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Statement on Behalf of the European Union at the resumed session of the Second Committee on High-Level International Intergovernmental Consideration on Financing for Development
H E Mr Stephen Gomersall, Ambassador and Deputy Permanent Representative, Permanent Mission of the United Kingdom of Great Britain and Northern Ireland
March 19, 1998Mr Chairman,
I have the honour to take the floor on behalf of the European Union. The Central and Eastern European countries associated with the European Union (Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia) and the Associated country Cyprus align themselves with this statement.
The EU welcomes the opportunity to engage in a systematic and comprehensive consideration of financing for development; and emphasises the importance of the UN taking a strategic approach, avoiding duplication of the work of other agencies. We believe that we all have a common interest in creating a broader-based partnership for development, building on the consensus reached at the recent major UN conferences, and the commitments undertaken in this respect by both developed and developing countries. The primary objective of enhanced financing for development will be the eradication of poverty.
We note that the question of financing for development has been addressed in a number of fora under the aegis of the UN in recent years. The UN conferences discussed the question of financing, both in relation to their specific themes, and more generally. The principles agreed in those earlier discussions remain valid, and further work undertaken on the subject of financing for development should build on them.
The EU believes that a comprehensive consideration of the development process and its broad objectives must embrace a comprehensive consideration of financing for development. This must include the full range of potential sources of financing, in particular domestic resources, but recognising fully the part external sources, such as ODA, foreign direct investment, and official and private sector loans, have to play. The material compiled and submitted to the GA in response to GA Resolution 52/179 should cover all these elements: their role in development and the relationships between them. We would like to suggest that the Secretary General might approach the following actors for inputs into this process.
We suggest that a primary source of information will be developing country governments themselves, since the greater part of the financing needed for a country's development comes from its own resources, including productive investments, national savings and internal earnings.
We would be interested in material which shows the steps governments are taking to develop coherent and comprehensive strategies for use of these, and other resources, in particular for the implementation of pro-poor policies in line with the agreements reached at recent UN conferences. Income distribution and income concentration in developing countries should also be addressed. It would also be useful to seek the views of recipient, and donor, countries on how to achieve maximum efficiency and effectiveness in the use of resources for development, including ODA. Interesting and valuable information may be available on revenue mobilisation, including better-targeted and more efficient taxation arrangements; food security mechanisms; sectoral investment programmes, covering both domestic and foreign investment from public and private sources; external debt management; savings and interest management policies, and capital repatriation; and the enabling environment for trade, including the legal framework, a well-functioning banking sector - central banks should also be consulted - and a diversified capital market. In this context it is important to bear in mind that the domestic policy framework is a key determinant of the availability of external financing from the private and public sectors.
The views of developing countries can be sought through a number of mechanisms, including, in those countries with pilot programmes, dialogue with governments conducted within the UN Development Assistance Framework (UNDAF). In this connection, we underline the importance of drawing on the outcome of government discussions with all relevant UN bodies, including the specialised agencies.
Developing country governments are also actively engaged in policy dialogue with a number of other interlocutors, including the World Bank, the IMF, the EC, regional development banks, as appropriate, and often a range of bilateral agencies. We hope that governments will be able to supply any relevant material resulting from these discussions, in particular material relating to their policy frameworks, their sectoral priorities and their strategies for implementation. Where governments have prepared sustainable development strategies, we hope that they will be made available. It would also be useful to have information on how developing country governments are pursuing policies on south/south cooperation and trade on a regional and global level with other developing countries.
We suggest that, given the volume of material entailed, it would be appropriate to focus on a small number of developing countries which might be identified on the recommendation of regional groups in order to provide a balanced view. Material surveyed should cover both LDCs and other developing countries.
Information should also be sought from the industrialised countries, most of then aid donors, and from the newly-industrialised emerging donor countries. We emphasise, however, that industrialised countries should be invited to provide not only details of ODA flows, which are only one, often small, element in an industrialised country's relationship with a developing country. They should be invited to give information also on how they are attempting to pursue a coherent approach to development, bilaterally and multilaterally, including working for international financial stabilisation, better market access for developing countries, and measures to alleviate the debt burden of developing countries. Regarding ODA, information could be sought from industrialised countries on the progress they have made towards fulfilling the target of 0.7% of GNP, and, if applicable, the constraints faced in this context.
Information on private financial flows from industrialised countries will also be essential; some of this will be obtainable from governments, though it may be possible also to get views from bodies which represent the interests of private business. within industrialised countries, there is a range of institutions, including export credit and export guarantee agencies and private sector financial institutions such as banks, as well as firms concerned with portfolio and direct investment, who should be consulted.
Also relevant will be information from donor countries on how they are working together to improve consistency and coordination in their policies towards developing countries in order to maximise the effectiveness of financial flows. Information of this type may be obtainable both from individual governments and also from groupings of governments. The Development Assistance Committee (DAC) of the OECD could be particularly useful in this area, and indeed could play a useful role in the information-gathering exercise as a whole. In the area of debt relief, information could also be sought from the Paris Club and, if possible, the London Club.
The multilateral institutions, including UN bodies and subsidiaries, should be able to contribute on a range of issues, depending on their expertise. Both the IMF and the World Bank should be able to offer guidance both based on specific country situations, and also on wider analysis of economic trends. We would expect the contributions of both institutions to go beyond reporting on their own financial flows for development to guidance on wider issues, including the prospects for levering increased private sector flows. The World Bank, for example, could elaborate on its Country Assistance Strategies, and the International Finance Corporation and the Multilateral Investment Guarantee Agency might also be able to offer some expertise.
Information on work done inside and outside the UN on new and innovative ideas for generating resources for development should also be included. In this context, we recall the recent consideration of these issues in ECOSOC and the Commission on Sustainable Development.
We would expect the reporting from the relevant multilateral institutions to include analysis of the potential opportunities and challenges of globalisation. This should cover both the ways in which developing countries might improve their capacity to take advantage of the opportunities of globalisation and an assessment of measures necessary to minimise any potential negative impact, for example lessons to be learned from the recent financial crisis in Asia. We would also expect an analysis of the international trade environment, including some assessment of the impact of increasing liberalisation on developing country economies and of the reasons behind the success of some developing countries in attracting foreign investment.
Non-governmental organisations and institutions, including academic institutions and "think-tanks", whether private or public, and other organisations of civil society may also offer helpful insights. Those which have a focus on development issues should be targeted in particular.
Attached to the written version of this statement, which is being distributed, is an indicative list of possible sources of information which we hope the Secretariat may find helpful in defining the terms of reference, and scope, of the research to be undertaken. We look forward to continuing to play a constructive part in discussions.
Thank you, Mr Chairman.
Institutions for financing for development
Developing Country Governments
Donor Governments
OECD/Development Assistance Committee
Central Banks
European Community
European Investment Bank
United Nations
World Bank
WTO
Regional Development Banks
Commonwealth
IMF
Agence de la Francophonie (ACCT)
Nordic Investment Bank and Development Fund
Export credit and guarantee agencies
Private banks
Rating Agencies
Investment funds
Pension funds
Emerging market funds
Ethical investment funds
Major private investors
Private firms importing from developing countries
Charitable foundations
Microfinance Funds
Non-governmental organisations
Research institutions
Universities
Creditors
Foreign Investment promotion agencies
More Information on Social and Economic Policy
More Information on Financing for Development
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