INTERNATIONAL CONFERENCE
ON FINANCING FOR DEVELOPMENT

"We are here to report to you and the world that we are profoundly displeased with the outcome of the so-called Monterrey Consensus," Paul Nehru Tennassee, representative of the World Confederation of Labor before the United Nations and member of the International Support Committee. [ Read his full address at the Global Forum, March 14 ]

March 2002, the International Conference on Financing for Development (FfD) took place in the City of Monterrey, Mexico. This event was organised by the United Nations, in conjunction with the International Monetary Fund, the World Bank, and the World Trade Organisation. It was a summit in which the heads of state, ministers of finance, trade and social development have ben attending. Civil Society held its Global Forum preceding the FfD Conference, organised by an Mexican NGO Steering Committee.

The Conference played an especially decisive role because originally, so-called 'hard' topics such as trade and finances were discussed for the first time under the umbrella of the UN. The main goal was to find solutions for the permanent financial crises most of the Southern countries find themselves in. The range of issues on the agenda originally went from the future role of public and private financial capital flows to institutional reforms of the global financial system. The quality as well as the quantity of official development aid were also part of the agenda to support and promote sustainable development in those countries.

Unfortunately, the conference did not live up to the expectations of the Southern countries and Civil Society -- as heads of states and governments from industrialised countries shook hands with the bosses of the international finance and trade institutions and congratulated themselves for their new approach in the fight against poverty, representatives of civil society, but also from Southern governments, watched with mixed feelings. Not much was left from the original goal to solve not only the financial crisis of developing countries but also to develop a concrete plan to finance the implementation of the results of the World Conferences during the 1990s . The opposite is true - between the rhetoric and the reality of the international development co-operation, gaps are much bigger nowadays than they were ever before. For example in Germany, programs developed during the Nineties are completely under-funded and the question of the coherence between foreign und development policy is still not solved.

Read our report of the "Monterrey Consensus", including critiques of NGOs [ Finance for Development -- Report from the last PrepComm; by Nika Greger, Heinrich Boell Foundation Washington Office ]. There is also an assessment paper of the FfD Outcome Paper [ Assessment of the FfD Outcome Paper and Proposed Next Steps; by Martin Koehler, Robin Round; Campaign to Reform the World Bank - rtf; 7 pages ].

ORIGINS OF THE FFD CONFERENCE

The origins of the International Conference on Financing for Development can be found in decision adopted in session #50 of the UN General Assembly in1997, whose objectives is the following:

" ... will address national, international and systemic issues relating to financing for development in a holistic manner in the context of globalization and interdependence. By so doing, the event will also address development through the perspective of finance. Within this overall context, the event should also address the mobilization of financial resources for the full implementation of the outcome of major conferences and summits organized during the 1990s by the United Nations and of the Agenda for Development, in particular for poverty eradication. "

The governments of developing countries demand the international conference on Financing for Development for several reasons, mainly because the traditional official development assistance (ODA) is mired in crisis and drifting ever further from the goal of '0.7 per cent'. Also, the international private capital flow (including direct and portfolio investments) have mushroomed without the majority of the developing world having benefited from them, and last but not least, the financial crises of the past years indicated an increased need for regulation and harmonization within the global monetary and financial system.

As part of the FfD process, it has become very clear where most of the conflict between developing and developed countries lies: The G77/China are talking about the great historical significance of this conference for the future of development assistance and want to address not only financial issues but also the whole structure of financial markets and the international trade system. Developed countries such as the USA and the EU, on the other hand, are hovering quietly in the background. For them, mobilisation of domestic resources should be at the centre of all ongoing discussions. Questions regarding a new structure of the international financial architecture should be - if discussed at all - on the very bottom of the agenda. Governments from industrialised countries who eventually have to decide on their willingness to give financial assistance are not showing much enthusiasm at this point. Instead they are focusing more on mobilisation of domestic resources in developing countries or referring to the importance of the private sector.