Goal: To Eradicate Poverty,
Achieve Economic Growth, Promote Sustainable Development

The International Conference on Financing for Development this morning adopted the "Monterrey Consensus" -- the outcome document of the Conference, held from 18 to 22 March in Monterrey, Mexico.

By the text, heads of State and government resolve to address the challenges of financing for development around the world, particularly in developing countries. Their goal is to eradicate poverty, achieve sustained economic growth and promote sustainable development, as they advance to a fully inclusive and equitable global economic system.

In the Consensus, the heads of State and government gathered in Monterrey will, as their first step, mobilize financial resources and achieve the national and international economic conditions needed to fulfil internationally agreed development goals, including those contained in the Millennium Declaration to reduce poverty and improve social conditions.

The terrorist attacks of 11 September 2001 exacerbated the global economic slowdown. It has now become all the more urgent to enhance collaboration among all stakeholders to promote sustained economic growth and address the long-term challenges of financing for development.

A summary of the adopted text follows:

Monterrey Conference Summary

The outcome adopted today (document A/CONF.198/3) is divided into three sections -- confronting the challenges of financing for development: a global response; leading actions; and staying engaged. In the first, the heads of State and government resolve to address the challenges of financing for development around the world, particularly in developing countries. Their goal is to eradicate poverty, achieve sustained economic growth and promote sustainable development as they advance to a fully inclusive and equitable global economic system.

The heads of State and government gathered in Monterrey would, as their first step, mobilize financial resources and achieve the national and
international economic conditions needed to fulfil internationally agreed development goals, including those contained in the Millennium Declaration to reduce poverty and improve social conditions.

While the role of national policies and the primary responsibility for each country's own economic and social development is emphasized, the text recognizes that domestic economies are now interwoven with the global economic system, and national development efforts need to be supported by an enabling international environment. It also recognizes the value of a holistic approach to the challenge, for which coherent actions are needed in each area of the agenda. It commits leaders to join forces through a strengthened multilateralism, in recognition of the potential of the United Nations system for fostering worldwide cooperation, and to consolidate the global economic system around the principles of equity, participation, ownership, transparency and accountability.

The document organizes its consideration of leading actions in the following way: mobilizing domestic financial resources for development; mobilizing international resources for development/foreign direct investment (FDI) and other private flows; international trade as an engine for development; increasing international financial and technical cooperation for development; external debt; and addressing systemic issues. Mobilizing domestic financial resources will be enhanced by: good governance; fighting corruption; sound macroeconomic policies; securing fiscal sustainability; social security and safety nets; financial sector strengthening; and capacity-building.

Under mobilizing international resources, including FDI and other private flows, the Consensus suggests that a central challenge is to attract direct investment flows to a much larger number of developing and transition countries. To attract stable inflows of capital, countries need to continue their efforts to achieve a transparent, stable and predictable investment climate, embedded in sound macroeconomic policies and institutions that allow businesses, both domestic and international, to operate efficiently and profitably and with maximum development impact.

To complement national efforts, leaders call on the international financial and development institutions to increase their support for private foreign investment in infrastructure development and other priority areas, including projects to bridge the digital divide. While governments provide the framework within which businesses operate, businesses have a responsibility to engage as reliable and consistent partners in the development process. The Consensus underscores the need to sustain sufficient and stable private flows of all types to developing and transition countries, and design measures to increase the transparency of financial flows and contain the excessive volatility of short-term capital flows and highly leveraged transactions, including trade in currencies.

Under the heading of international trade as an engine for development, States reaffirm their commitment towards trade liberalization and ensuring that trade plays its full part in promoting economic growth, employment and development for all. Thus, they welcome the World Trade Organization's decision to place the needs of developing countries at the heart of its work programme. To benefit fully from trade, which, in many cases, is the single most important development source, developing and transition countries must establish appropriate institutions and policies. Increased trade and FDI could boost economic growth and be an important source of employment.

The Consensus acknowledges issues in international trade of particular concern to developing and transition countries, such as trade barriers, subsidies and other "trade-distorting" measures, particularly in agriculture, and the abuse of anti-dumping measures. To ensure that world trade supports development for all, the leaders will, among other things, implement the commitments made in Doha to address the marginalization of the least developed countries in international trade and commit themselves to enhancing the role of regional and subregional arrangements and free trade areas. They will also call on developed countries to work towards the objective of duty-free and quota-free access for all least developed country exports.

On increasing international financial and technical cooperation, the Consensus recognizes that a substantial increase in official development assistance (ODA) and other resources will be required if developing countries are to achieve internationally agreed development goals. Leaders will urge developed countries, that have not yet done so, to make concrete efforts towards the target of 0.7 per cent of gross national product (GNP) as ODA to developing countries and 0.15 to 0.2 per cent to least developed countries. Recipient and donor countries, as well as international institutions, should strive to make ODA more effective.

On the issue of external debt, the text states that external debt relief can free up resources, which can then be directed towards development efforts. Therefore, debt-relief measures should be pursued vigorously and expeditiously, including within the Paris and London Clubs and other relevant forums. Speedy, effective and full implementation of the enhanced Heavily Indebted Poor Countries (HIPC) Initiative is critical. The importance of continued flexibility regarding the eligibility criteria is stressed. Leaders also encourage exploring innovative mechanisms to comprehensively address debt problems of developing countries, including middle-income and transition countries.

With regard to addressing systemic issues, leaders recognize the urgent need to enhance coherence, governance and consistency of the international monetary, financial and trading systems. International efforts under way to reform the international financial architecture need to be sustained with greater transparency and the effective participation of developing and transition countries. The multilateral financial institutions, particularly the International Monetary Fund (IMF), need to continue to give high priority to the identification and prevention of potential crises and to strengthen the underpinnings of international financial stability. In that regard, the text stresses the need for the Fund to further strengthen its surveillance activities of all economies, with particular attention to short-term capital flows and their impact.

A first priority, according to the text, is to find pragmatic and innovative ways to further enhance the effective participation of developing and transition economies in international dialogues and decision-making processes. One way to do that is for the World Trade Organization (WTO) to ensure that any consultation is representative of its full membership and that participation is based on clear, simple and objective criteria.

To strengthen the effectiveness of the global economic system's support for development, leaders encourage, among other things, improving the relationship between the United Nations and the WTO for development, and strengthening their capacity to provide technical assistance to all countries in need of such assistance. Also, leaders commit themselves to negotiating and finalizing as soon as possible a United Nations convention against corruption in all its aspects.

Finally, leaders commit themselves to keeping fully engaged, nationally, regionally and internationally, to ensuring proper follow-up to the implementation of agreements and commitments reached at the Conference, and to continuing to build bridges between development, finance and trade organizations and initiatives. They request the Secretary-General to submit an annual report on follow-up efforts and call for a follow-up international conference to review the implementation of the Consensus, the modalities of which will be decided no later than 2005.