Monitoring Policy Making at the United Nations |
| ||||||||||||
Financing for Development - Social and Economic Policy - Global Policy Forum Statement by the Commission on Sustainable Development
NGO Finance, Investment and Trade CaucusPresented by Doug Hunt
April 29, 1999Presented at the NGO Dialogue on the Agenda for Work of the Ad Hoc Working Group on Financing for Development.
Chairs, on behalf of the NGO Caucus on Finance, Investment and Trade (FIT) for the Commission on Sustainable Development I wish to thank you for providing this opportunity to dialogue with representatives of governments regarding issues we believe should be considered under the four Financing for Development elements being discussed this morning. The discussion of these topics in the more democratic surroundings of the UN and in ways that are open and participatory, in contrast to those of trade and investment negotiations and authorities ways is crucial.
It is the consensus of the Caucus that development financing that is not sustainable -- as defined and refined and evolved in the series of world conferences and UN follow-up meetings since that time -- is NOT something we can support.
The evidence from around the world is that current models of financing, investment and trade have repeatedly proven themselves to be destructive of cultures and peoples, undoing the fabric of civilized, moral and ethical society. Not only do the FIT policies underlying these financing models result in egregious maldistribution of wealth and access to resources, they destroy the very ability of people to sustain their livelihoods.
The ordinary people in this world, particularly those 1 billion and more living in poverty and desperation, as well as our global ecosystem CANNOT STAND MUCH MORE OF SUCH "DEVELOPMENT."
We also believe that restructured financing regimes for any kind of development must be open for input and participation at all levels from all affected people and peoples. New models must be planned, implemented, monitored and controlled in ways that ensure participation for local communities that are consistent with local community plans, interests, and needs. They must also be based on the results of thorough analyses of the impacts of existing models and practices on people and their environment, with specific attention to gender and indigenous peoples.
Trade
To be meaningful, we believe that your discussion of trade must specifically consider the impact of blindly forcing replacement of more sustainable local, national, and regional trade models with global trade (and, investment) regimes. The discussion must also begin with the assumption that what is most important is finding approaches can build on and support, rather than overwhelm, communities. Caucus members have seen and have heard of the effects of current regimes on the ability of small and medium sized entrepreneurs, farmers and working people to build and keep sustainable livelihoods.
We also see that formula-driven trade (and investment) polices, ignore national and local contexts. These policies are designed and carried out in the dark by economic and political elites, without notice, without public discussion, and without consideration of short and long-term ecological impacts. Without participation by the people directly affected in planning, implementing, and monitoring the impacts of their implementation, trade (and investment) policies are virtually guaranteed to serve only the interests of those that design them.
All too often, decisions of the WTO, as well as other trade agreements, grant private parties absolute authority to sell (and buy) what they want, when they want and how they want. These decisions subordinate all other concerns, e.g. human safety, social stability, ecological soundness, moral or ethical principles. This "right" to trade at any cost regardless of the consequences will ultimately destroy the very foundation that trade is based upon: the people who produce the goods and the ecosystems that supply the raw materials.
The Caucus believes that these issues must be made visible and conscious, becoming an explicit part of the Financing for Development agenda for trade.
For example, there is mounting pressure for a new round of trade negotiations at the WTO ministerial meeting in November 1999. Instead of expanding the powers of the VVTO, the Caucus believes that there needs to be a comprehensive and in-depth review and assessment of the existing WTO agreements and practices. This can provide an opportunity to change course and begin the work of developing an alternative, humane and sustainable system of trade that supports development that is ecologically sound and socially and economically just.
Innovative Sources of Financing
We believe that consideration of innovative sources of financing must start with an assessment of where the world's financial resources are currently being directed. The Caucus believes that redirecting much of the current spending on unsustainable mega-projects combined with major reductions in the production and sale and use of armaments would provide major funding for more sustainable local and regionally planned, monitored and controlled development.
Establishing an international fee for financial transactions (as recently advocated by Canada and generally referred to as a "Tobin Tax") is one of the most important and innovative potential sources of financing for sustainable development that you should consider. This would not only help moderate global capital flows, it would provide revenue sources less subject to pressures from particular national political interests.
The Caucus also urges you to consider the importance of providing encouragement, resources, and support for local, national, and bioregional initiatives that "color outside the lines" of current financial, trade and investment policies. For example, we suggest careful examination of the current efforts of the European Union in promoting decentralized cooperation. Other options worth considering include retaining protections for small local banking initiatives from being overwhelmed by foreign or even domestic capital resources or that do not follow typical interest rate setting practices; existing credit union and similar arrangements whose primary interest is not in profit but community building and sustainability; and projects that require foreign investors to make "up front" commitments to strengthening community and local infrastructure and participate in an overall sustainability planning process focused on social and economic equity and environmental sensitivity.
We also urge you to consider ways in which foreign direct investment can be subject to local community monitoring, and control as well as national capital controls. Stable, sustainable development can only be achieved when foreign investors who have an interest in profiting from local community labor, natural resources, or knowledge and culture bring with them a commitment (and an obligation) to work within the boundaries, interests and needs of those communities.
We also feel that the you should consider recognition and repayment of the very real "ecological and social debt" owed to those who have not benefited from current development, investment, and trade practices but whose communities, regions and nations have been and continue to be devastated by these practices.
Global Financial Architecture
The Caucus believes that the discussion of this element must start with a clear recognition that current patterns of globalization worsen the lives of ordinary people around the world on a daily basis and continue to devastate the global environment.
Of particular concern are government and multilaterally imposed requirements for radical and rapid reform of internal economic systems and structures, resultant reductions in social, educational, environment, and health care spending. We already have the living evidence clearly demonstrating that these practices are devastating to people living in poverty around the world forcing many from lives of subsistence into desperation.
The Caucus proposes that the FfD examination of the global financial architecture be based on an understanding of the impact of current policies and practices. We believe that this discussion must, therefore, include a more comprehensive analysis of the impact of trade and investment liberalization on the ability to accomplish sustainable development, that is ecologically sound and social and economically just. Such analyses must pay special attention to the impact on the lives of the world's impoverished people, the majority of whom are women and children.
We also urge that your work take up design of international financial frameworks that enable rather than undermine meaningful and effective participation of the people affected at the all levels.
More Information on Social and Economic Policy
More Information on Financing for Development
More Information on the Preparation of the Financing for Development Summit
FAIR USE NOTICE: This page contains copyrighted material the use of which has not been specifically authorized by the copyright owner. Global Policy Forum distributes this material without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. We believe this constitutes a fair use of any such copyrighted material as provided for in 17 U.S.C § 107. If you wish to use copyrighted material from this site for purposes of your own that go beyond fair use, you must obtain permission from the copyright owner.
