open Democracy News Analysis - A global share: Monterrey to Doha, Alison Evans Simon Maxwell - Comments

Nachiket Mor on "Financing development: from Monterrey to Doha"

Nachiket Mor — Mon, 01 Dec 2008 05:12:16 +0000

I think there will be a need to think well beyond good corporate citizenship if the private sector is indeed to play a role.

We need to begin by recognising that the poor, for the most part, look after themselves -- that governments or their subsidies are not really a major part of their lives. Given this reality, is there a way to begin to change the constraints in which these households operate using private sector approaches? The need will be to start with the competitive capabilities of the very poor rural remote household (as a consumer and a producer) and find a way to unlock that.

A serious attempt is being made by the IFMR Trust (www.ifmrtrust.co.in). As Chairman of their Board I presented their strategy at Doha recently (http://www.nachiketmor.net/presentations2).

Sayed Attia on "Financing development: from Monterrey to Doha"

Sayed Attia — Sun, 30 Nov 2008 09:50:15 +0000

The idea of the conference is very unique at this particular moment. more steps should follow to push the developmnet a head.

Ronald Labonte on "Financing development: from Monterrey to Doha"

Ronald Labonte — Fri, 28 Nov 2008 12:20:24 +0000

In an otherwise excellent commentary, Evans and Maxwell overlook four critical issues in the reform of the aid architecture. First, while multilateral aid (via sector-wide or direct budget approaches) should trump bilateral aid (which still tends to be tied, episodic and politically directed rather than needs-based), the World Bank has yet to demonstrate that it is best positioned to administer such aid. It continues to promote many of the macroeconomic policies associated with its discredited structural adjustment policies of the recent. Until the international financial institutions are reformed, both in mandate and in representation, they are opaque and undemocratic fora for any system of global governance. Second, there is no mention of the need to establish a global 'court' to resolve outstanding debt issues. Much of the debt still owed by low and middle income countries has been assessed, under international legal definitions, as being odious and thus uncollectible. Third, while engagement with philanthropic organizations may be necessary, such organizations are even less publicly accountable or democratic than the international financial institutions. Yet, assuming nominal OECD taxation policies, the funds they distribute represent foregone tax revenue equal to 30% or more of their actual disbursements -- without any public oversight. Better that multinational corporations operating in developing countries re-negotiate decent royalty payments for their extractive industries, contract publicly regulated not-for-profit health organizations to provide a full range of health services for their workers and their families in their operations (and in their sub-contracted suppliers) -- and so help to build sorely needed publicly administered health systems within these countries -- and cease using offshore financial centres to avoid paying taxes. Fourth, and related to this last point, all countries at the Doha meeting need to sign a legally binding treaty to close such offshore centres, where estimates of untaxed personal wealth range between $5 and $11 trillion. Corporate wealth is less easy to estimate, but in one such centre alone (the Cayman Islands), there are around 60,000 people and almost 90,000 registered companies. It is particularly critical that the UK take a lead on this issue; despite its recent and rhetorically strong policy statement on global health ('Health is Global,' 2008) it remains one of the worst foot-draggers on strengthening systems of global tax regulation to prevent such tax avoidance.

adrain on "Financing development: from Monterrey to Doha"

adrain — Fri, 28 Nov 2008 09:25:43 +0000

"Treaties are like roses and virgins: they last while they last" (C.de Gaulle). However, the Cotonou Convention is not even a treaty, and it does not have the force of law.

Ivo Cerckel on "Financing development: from Monterrey to Doha"

Ivo Cerckel — Thu, 27 Nov 2008 04:12:40 +0000

“The FFD conference in Doha is not the arena for a global programme to fight recession.”

The economic model is broken
By Ron Beasley
http://www.newshoggers.com/blog/2008/11/the-economic-model-is-broken.html

Ivo:
If the economic model is broken,
then we should replace it with something else.

That is what is meant by a NEW Bretton Woods agreement.

There is NO WAY to continuing developing without a concluding a new Bretton Woods agreement.

That’s thus the FfD’s task in Doha over the week-end..

IMF wants GCC instability
November 27th, 2008 by Ivo Cerckel
http://bphouse.com/honest_money/2008/11/27/imf-wants-gcc-instability/
SNIP
IMF denies [Gulf Co-operation Council] GCC the essential tool of depegging from the USA dollar, whereas the EU gets a toolbox. The GCC must reply by immediately depegging from the USA dollar and by concluding a new Bretton Woods agreement over the week-end at the Doha, Qatar, Financing for Development (FfD) summit.

A global share: Monterrey to Doha, Alison Evans Simon Maxwell

Wed, 26 Nov 2008 17:44:32 +0000

For the world's poorest nations, the United Nations conference on financing for development (FFD) in Doha on 29 November - 2 December 2008 is the most important economic summit in half a decade.

Even before the financial crisis erupted, this meeting was likely to be marked by recrimination. Developing nations feel that they have been hit first and hardest by oil shocks and food-price surges, and failed by G8 promises on aid that have not materialised. The aid shortfall already amounts to some $30 billion a year, or 30% of pledges made at the Gleneagles summit in 2005. The stakes are now much higher, as the financial crisis bites. Research from the Overseas Development Institute (ODI) suggests that total financial flows to developing countries are likely to shrink by ten times as much as the extra promised by the G8 in Gleneagles: $300 billion - or 25% of current flows.

Alison Evans is director of programmes for the poverty and public policy group of the Overseas Development Institute (ODI)

Simon Maxwell is director of the Overseas Development Institute

Also by Simon Maxwell in openDemocracy:

"Inside the palace of glass" (27 June 2001)

"Chemical warfare in the bathroom" (15 August 2001)

"The global development agenda in 2007" (21 December 2006)

"Rome's food summit: a torch passed" (6 June 2008)

"Development in a downturn" (4 July 2008)

" A new global order: Bretton Woods II...and San Francisco II" (11 November 2008) - with Dirk Messner

Growth forecasts have been cut repeatedly in autumn 2008. The International Monetary Fund (IMF), for example, predicted growth rates for the different regions of the world in October and again in November. In just a few weeks, global growth for 2009 was downgraded from 3% to 2.2%, and for sub-Saharan Africa from 6.3% to 5%. The next round of estimates may well be even more pessimistic.

There will certainly be job losses. There will also be an increase in poverty, adding to the 100 million driven back below the poverty-line by the sharp increases in food prices in 2007-08. The World Bank estimates that for every 1% drop in growth, another 20 million people slide into absolute poverty.

Developing countries have not yet felt the full force of the hurricane that is about to blow through the world economy. But it is time to start nailing shutters on the windows (see "Development in a downturn", 4 July 2008).

The Monterrey model

The FFD conference in Doha is not the arena for a global programme to fight recession. That discussion is ongoing at the G20, the group of wealthy nations and emerging economies which met in Washington on 15 November 2008 and will reconvene under British leadership (probably on 2 April 2009 in London). For the same reason, there is unlikely to be much progress on the core G20 issue of financial-sector regulation. What, then, can be hoped for?

It is important that this is a United Nations event in which all countries are represented, not just the largest economies. Thus, Doha will agree a statement about global solidarity. This could be a bland homily about how we are all in this together, with no concrete commitments; or it could be a strong vision of global social justice, with specific agreements to share the pain and reduce global inequality. Expect the first.

The outcome document will reaffirm the basic bargain agreed at the first FFD conference in Monterrey in 2002. This meeting, just six months after 9/11, marked a turning-point in relations between rich and poor countries. For their part, developing countries made a commitment to good policies, good governance and the rule of law. Developed countries matched this with a commitment to debt relief and increased aid. The guiding principle was one of partnership. As a model of international cooperation, that still holds.

The Doha document is, for the moment, a tangle. But it will lay out the current agenda, and the main headings from Monterrey remain: domestic financing, private finance, trade, aid, debt, and systemic issues.

Much of the text will be aspirational: yes to trade deals, no to unsustainable debt, yes to donors keeping their promises. On past experience, it will not set out who must do what, and by when. Is there room for more than aspiration? There is nothing like a crisis to focus minds and make bold leaps seem more feasible.

Doha's choice: four recommendations

In this light, four steps could be taken in Doha to create a new deal.

First, Doha should make specific commitments to safety-nets and social protection for the poorest people. Humanitarian relief should be guaranteed for the 90 million people already in need of food aid, and the millions more who will join them as the recession deepens. Beyond that, ODI research shows that options exist to deliver social protection in almost every country - through cash grants, old age pensions, targeted subsidies, or direct provision of goods and services.

Among openDemocracy's articles on global development policy:

Jonathon Porritt, "'As if the world matters': reconciling sustainable development and capitalism" (30 November 2005)

Ehsan Masood, "The aid business: phantoms and realities" (18 July 2006)

Michael Hopkins, "Sustainable development: from word to policy" (11 April 2007)

John Elkington, "Brundtland and sustainability: history's balance-sheet" (11 April 2007)

Stephen Browne, "G8 aid: beyond the target trap" (6 June 2007)

Paul Collier, "The aid evasion: raising the ‘bottom billion'" (11 June 2007)

Andrew Shepherd, "The anti-poverty relay: a progress report" (24 September 2008)

Anita Sharma, "The core crisis: standing with the poor" (30 October 2008)

Andre Wilkens, "The global financial crisis: opportunities for change" (10 November 2008)Doha should therefore encourage all countries to develop and support concrete plans to create safety-nets for the most vulnerable, and commit the international system to providing additional financial support. But this financial support no longer refers to traditional donors alone. The international system now includes the new donors - such as China, India, and the oil-rich countries of the middle east. What a dramatic gesture it would be, at a time of global threats and falling oil prices, if those countries were to use Doha to announce timetables for increases of aid.

Second, Doha should build on the new enthusiasm for multilateral solutions, by putting the UN, the World Bank and the multilateral development banks (like the African and Asian Development Banks) at the heart of the aid system. At present, only about 25% of aid is reported by the Organisation for Economic Cooperation and Development (OECD) as multilateral, with 75% channelled bilaterally through a frighteningly large, confusing, incoherent and growing number of bilateral agencies and special-purpose funds. This has to change. A specific Doha commitment could be to stand the aid system on its head, with donors agreeing that 75% of aid should be multilateral by 2013.

The management of multilateral aid also needs an overhaul. Aid is coordinated by a donor club, the Development Assistance Committee (DAC) of the OECD, which, for all its good work, lacks legitimacy among developing countries and the bite to underpin enforcement. The UN has a separate body, the Development Cooperation Forum (DCF), which has suffered from association with the poor performance of the UN Economic and Social Council (Ecosoc), and the underfunding and political pressures that afflict the UN's department of economic and social affairs (DESA). Could the best of both be preserved, if the DAC and the DCF were merged or more strongly linked?

Third, Doha should establish a new formula for mutual accountability between rich and poor countries. Conferences, with their tendency to produce declarations with good intentions, are a poor way to do this. An alternative is to look at the structures developed by the European Union with its (to date seventy-nine) African, Caribbean and Pacific partners in the Cotonou agreement signed in 2000. This is based on a treaty with the force of law, and its key principles are enshrined and backed up by an agreed arbitration procedure. There is political oversight, through a joint council of ministers, and a joint parliamentary assembly. The UN political apparatus provides a structure of this kind. What is missing is an arbitration procedure to monitor progress and hold countries to account.

Fourth, Doha should build on shifts in the provision of development aid. Governments alone cannot bear the burden of support to development. Philanthropic donations may - when debt-relief, humanitarian aid and technical assistance are removed from the equation - be outstripping official aid flows. Companies have taken up the cause of global corporate citizenship, looking not just at their charitable donations, but also at the impact of their activities on development. This is a win-win for companies, reducing costs and boosting their local popularity. Doha should celebrate this trend and launch a programme to codify standards.

At the height of another global crisis, in August 1941, Franklin D Roosevelt and Winston Churchill agreed the Atlantic Charter - a vision of a world that could, realistically, be created. From that vision stemmed victory in war, the Universal Declaration of Human Rights, the creation of the United Nations and the financial scaffolding of the Bretton Woods system. Can Doha exceed expectations and be the platform from which to launch a change of similar magnitude?

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