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ECOSOC 1997 Debate on New & Innovative Ideas for Funds ECOSOC 1997 Debate on New & Innovative Ideas for Funds
23-24 July 1997
Text of UN Press Releases
23 July, afternoon sessionMr. Sarbuland Khan, Officer-in-Charge, Division for Policy Coordination and Economic and Social Council Affairs, introducing a report of the Secretary-General on "new and innovative ideas for generating funds for globally agreed commitments and priorities" (E/1997/85), said the report had been prepared in close collaboration with the UNDP and was based on the premise that the funds so generated should neither be viewed as a source for financing the regular nor the peacekeeping budgets of the United Nations. The report confined itself to proposals considered viable and feasible, of which two main areas had been identified: public-private partnerships in mobilizing finance for achieving development objectives; and national charges and fees drawing particularly upon national experiences in the past few years in the area of environmental protection. Specific recommendations for consideration by the Council were provided for both areas, and the document recommended a course of action: that these ideas should be pursued in the context of the work of the relevant functional commissions where mobilization of resources could be related to specific programmes and goals as a key element of the strategy for the implementation of the outcomes of the United Nations conferences. Expert bodies should examine these issues in greater depth.
Arman Aardal (Norway) said the late appearance of the report on new funding ideas had made a thorough discussion difficult, and the scarcity of replies to the issues raised did not provide enough basis for drawing such categorical conclusions as appeared in paragraph 10 of the report. Norway also felt other options had not been considered sufficiently. In March in Stockholm a seminar had been held on "A New Paradigm of Financing Development and Cooperation", which had concluded that private finance for such activities was not a contradiction in terms. Any funds raised by new ideas should be used to strengthen UN activities in the field and should be additional to official development assistance and not used for core purposes -- they should aim at specific purposes. Taxes designed to shift unsustainable consumption patterns to sustainable ones could very clearly have sustainable development dividend components, and could include taxes on aviation fuel, international air tickets, use of credit cards, use of non-renewable energy, use of international telecommunications, and international financial transactions. Further exploration of these possibilities was deserved.
Mr. Winnick (United States) said the delegation agreed with the underlying premises in the Secretary-General's report on innovative ideas for generating funds. In particular, the idea of the private sector as the primary source of financing for development was key. The idea of micro-credit mechanisms had considerable potential for development as well.
Sylvie Schosseler (Luxembourg), speaking on behalf of the European Union, said the paper on new or innovative funding ideas had been published too late for serious discussion. The European Union had already notified the organization of some ideas; it also had already indicated that such funds should be kept clearly separate from core funding and from standards United Nations programmes. The private sector's potential and the question of environmental protection received some attention in the document, but unfortunately a limited number of countries had provided their views on the matter before the report was printed.
Mr. Mchumo (United Republic of Tanzania), on behalf of the Group of 77 and China, said recent United Nations conferences and summits had arrived at a broad understanding of international goals and commitments to foster development in the developing world. However, it was becoming increasingly clear that those commitments and goals were being ignored. For instance, official development assistance had declined sharply, and was being directed to humanitarian emergencies rather than to development. The Group of 77 understood the theories behind suggestions to address these problems, but had some concerns nevertheless. The report of the Secretary-General was proposing innovative ideas for generating funds from the marketplace; however, developing countries believed that the emphasis on development had to remain on official development assistance and innovative ideas for generating funds could only compliment that.
Others who spoke were: the Russian Federatioin, Malta, the World Bank, Mexico, Canada, Australia, the and the International Monetary Fund
24 July, morning session
The Council continued to examine a report from the Secretary-General on new and innovative ideas for generating funds for development (document A/52/203-E/1997/85). The report stresses that the funds generated by new and innovative ideas should neither be viewed as a substitute for official development assistance nor as a source for financing of the regular and peacekeeping budgets of the United Nations. In addition, the present report does not address the financing of operational activities of the United Nations development system.
Among the options envisaged to generate funds, the Secretary-General lists collateralized bond obligations, tradeable emission permits and debt for nature swaps.
Statements Syed Rafiqul Alom (Bangladesh) said the Secretary General's report on innovative ideas for generating funds was in itself innovative; the potential of those new ideas had to be systematically addressed because of their importance. However, those ideas must not be a substitute for official development assistance or bilateral and multilateral aid. Bangladesh accepted that parts of funding had to come from sources other than governments. Other possible new ideas for raising revenue were using funds raised by the United Nations post office, establishment of a United Nations lottery and a United Nations credit card.
H.O. Van Der Westhuizen (South Africa) said it was not only new and innovative ideas for financing of development that required exploration but existing mechanisms as well; time was needed to study all these in detail and choose the most valuable ideas. South Africa wished to point out, however, that the proposed option of using profits from IMF gold sales for development assistance must be considered in such a way that it was without prejudice to gold-producing developing countries and that there would also have to be an undertaking to provide support for those developing countries which might experience balance-of-payment problems as a result of such sales. The delegation stressed that there needed to be an understanding of the problems that could be caused by this option.
Bai Yongjie (China) said it was important that adequate financial resources were raised to increase international cooperation and implement the goals of global conferences. The new financing mechanisms should tap new funding resources in addition to traditional official development assistance; the reduction of such assistance ran counter to the commitments undertaken at global conferences. It was very important that the private sector was brought into the new financing mechanism. What was of concern was how much of that private revenue could be channelled to international development cooperation.
Noriko Suzuki (Japan) said enhancement of national capacities for development should be the basis of any strategy for improving financing of development, and it was important to underline the continued importance of official development assistance in the field. There were several interesting ideas and recommendations in the relevant report, but it was necessary to examine the various political and legal frameworks involved more thoroughly before taking any action. Global development priorities should be dealt with as priority issues within the mandates of funds and programmes, and further efforts should be made to increase financing through greater efficiency and coordination.
Libran N. Cabactulan (Philippines) said the Council had asked Secretary-General for a report on new and innovative ideas to generate funds and to study their feasibility and cost. That was a tall order, and the Secretary-General's report was short and concise. Philippines agreed with the principal thrust of most of the ideas in the report, even the trade permits suggested. It was important for development to have required resources; the international community should continue to look for new ideas to generate funds, which should not be an excuse for countries not to provide official development assistance.
Dewi Savitri Wahab (Indonesia) said the possible options for new and innovative funds for financing development were interesting; it was a matter of great concern, after all, that there had been an alarming decrease in official development assistance, which was at its lowest point in 20 years, with bleak prospects for the future. Something had to be done to help developing countries meet the goals of recent world conferences. Extensive discussion of these and other matters, including innovative ideas, was needed within the United Nations system. It also should be emphasized that any new sources could not substitute for ODA. Perhaps a pilot project should be carried out on some of the funding ideas.
Shukri Ibrahim (Malaysia) said the delegation took note of the new and innovative ideas suggested by the Secretary-General to carry out globally agreed commitments and priorities. Although private capital sought money-making projects and low risks, it could still play a role in development; it was up to national governments to encourage it. In Malaysia, the private sector was the engine of growth; the country believed the private sector had to be brought to the mainstream of all national development. However, any new ideas in this area should not result in additional financial burdens for developing countries. New sources of funding should not be a replacement for official development assistance.
Hazel Tamano (International Youth and Student Movement for the United Nations), speaking on behalf of several other non-governmental organizations (NGOs), said that innovative finance must not be an excuse for States to further reduce their contributions to the operating funds of the United Nations system, or not to meet the 0.7 per cent target for official development assistance. More, not less, of such funding was needed. The group also was dismayed that the relevant report on new and innovative funding ideas flatly stated that "ideas or schemes for charges of taxes on international transaction do not appear viable". That seemed a regrettable act of self-censorship when several of the most prominent studies and commissions on the future of the United Nations had given serious attention to those ideas. Due in large measure to threats from one important Member State and to the poison emanating from its legislators, the international community had shied away from the subject. It should not allow itself to be paralysed on this important matter while the world's people were paying an enormous price in terms of a deteriorating global environment and regression in development.
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