Latest News

Jubilee Statements

Monitoring the impacts of government and corporate behaviour in communities overseas.

Financing for Development — first draft disappointment

Release Date: 12-Aug-2008

In November this year the review of the implementation of the Monterrey Consensus will be held in Doha, Qatar. The Monterrey Consensus refers to the outcome commitments of the United Nations International Conference on Financing for Development held in Monterrey, Mexico in 2002. The commitments agreed to at the 2002 conference were significant. They represented cooperation and progress in international development financing. Some of the key areas were aid effectiveness, capital flight and the debt crisis. Since 2002 the commitments have served as important points of reference for debt campaigners and other civil society organisations in the lobbying of governments and multilateral institutions.
In the lead up to November’s review session, draft documents are being circulated based on intergovernmental discussions and hearings with civil society and the business sector. The first draft of the November outcome document for the review of the Monterrey Consensus has been published this month. The lack of concrete targets and the absense of a progressive agenda to address the key areas in financing for development is very disappointing. The following extracts, written by European NGO coalition EURODAD, outline the main short-comings in relation to global debt (emphasis in original).

"Civil society groups in the North and the South — as well as Southern governments — have since been strongly disappointed on the failure of Northern governments to live up to the commitments made in Monterrey. In 2007, aid levels went down threatening the volumes of ODA available for achieving the Millennium Development Goals set for 2010 and 2015. Although progress has been made on providing debt relief, this is still insufficient and burdens the fiscal space available for developing country governments to foster economic growth and the fight against poverty. Northern governments and multilateral bodies have also not taken the necessary steps to enhance coherence of the global financial and economic system, so that higher aid levels and debt relief are matched with increased policy space for developing governments to design the most suitable policy options for development and retain national resources which keep on flowing outside these countries.

Unless a much more ambitious stance is taken, in terms of making progress on areas such as external debt, volumes and effectiveness of official development aid, capital flight and coherence of the global economic and financial system, the Doha Conference this November risks missing a unique opportunity for world governments to agree upon concrete and resolute measures to provide the necessary finance and policy tools to achieve the Millennium Development Goals and fight for poverty eradication.

Debt: a step backwards, few specifics
Eurodad is extremely worried that the section on external debt is a major step backwards from statements and commitments agreed in the Monterrey 2002.

A clear step backwards refers to the recognition, in the Monterrey Consensus, that “creditors and debtors share responsibility for unsustainable debt burdens”. There is no mention of co-responsibility for debt in the current proposed text on external debt. It is essential that this message be incorporated.

The draft acknowledges that “existing international debt resolution mechanisms, including the Paris Club, cannot guarantee … just treatment of creditors and debtors”. However, it is of particular concern that the current text places an unbalanced emphasis on the need to “guarantee equivalent treatment of all creditors”. The equal treatment of debtors with similar debt profiles and facing similar development challenges should be of paramount concern, not just the equal treatment of creditors. This demonstrates the need for an internationally agreed, impartial, fair and transparent debt resolution mechanism such as the fair and transparent arbitration procedure. Commitments to re-open international efforts on such a debt work-out mechanism need to be secured."