Development finance summit a fiasco, say campaigners

News|Bretton Woods Project|25 March 2002|update 27|url
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The International Conference on Financing for Development ended on March 22 in Monterrey with few new initiatives to achieve the 2015 developments goals. Civil society groups organised their own 'Foro Global' ahead of the Conference, challenging the so-called 'Monterrey Consensus'.

By the time officials and civil society representatives from all parts of the world gathered in Monterrey there was little doubt the Conference would be largely a failure. The outcome of the Conference, known as the 'Monterrey Consensus' had been drafted in preparatory committees and was not subject to further negotiation, which led many civil society organisations to question the wisdom of their participation in official events. About 700 hundred of them attended the 'Foro Global' that was held ahead of the Conference. It denounced the official agreement, saying it failed to offer new mechanisms to mobilise new financial resources to achieve the Millennium Development Goals.

Indeed the 'Monterrey Consensus' is considered a failure, if not a set-back, by many participants to the Conference, including some Southern and European governments. In early March European officials had expressed concerns about the process and its outcome, highlighting US reluctance to make any new bold commitment. The Mexican government was also described as pressuring G77 countries to keep a low profile, especially on the issue of debt relief.

Unilateral pledges made by the US and the European Union in advance of the Conference have received mixed reactions. George W. Bush's request to the Congress for a ten billion dollar aid increase over three years has provoked questions and criticism as well as some cautious support. There is no guarantee that the money will not be allocated following highly political criteria in the US crusade against terrorism. Moreover, the plan having been clearly designed to boost private foreign investment, some groups such as Globalization Challenge Initiative are concerned that the money will go back to US corporations.

Bush also reiterated the controversial US proposal to convert into grants half of IDA (International Development Association) concessional loans. Many European governments and NGOs have opposed the proposal. Their main concern is that a large grants scheme would deplete IDA's resources over time. NGOs expressed doubts about the implications of and motives behind the US proposal. Supporters of the proposal have argued that it could prevent impoverished countries building up unsustainable debt. Though a final decision on the IDA replenishment was supposed to be reached early in 2002 to leave time for national legislatures to approve the funds later in the year, discussions appear to be deadlocked and no compromise was expected to be reached during the Monterrey Conference.

The agreement for all European Union countries to commit to spend 0.39 per cent of their national income on foreign aid was regarded by European NGOs gathered at the Foro Global as a last minute recognition by the EU that "the lack of concrete commitments for achieving global poverty eradication and development goals undermines the relevance of the so-called Monterrey Consensus". They called this announcement and the US initiative, mere "face-saving reactions".

In a statement read to the official Conference Plenary, Foro Global representatives presented a range of proposals in stark contrast to the lack of vision and concrete outcomes from the official conference. Demands and proposals include: debt cancellation for Southern countries and a fair and transparent arbitration process, implementation of a tax on currency transactions to mobilise new resources, and fulfilment of the 0.7 per cent of GDP target for foreign aid. NGOs also claim that the World Bank, the IMF, the WTO as well as national and transnational corporations should be accountable to the UN Commission of Human Rights.

• Statement by Bretton Woods Project to Roundtable on Coherence (Word)
• Official UN Financing for Development site
• FfD Civil society forum
• Taken for granted? US Proposals to Reform the World Bank's IDA Examined, Bretton Woods Project, March 2002
• New Economics Foundation, Chasing Shadows: Re-imagining Finance for Development
• Jubilee research, The unbreakable link - debt relief and the millennium development goals

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Published: 25 March 2002 , last edited: 27 May 2010

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