience of Argentina from being repeated elsewhere. There is an emerging consensus that existing methods for resolving sovereign debt crises are unsatisfactory, and that we need to find ways of ensuring that the burden is more equitably shared between the debtor country and its creditors. I hope that, at Monterrey, governments will give the political impulse needed to speed the development of such a new approach.

Fifth, there is a real need for the developing countries to have a bigger say, when the management of the global economy is being discussed. I think everyone now recognizes this. The Conference must come up with practical ways to achieve it.

And finally, the Conference must agree on effective follow-up mechanisms, to make sure that whatever it decides is actually done. These mechanisms should build on what has been achieved in the preparatory process, in which the United Nations has been the center of a strong coalition, bringing together, as we heard, all those who had a part to play - different ministries in both donor and developing countries, the private sector, civil society organizations, the Bretton Woods institutions and the World Trade Organization. We are working in an unprecedented spirit of cooperation. It has also thrown up some very promising ideas. It is a partnership we need for the future.

I believe we can achieve results on all these issues, but only if we succeed in focusing attention on them at the highest political levels during the weeks ahead. That is why I have asked two men of unrivalled experience in the field - the South African finance minister, Trevor Manuel, and the former Managing Director of the International Monetary Fund, Michel Camdessus - to serve as my special envoys and help rally support. I am delighted that they have both agreed to do so and they are both here with us today.

If we succeed, I believe this Conference really can help developing countries take advantage of the global market, and thereby make a real difference in the lives of poor people all over the world. And that is what it must do, if the Millennium Development Goals that our leaders agreed to in September 2000 are to be more than wishful thinking.

In that spirit, I wish you all success in your deliberations.

March 18, 2002

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