Transcript Financing for Development (FFD) Monterrey, Mexico March 18

Financing for
Development
On 22 March 2002, Heads of State gathered in
Monterrey, Mexico, to “address the challenges of
financing for development around the world”, particularly
for developing countries, at the first International
Conference on Financing for Development.
What are the major challenges of
Financing for Development at the
national and international level?
Leading Actions
•
Mobilizing Domestic
Resources
•
Mobilizing International
Resources
•
•
International Trade
•
•
External Debt
International financial
Cooperation
Addressing Systemic
Issues
Mobilizing domestic Financial
Resources
Countries with extreme poverty adopt and begin to
implement, no later than 2006, a national development
strategy bold enough to meet the
Millennium Development Goals by 2015
Mobilizing international resources
A high proportion of foreign direct investment should be
directed to low-income countries and foreign direct
investment’s positive contribution to their development
should be ensured
DESPITE HIGH LEVELS OF FDI, NET
RESOURCE TRANSFERS HAVE BEEN
NEGATIVE FOR 7 CONSECUTIVE YEARS
100
0
-100
-200
-300
Net resource transfers
Foreign direct investment
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
-400
1990
Billions of dollars
200
NET TRANSFER OF FINANCIAL
RESOURCES FROM THE DEVELOPING
TO THE DEVELOPED WORLD
Net outward transfers of financial resources have been
increasing steadily in developing countries since 1997 and
reached an estimated $350 billion in 2004.
The net outward resource transfer from developing to developed
countries is usually considered to have a negative impact on
domestic growth since the net export of goods and services
reduces the resources available for domestic consumption and
investment.
The improvement in net private flows, while substantial was not
sufficient to offset the net outflows.
This negative transfer is partially reflected in a record increase in
international reserves.
International Trade as an engine for
development
Recognizing the links between trade,
development and finance, a more
open, equitable, rule-based,
predictable, non-discriminatory and
equitable multilateral trading system is
critical to exploiting the potential of
trade to act as a source of financing
for development.
Increasing international financial
and technical cooperation
Official Development Assistance
is increasing in nominal terms but
more needs to be done to
increase assistance to ensure the
financing required to attain the
Millennium Development Goals.
OFFICIAL DEVELOPMENT ASSISTANCE
PLEDGES AND REALITY
agreed target
Denmark
Norway
Netherlands
Sweden
United
Kingdom
France
Germany
Average Aid
Japan
1.0
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0.0
United
States
Percent of GDP
2004
Debt Sustainability
Three decades
of debt crisis
has engulfed
most of the
world’s
developing
countries at the
cost of millions
of lives.
“Allow countries
to meet MDGs
by 2015,
without
accumulating
unsustainable
debt ratios.”
Secretary-General
External Debt- Foreign Debt Service
Payments In Billions Of US$
Foreign Debt Service Payments
$180
$160
$140
$120
$100
Africa
Cen Eur
L Am
Asia
$80
$60
$40
$20
$0
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
1986
1985
1984
1983
1982
1981
1980
Addressing
systemic issues
Enhancing the coherence and
consistency of the international
monetary, financial and trading
systems in support of development
Create the political will to enhance
developing countries’ sense of
responsibility and domestic
ownership of their own development
by providing them with a more
equitable voice and participation in
the institutions that take the
decisions that affect their
development prospects.