 This is the first United Nations-hosted conference to address key financial and development issues. The conference attracted 50 heads of states or governments, over 200 ministers, as well as leaders from the private sector and civil society, and senior officials of all the major intergovernmental financial, trade, economic, and monetary organizations.
The Monterrey Conference discussed the issues of trade, aid, debt, investment, strengthening national capacities and coherence of global and regional financial structures, in order to formulate a strategy for better resource mobilization to achieve the MDGs.
The conference also marked the first quadripartite exchange of views between governments, civil society, the business community, and the institutional stakeholders on global economic issues. These global discussions involved over 800 participants in twelve separate roundtables.
Most of the major donors have prepared statements of policy to coincide with the meeting. The European Union and the United States made announcements on substantial increase in ODA [Table 1].
The conference adopted the "Monterrey Consensus" in which comprehensive and coherent financial mobilization at both the domestic and international, and the private and public levels are included [Table 2 ].
Table1: Remarks by UN, World Bank, USA and EU at the International Conference on Financing for Development (March 18-22, 2002 at Monterrey, Mexico)
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United Nations
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World Bank
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USA
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EU
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| Additional financial need to meet MDGs and/or additional financial commitment |
Additionally needed at least $50 billion a year. |
Additionally needed at least $40-60 billion. |
50% increase in over the next three budget years. This will mean a $5-billion annual increase over current levels. |
Reaffirms its commitment to the target of 0.7% of GNP to be devoted to development aid, the interim target of 0.39% by 2006.
Aid from the EU and its Member States will increase by about E 8 billion (approximately USD 7 billion) per year by 2006.
Over the period 2003-2006, this progressive increase will enable us to devote about E 22 billion more to the fight against poverty.
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Quality of Aid
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...given in an efficient way, e.g. leaves recipient countries free to choose the suppliers and contractors that best meet their needs. |
Scaling up- moving from individual projects to programs. |
New funds will go into a new Millennium Challenge Account, devoted to projects in nations that govern justly, invest in their people and encourage economic freedom. |
Giving priority to health and education in the allocation of our aid and are making a substantial contribution to the Global Health Fund to fight AIDS and other contagious diseases. |
| Trade & Investment |
The promise of Doha must be fulfilled. |
Keep urging rich countries to tear down trade barriers. |
We must bring down the high trade barriers between developing nations, themselves. |
We undertake to negotiate constructively to ensure that the success of the Doha Round gives a lasting boost to the world economy. |
| Source: International Conference on Financing for Development Website |
Table2: Monterrey Consensus (March, 2002)
Achieving the Internationally agreed Development Goals demands:
- Mobilizing and increasing the effective use of financial resources;
- Achieving the national and international economic conditions; and
- New partnership between developed and developing countries.
Mobilizing domestic financial resources (domestic savings):
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Mobilizing int'l resources (FDI and other private flows):
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Int'l financial and technical cooperation for development -to meet MDGs-:
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External debt:
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 Good governance (sound macroeconomic policies, regulatory framework. Fighting corruption).
Transparent system for mobilizing public resources.
Investment in basic economic/social infra. and social services.
Domestic financial sector.
Micro-finance.
Capacity building.
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Technical Assistance and productive capacity- building program.
Private foreign investment in infrastructure.
Innovative developmental financing mechanism.
Transparency and the information about financial flows.
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Substantial increase in ODA (concrete efforts towards the target of 0.7% of GDP as ODA, especially 0.15-0.20% for LDC)
Intensify efforts to the followings for ODA effectiveness:
1)Harmonize operational procedures, 2)Untying aid, 3)Use of the suitable aid delivery instrument including budget support mechanisms, 4)Use development frameworks that embody poverty reduction strategies, including PRSP, 5) Recipient ownership including procurement and TA 6)Use of ODA to leverage additional financing such as FDI, 7)Triangular/south-south cooperation 8)Aid coordination to targeting to the poor and measurement of results
A vital role of multilateral and regional development banks.
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National comprehensive monitoring strategies.
Debt relief measures should be pursued vigorously and expeditiously, including within the Paris and London Clubs.
HIPCs, continued flexibility about eligibility criteria is important.
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Int'l trade as an engine for development:
- Appropriate institutions and policies in developing countries
- Encourage the members of WTO to implement the outcome of Doha round
- Promote subregional and regional integration
- Removing supply-side constrains
- Support to depressed export revenues of commodity export countries
- Help WTO accession
Systemic issues: enhancing the coherence and consistency of the int'l monetary, financial and trading systems in support of development:
- Reform of the int'l financial architecture
- Strong coordination of macroeconomic policies among the leading industrial countries
- Role of IMF to strengthen the int'l financial stability
- Good governance at all levels
- Participation of developing countries in int'l decision-making
- UN's fundamental role
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 Staying engaged proper follow-up to the implementation of agreements: The modality of follow up international conference to review the implementation of the Consensus shall be decided upon not later than 2005.
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Source: UN [2002] Report of International Conference on Financing for Development (March 18-22, 2002 at Monterrey, Mexico)
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| United Nations, International Conference on Financing for Development Website. [http://www.un.org/esa/ffd/].
United Nations [2002], Report of International Conference on Financing for Development (March 18-22, 2002 at Monterrey, Mexico), March. [http://daccess-ods.un.org/doc/UNDOC/GEN/N02/392/67/PDF/N0239267.pdf?OpenElement].
*This note was written by GRIPS Development Forum.
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International Conference on Financing for Development