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SUMMARY OF PRESS CONFERENCE BY SECRETARY-GENERAL, WORLD BANK PRESIDENT,
IMF MANAGING DIRECTOR, WTO DIRECTOR-GENERAL

The International Conference on Financing for Development was unprecedented not only in bringing finance and development ministers together with businessmen, but also in the way the United Nations, the International Monetary Fund (IMF), the World Bank and the World Trade Organization (WTO) had worked together in preparing it, Secretary-General Kofi Annan told correspondents this afternoon.

At a press conference held jointly with World Bank President James Wolfensohn, IMF Managing Director Horst Köhler, and WTO Director-General Mike Moore, Mr. Annan said: "I have made clear this morning that we can no longer continue to give with one hand and take away with the other. We must work together, in a coherent fashion, if we want to achieve our goal."

In response to a correspondent who asked what was known about development today that was not known a week ago, Mr. Wolfensohn said there was now a unity of purpose between the leaders of the developed and the developing countries. What was coming out in the consensus was that the partnership was not only recognized, but also that they would act on it in the areas of capacity-building, trade and increased development assistance, with each side bearing its responsibilities. While that had been known before, it had now been acknowledged by consensus and it was possible to move forward.

Mr. Köhler added that what was new was the uniqueness of the joint press conference. That should send a strong message.

Another journalist said the focus was on financing for development, while Argentina needed finance for survival. Would the international community watch the meltdown in that country or could it help Argentina solve the crisis?

Responding, Mr. Köhler acknowledged difficulty of the situation and the social dislocation involved. The IMF and the Argentine authorities were working hard to find a way out of the crisis. However, there was no quick fix for that very complex situation and, clearly, Argentina itself had the primary responsibility to find a way out.

The Secretary-General added that the Argentine situation was not merely a financial crisis, but had an impact on real people. "We will have the chance of speaking to the President here, but there is quite a lot of sympathy and support for the people of Argentina", he said. However, Argentina would have to take the key steps with the support of the international community.

Mr. Moore said that the Doha development round must be concluded on time, in January 2005. He said the Argentines had stated that agricultural subsidies were costing them about $5 billion a year. If that figure could be reduced within the three-year timeframe, that would return to developing countries $54 billion -- up to five times more than all official development assistance (ODA) and eight times more than the debt relief granted so far.

There was still a large gap between the pledges by the United States and the European Union and the money required, another correspondent said. How would the rest be obtained? What substantial change had taken place in the international community's handling of the problems?

Mr. Annan replied that, apart from the money given, the acceptance that aid was necessary, and the realization by the public that it was in the common interest to help the poor, would maintain pressure on politicians to keep assisting the developing nations. In addition, there were many business leaders with whom he had discussed not only foreign direct investment (FDI), but also ways to accelerate development and, in some cases, to leverage development assistance to encourage investment by the private sector.

Mr. Wolfensohn added that the first check that one wrote was always the best one. The pledges were indications by the United States and Europe that they were prepared to write checks. They had set out a basis on which they would do so that was rational and agreed between the developed and developing countries. Two weeks ago, there had been no thought of the increase and now there is a significant increase and a basis to move forward.

In another reply, Mr. Köhler said the Conference was a further milestone to understanding ODA as an investment in a better future for all. There was growing awareness of the interconnectedness of poor and rich countries. A policy concept was needed to define policy content, particularly on a global level, and to define a concept of global governance that took care of global public goods.

Mr. Moore pointed out that at the launch of the first development round at Doha, developing countries had stated their need to build their institutions and capacity so they could negotiate, participate and implement the results. Donor countries were keeping their word in trade; the resources were flowing and, unless that happened, the development round would not succeed.

Another journalist asked how the United States could be convinced that poverty was a priority after 11 September.

The Secretary-General replied that the international community's presence in Monterrey was enough indication that the entire focus was not on terrorism. None of the problems that existed on 10 September had gone away. It was even more urgent to tackle the issues of poverty and conflict. "In five months' time, we will go to Johannesburg and continue", he added.

Another correspondent, noting that the insistence on good governance was sometimes perceived as political pressure, asked how a country like Lebanon could fulfil tough conditions required by the IMF.

Mr. Köhler stressed the importance of crisis prevention. Member countries should avoid the build-up macroeconomic instability through unsustainable debt or high inflation rates or disregard for a competitive economy. If there was a need to correct a situation, there was no other way out but to face the choices. The IMF could give up its combining of funding with conditionality, but it could learn

through past experience. The Fund may have demanded too much in the past and was in the process of reviewing the concept of conditionality. But the primary responsibility lay with the country itself, which should be proud of that sovereign right.

The Secretary-General added that good governance should not be seen as being imposed by the IMF or other outside forces. It was in the interest of all, especially the poor. Strong institutions and regulatory systems created an environment that liberated the energies of the people. That was the foundation on which sustainable development was built.

Asked what standards a country needed to fit to receive assistance,
Mr. Wolfensohn said that both the donor and recipient countries had agreed on the standards. They included working legal and financial systems, elimination of corruption, benefits for the poor such as education, health and proper infrastructure, and acceptance of the responsibility to get the job done. From the developed countries must come recognition that nothing would work unless there were markets open for trade and ODA.