H.E. Vicente Fox Quesada, President of the United Mexican States,
Your Excellencies Heads of State and Government,
Secretary-General of the United Nations, H.E. Kofi Annan,
Distinguished Delegates,
Ladies and Gentlemen,

I wish to thank the government and the people of the United Mexican States for the warm welcome and hospitality extended to the Kenyan delegation since our arrival in this beautiful city of Monterrey. I would also like to thank President Vicente Fox Quesada for hosting this important conference.

I commend the Secretary- General for successfully organizing this first-ever Summit-level forum on the important agenda of Financing for Development. Kenya notes with appreciation the efforts by the Secretary-General in implementing the United Nations General Assembly resolution that seeks to address issues of financing for development.

Excellencies,

The UN Millennium Declaration adopted by the UN General Assembly endorsed the international development goals for 2015 and highlighted the task of mobilizing the financial resources needed to achieve these goals. In line with that declaration and the new African initiative under the New Partnership for Africa's Development (NEPAD), Kenya firmly believes in the need to reconfigure the global financial architecture and trade arrangements. In this process, Africa must not remain marginalised and should be firmly integrated into the world economy.

Excellencies,

The major challenge confronting developing countries is the increasing levels of poverty. It is disappointing that little progress has been achieved in poverty reduction since the World Summit on Social Development held in Copenhagen in 1995. Meager resources have so far been committed on reducing debt burden, improving market access, building capacity, tackling the HIV/Aids pandemic and other infectious diseases. Even after preparation of comprehensive Poverty Reduction Strategy Papers (PRSPs), resources have remained a constraint as development partners have not delivered on their commitments. We need a genuine approach to the fight against poverty.

Excellencies,

The existing global financial system and the arrangements for financing development have demonstrated their inability to deal adequately with the needs of developing countries. ODA flows to Africa declined substantially in the 1990s at a time when poverty was on the increase. More than 340 million people in Africa live on less than US$ 1 a day at a time when the continent has to deal with the high incidence and consequences of HIV/Aids.

There is an urgent need to put in place a new framework to create the enabling conditions for developing countries to achieve high and sustainable economic growth The new framework needs to emphasise more concessionary financing and greater use of grants. Kenya strongly supports the call to industrialized countries to raise their ODA to meet the target of 0.7 per cent Gross National Product (GNP) over the next five years.

It is Kenya's view that conditionalities tied to the release of aid should be realistic, achievable and sufficiently flexible to take into account changing conditions and circumstances. We also advocate a more pragmatic approach in assessing achievement of targets to take into account overall progress rather than insistence on achievement of individual benchmarks. We urge the development partners and particularly the Bretton Woods institutions to be more sensitive to the needs of developing countries.

Excellencies,

The current global trade arrangements have mostly benefited the industrialized countries. At present, Africa's share of global trade is less than 2%. It is unfair, for example that while industrialized countries continue to provide substantial subsidies to their agricultural sectors, they, together with the Bretton Woods institutions, make it a conditionality for support that developing counties liberalize their economies. This unfair situation makes it difficult for our agricultural exports to compete and for our agriculture to survive. We hope that, in the spirit of Doha, we shall see positive developments towards a reduction of these subsidies.

The current global economic system has resulted in high income inequalities. Rapid advances in telecommunications and information technology, and the increasing digital divide threatens to further marginalize developing countries and deny them the opportunities of globalisation.

Excellencies,

This conference must build on the momentum achieved in Doha, which embraced a development round of trade negotiations. Kenya supports an inclusive multilateral trading system. We fully support the current initiatives aimed at providing increased market access for African countries such as the African Growth and Opportunity Act and the European Union/African, Caribbean & Pacific trade arrangements.

Excellencies,

Kenya, along side other developing countries, has experienced a net outflow of resources over the past five years. The main contributor to these outflows is the heavy debt service burden. Under the enhanced HIPC initiative, Kenya is among four countries classified as having sustainable debt levels. Since this has denied us access to debt relief. We call for a fundamental change to the debt sustainability criteria. Funds released from such debt relief will be critical in funding core poverty reduction programmes.

Excellencies,

Africa faces urgent challenges which include the HIV/Aids pandemic, inadequate infrastructure and capacity building requirements.

Our efforts in tackling poverty have been undermined by the HIV/Aids scourge and other infectious diseases. Without an effective effort to overcome HIV/Aids, all our socioeconomic development gains will be reversed. We will require massive resources to mount an effective multi-sectoral HIV/Aids programme in order to realize a more positive impact on HIV/Aids prevention and care.

We support the international initiatives focused on a comprehensive and long term partnership between governments, civil society, international organizations and pharmaceutical companies in the fight against HIV/Aids. We call upon the international community to accelerate its support to the global fund on HIV/Aids, malaria, tuberculosis and other infectious diseases.

The poor state of infrastructure in Africa is a major impediment to economic development in the continent. Without good road networks, railway systems, ports, reliable and affordable energy, good airports, telecommunication systems, water and sanitation, it is very difficult to attract private sector investment. The cost of building this infrastructure is colossal and is difficult to finance on a fragmented country by country basis. It is imperative to finance it through regional initiatives, including regional integration. We also see opportunities for combining ODA support and FDI through private public partnerships. If properly packaged, these investment opportunities will attract private sector participation.

Excellencies,

Kenya recognizes that an important component of the financing for development is the mobilization of domestic resources. We have embarked on financial sector reforms in order to encourage domestic savings. These reforms include liberalization of the financial sector with a view to broadening and deepening the financial markets and developing appropriate savings instruments.

To overcome the persistent implementation weaknesses, Africa needs support in building appropriate capacity to design and implement good policies, programmes and projects.

Africa requires international support for its continuing efforts for comprehensive capacity building including basic education, institution building, technical, professional and managerial skills at all levels.

Excellencies,

Let me conclude by emphasizing that the Monterrey Consensus is an important step towards achieving the UN Millennium Goals. Kenya calls for genuine commitment and partnership between the developed and developing countries in the implementation of the Monterrey Consensus for mutual benefit of all parties in what can only be a win-win outcome. There is, however, need to agree on an effective mechanism to monitor the implementation of the outcome of this important international conference. Ultimately, our success will be measured by the extent to which we implement this consensus.

Thank you.