As the Economic and Social Council began the high-level segment of its annual month-long session this morning, United Nations Secretary-General Kofi Annan said that although the world economic outlook was plagued by an unusual degree of uncertainty, globalization offered unparalleled opportunities to achieve greater equity through more sustained and balanced growth. It was vital to seize those opportunities, and in doing so, maintain particular focus on the needs of Africa, he said.
Poor economies were paying the highest price for the economic downturn, he continued. Only limited improvement was foreseen in the developing world for the current year. And while the immediate effects of the 11 September terrorist attacks were well known, their long-term effects -- coming just five years after the Asian financial crisis and one year after the adoption of the Millennium Declaration -- were more difficult to evaluate.
Based on the Millennium Development Goals, the challenge was to achieve not only economic and social development today, but to make it sustainable, he said. The World Summit on Sustainable Development, set to open in Johannesburg next month, would test the international community's ability to respond. Health and education were the twin pillars on which one must build the well-being of individuals, and thus a more healthy, equitable and peaceful world, he added.
Opening the meeting, Ivan Simonovic, the Council President, said the purpose of the one-day policy dialogue was for the Council to exchange views with heads of financial and trade institutions on the world economy and discuss ways to enhance international economic cooperation. The participants would also consider follow-up to the Monterrey conference on financing for development, and the role of human resources development in overall development, particularly in the areas of health and education.
Paul H. O'Neill, Treasury Secretary of the United States, said investing in clean water, primary education, and fighting HIV/AIDS were vital to realizing human potential in Africa. One insight from his recent tour was that "we can help local and national efforts to bring clean water to many towns and villages fairly quickly." In West Africa for example, one organization had estimated that clean water and basic sanitation could be provided at a cost of about $17 per person, per year, over five years.
He said a prosperous future required that children enter school at an early age, and stay in school with well-trained teachers and adequate materials. It would cost only an estimated $18 million per year to buy one textbook for each of four core subjects for every primary student in Uganda.
The need to invest in health care was nowhere "more urgent and more heartbreaking" than in the struggle against AIDS, he added, saying that President Bush had announced $500 million for the International Mother and Child HIV Prevention Initiative, among other pledges.
He stressed the need to avoid creating the next generation of highly indebted poor countries. Essential investments in sectors such as health care and education should be funded by grants not loans. With the right combination of aid and accountability -- from both rich nations and poor -- "we can accelerate the spread of clean water, education and health care throughout Africa and the developing world."
Horst Köhler, Managing Director of the International Monetary Fund (IMF), opened the policy dialogue, saying, the Financing for Development Conference in Monterrey had produced an unprecedented common understanding about what it would take to overcome world poverty. First, the basis for everything was self-responsibility. Economic development required good governance, respect for the rule of law, and policies and institutions that created a good investment climate and unlocked the creative energies of the people.
On that basis, developing countries could rightly expect faster and more comprehensive support from the international community, he continued. What was crucial now was to transform the Monterrey Consensus into concrete action and measurable results, he stressed, pointing out that trade was crucial for growth.
Also participating in the dialogue were Rubens Ricupero, Secretary-General of the United Nations Conference on Trade and Development (UNCTAD), Miguel Rodriguez Mendoza, Deputy Director-General of the World Trade Organization and Mamphela Ramphele, Managing Director of the World Bank.
The Council will meet again this afternoon to continue the high-level segment of its 2002 substantive session.
The Economic and Social Council (ECOSOC) met this morning to begin its 2002 substantive session. Through 26 July, ministers and heads of delegation of both the Council's member countries and observer States will consider the role of human resources development, including in the areas of health and education, as an essential factor in the overall development process.
During the high-level segment of the session, top ministers of health and human welfare, and heads of international agencies, will join with the Secretary-General and Dr. Jeffrey Sachs, his Special Adviser on the Millennium Development Goals, in a high-level dialogue on ways to improve health and education and to launch new approaches and partnerships to accelerate progress towards human development as a principle engine for development. The high-level segment runs through 3 July.
Today, top officials from the International Monetary Fund (IMF), World Bank, United Nations Conference on Trade and Development (UNCTAD), and the World Trade Organization (WTO), will also lead a special policy dialogue and discussion on important developments in the world economy.
That discussion will be guided by chapter 1 of the World Economic and Social Survey (document E/2002/50), compiled by the Development Policy Analysis Division of the Department of Economic and Social Affairs. The report notes that where the 2001 slowdown was rapid and quickly embraced by many countries, the recovery is expected to be both slow and less synchronized among economies.
The report states that the economic downturn -- which began in the United States when financial difficulties rocked the informational and technologies sector there -- was quickly transmitted around the world through a decline in international trade, the first in almost two decades. The world economy is forecast to grow by less than two percent in 2002, with the momentum of the rebound pushing global growth to above three percent in 2003.
Consumer spending remained strong in the United States and even in some developing and transition countries, the report says. But the cumulative effects of reduced overall growth and higher unemployment, reinforced in the developed countries by lower stock market returns, will muffle consumer spending around the world in 2002.
Only a modest recovery is expected in the developed countries in 2002, while economies in transition are forecast to witness further deceleration. Among the developing countries, the report continues, China and India were able to maintain their growth in 2001 and are expected to continue to do so in 2002 and 2003, but the majority are not expected to return to the average rate of growth achieved prior to the Asian financial crisis until late in 2003.
The report emphasizes the role of the United States in the world economy -- those countries, which depended most on access to American markets fared the worst in 2001, as well as those with strong information and communication technologies sectors. Among the nations that were severely affected were Latin American countries and countries of South-Eastern Asia, including the Republic of Korea and Singapore. The United States recovery in 2002 was expected to be modest, and the stimulus it provided to the rest of the world through imports, would be correspondingly limited.
African countries, the report continues, had been relatively little affected by the slowdown. Their economies continued to grow at only about three per cent, however. Compared with the two per cent population growth in the area, such an increase had a negligible effect on development.
Still, the report points to a few positive signs for the medium term. Most important among those are the improved understanding between the North and the South on key development issues emanating from the initiation of trade negotiations in Doha, Qatar in 2001 and from pledges and commitments made at the International Conference on Financing for Development in Monterrey, Mexico. It also highlights the need to initiate actions to strengthen partnerships for development, ensure requisite increases in official development assistance (ODA) and address the external debt burden faced by most developing countries.
Also before the high-level segment will be the Secretary-General's report on human resources development. In that report (document E/2002/46), he notes that in spite of increased international commitment to health and education, progress remains uneven and inadequate. The high-level segment of the Economic and Social Council (ECOSOC) is an occasion to give renewed political impetus to national and international efforts to improve health and education and to launch new approaches and new partnerships to accelerate progress towards human development as a principle engine for overall development.
He stresses that the notion of human resources development -- so fundamental to the development process -- has evolved into a broader socio-economic and public policy concern for facilitating the development of human capacities, knowledge acquisition, empowerment and participation. At the broadest level, human resources development is an important end in itself, but it must also be recognized as an essential form of productive investment.
Referring to the current report of the Commission on Macroeconomics and Health, the Secretary-General observes that the significance of increased investment in health is clear: the report confirms that a substantial scaling-up of investments in health for poor people will not only save millions of lives but will also produce considerable economic gains. He adds that other research has shown a clear economic payoff from investment in education and training; one extra year of education can, in the long run, increase an individual's per capita output between four and seven percent in countries of the Organisation for Economic Cooperation and Development (OECD).
He also emphasizes the important synergies between health and education. Development experiences strongly suggest that progress in the area of health reinforces progress in the education sector and vice versa. Health investments are more effective in the presence of better-educated populations. Similarly, investment in education cannot be effective without a healthy population. Education, training and associated health services, if well coordinated, can together form a strong supportive human resources development web, with a cumulatively higher impact on development.
The Secretary-General goes on to emphasize the need to explore ways to increase the resource base in order to fund well-formulated plans to improve human resources development. Ensuring the full integration of education and health into poverty eradication strategies is essential, he says, as is the role of the international community and United Nations in assisting developing countries build their capacity for human resources development.
While recognizing that the challenge of achieving the health, education and development goals set at the Millennium Summit remains considerable -- particularly in financing those goals -- the Secretary-General stresses that it is possible to achieve tremendous advances with political leadership and commitment, as demonstrated by some developing countries.
The Millennium Development Goals are indeed technically feasible and financially affordable at the global level, he continues, and therefore ministers, heads of delegations and political leaders must ensure that health and education policies are fully integrate into poverty reduction strategies. Furthermore, human resources and development strategies must be constantly adapted to meet changing needs in the context of globalization.
The Secretary-General stressed that domestic spending on human resources development, including in health and education must be increased by developing countries to provide basic health care and education to the poor free of charge. At the same time, international development assistance must be massively increased to provide adequate and sustained resources for the effective programmes that will strengthen the necessary delivery systems for health and education.
He urges the Council to maintain the focus on financing for human resources as part of its role in the follow-up to the Monterrey International Conference on Financing for Development. Building on the commitments made by some donors, the Council could reiterate the call for increased assistance for the Global Fund for HIV/AIDS, Tuberculosis and Malaria, increased ODA, greater debt relief, and increasing resources generated through greater market access and trade.
He further suggests that the Council call for the strengthening of the United Nations system's catalytic, advisory and supportive role in promoting human resources development and universal access to quality health and education services.
To that end, the United Nations system should be encouraged to, among other things, support efforts at the national, regional and global levels to integrate human resources development programmes into poverty reduction strategies; build partnerships with stakeholders based on common goals and mutual responsibility; and help countries build policies, institution and local technical capacity to implement measures known to work in specific country contexts to improve sustainability and strengthen health and education systems.
The Council will also consider the Secretary-General's consolidated report on the work of ECOSOC'S functional commissions (document E/2002/73), which aims at assisting the Council in providing policy guidance to its commissions and in coordinating their work. It accordingly identifies linkages, common themes and coordination issues arising from the work of the commissions in 2002.
The first section of the report addresses the substantive aspects of the commissions' work. In an analysis of common themes and issues during 2002, the report focuses on aspects relating to sustainable development, poverty, ageing, health and education. The commissions have extensively addressed these issues, reflecting the themes of two major conferences in 2002 and the upcoming World Summit on Sustainable Development. As in previous years, the commissions have sought to contribute to the debate on the building of an enabling environment for development and spreading the benefits of globalization.
The report highlights the commissions' continued focus on poverty eradication throughout the year, particularly in the perspective of follow-up to the Millennium Declaration. The commissions have also addressed important policy issues concerning health, notably HIV/AIDS and education. Information and communications technologies (ICT) also remains a high priority on the agenda of most commissions. Likewise, gender equality continued to be a focus, revealing steady progress in mainstreaming gender considerations.
The second section of the report provides an overview of the procedural aspects of their work, including working methods and interaction among the commissions and the Council itself. It also contains an analysis of the commissions' practice in preparing draft resolutions, and in that regard, recommends that texts proposed for adoption by ECOSOC should identify areas and issues that have linkages and relevance to aspects of the work of other commissions.
The organizational documents before the Council include the session's annotated provisional agenda (document E/2002/100 and Add.1); status of documentation for the session (E/2002/L.8), the proposed programme of work for the substantive session (document E/2002/L.7) and the Secretary-General's letter on the themes for the high-level and coordination segments of the Council's 2003 session (document E/2002/49).
Those documents also include a list of requests from non-governmental organizations to be heard by the Council during the session (document E/2002/74). The Council also has before it a note from the Secretary-General on preparations for the high-level segment (document E/2002/CRP.2), which serves a background paper on the three round-table meetings and briefings held during the run-up to the session.
Another note on the dialogue on the outcome of the International Conference on Financing for Development and the meetings of the Development Committee and the International Monetary and Financing Committee (document E/2002/13) provides background on the Council's 2002 high-level segment with the Bretton Woods institutions and the World Trade Organization (WTO).
An extract from the report of the Committee on development policy on its fourth session -- on recommendations regarding the theme of the high-level segment of the Council's substantive session -- has not yet been released (document E/2002/L.9). That report highlights, among other things, the new challenges and threats to development facing Africa and the least developed countries posed by globalization and the ICT revolution. It also notes that because of those and other changes, human resources development has evolved into a much broader concept concerned with the development of relevant social capacities.
Several of the approaches and innovative actions suggested in the report include developing and capitalizing on synergies between health and education, securing universal access to integrated services, building innovative institutional frameworks, designing innovative financing schemes and forming global partnerships to deal with those challenges.
The Council also has before it a letter dates 21 November 2001 from the Secretary-General of the Intergovernmental Institution for the Use of Macro-alga Spirulina against malnutrition addressed to ECOSOC's President (document E/2002/3). The letter contains the agency's application for accreditation as an observer to the Council.
IVAN SIMONOVIC, President of the Economic and Social Council, opened the meeting by saying that the present session was designed to make the Johannesburg Summit on Sustainable Development a success. The priority issues were the eradication of poverty, the achievement of Millennium Development Goals and avenues for increasing investments in human resources development. Also, the Council would consider how to meet the challenges of globalization and how to increase its participation in conflict prevention and post-conflict peace-building. Its coordinating role between its functional commissions and the United Nations system would be strengthened, as its own cooperation with the General Assembly, the Security Council, the Bretton Woods institutions and the World Trade Organization (WTO).
The present global economic and social situation was unsatisfactory, he continued. Commitments had been undertaken at the highest level, and precise time frames had been established but delivery was unreliable. Implementation must be regularly monitored. The Council was the forum for bringing together development partners to set norms and guidelines, to link policy with operations and to give political impetus to development efforts.
Strengthening human resources was essential for meeting the challenges of globalization, he said. Human resources development was the way to stay on track for sustainable development. It was the way to empower individuals and put the future into their own hands. It was also key for eliminating disparities in development and for eradicating the roots of conflict and terrorism.
During this session, he continued, the Council would hold debates with heads of financial and trade institutions as part of its follow-up to the Millennium Summit and other conferences. The consultations would give shape to a new phase of cooperation based on strategic partnership.
Summarizing steps being taken to strengthen the Council, he said the Council's activities in the areas of conflict prevention and post-conflict peace-building would increase. The breadth of the Council's mandate and the inclusiveness of its work methods made it well-placed to mobilize international support to address those tasks. The Council could spur coordinated action by the United Nations system, international financial institutions, donors, regional organizations and other partners. It could mobilize the needed attention and resources to be proactive in promoting efforts to address the economic, social and humanitarian dimensions of conflict prevention and peace-building. Cooperation between this Council and the Security Council had improved greatly. During the present session, this Council should consider ways of increasing cooperation between the Security Council and the General Assembly.
KOFI ANNAN, Secretary-General of the United Nations, said the United Nations had been put to new tests in the past year. In 2001 -- less than five years after the Asian crisis and only one year after the adoption of the Millennium Declaration -- the world economy had suffered its biggest setback in a decade in the terrorist attacks of 11 September. The immediate effects of those attacks were well known, but their long-term effects were more difficult to evaluate.
The poor economies were paying the highest price for the economic downturn, he said. The statistics did not adequately capture the human suffering and misery generated at the level of the individual and the family. Only limited improvement was foreseen in the developing world for the current year. And the world economic outlook as a whole was plagued by an unusual degree of uncertainty.
Yet, the globalizing world offered unparalleled opportunities to achieve greater equity through more sustained and balanced growth, he continued. It was vital to seize those opportunities, and in doing so, it was essential to maintain particular focus on the needs of Africa, through initiatives such as the New Partnership for Africa's Development (NEPAD).
Based on the Millennium Declaration goals, the challenge was to achieve not only economic and social development today, but to make it sustainable for the children and grandchildren of tomorrow, he continued. The World Summit on Sustainable Development, which would open in Johannesburg next month, would test the ability of the international community to respond to both sides of that challenge.
The Secretary-General said that health and education were the twin pillars on which one must build the well-being of individuals, and thus a more healthy, equitable and peaceful world. They were mutually reinforcing: a healthy individual had a better chance of achieving his or her potential; and educated individuals had a better chance of remaining healthy, and contributing to the health and development of their family, community, and country.
For the past year or two, the importance of health had drawn increasingly higher-level attention in the international community, he said. Education, a prerequisite for health and development, deserved the same attention. Yet, despite some shining exceptions, the international community had not given it the priority it needed.
Education was the key to social and economic development, to peace and stability, and to democracy. Countries committed to universal education had been far more successful in escaping poverty, he added. It was also known that there was no tool for development more effective than the education of girls -- no other single intervention had the same wide-ranging impact on the economic and social progress of a country. And yet, out of the 120 million children who must be in school but were not, the majority were girls.
He concluded by saying that the year ahead would put the United Nations to the test. There was no time to lose if the United Nations was to achieve what had been promised by 2015. The United Nations must pass the test ahead and ensure that the resources of every individual were developed to build a healthier, better-educated and more equitable world.
PAUL H. O'NEILL, Treasury Secretary of the United States, said he had seen three investments in Africa that were vital to realizing human potential, and where a difference could be made today. They were: clean water, primary education, and fighting HIV/AIDS. One insight from his tour was that "we can help local and national efforts to bring clean water to many towns and villages fairly quickly." In West Africa for example, one organization had estimated that clean water and basic sanitation could be provided at a cost of about $17 per person, per year, over five years.
He said a prosperous future required that children enter school at an early age, and stay in school with well-trained teachers and adequate materials. He pointed out that it would cost only an estimated $18 million per year to buy one textbook for each of four core subjects for every primary student in Uganda. President Bush, he noted, was stepping up support to primary education in the continent and had committed to doubling funds for his African Education Initiative.
The need to invest in health care was nowhere "more urgent and more heartbreaking" than in the struggle against AIDS, he said. Prevention of the HIV contagion was the utmost priority. President Bush was putting resources into projects that were proven to achieve results. He had announced $500 million for the International Mother and Child HIV Prevention Initiative, among other pledges.
He said, "We are determined to focus our assistance where it would make a difference, and where it can, we have committed to do more." The United States would increase its core assistance to developing countries by 50 per cent over the next three years, resulting in a $5 billion increase by 2006.
He stressed the need to avoid creating the next generation of highly indebted poor countries. Essential investments in sectors such as health care and education should be funded by grants not loans. With the right combination of aid and accountability -- from both rich nations and poor -- "we can accelerate the spread of clean water, education and health care throughout Africa and the developing world."
Mr. Simonovic, the Council President, recalled that the purpose of the one-day policy dialogue was for the Council to exchange views with heads of financial and trade institutions concerning developments in the world economy and in international economic cooperation. Three themes would be considered today: the current situation, follow-up to the Monterrey conference on financing for development, and the role of human resources development in overall development, particularly in the areas of health and education.
Horst Köhler, Managing Director of the International Monetary Fund (IMF), said the Financing for Development Conference in Monterrey had produced an unprecedented common understanding about what it would take to overcome world poverty. First, the basis for everything was self-responsibility. Economic development required good governance, respect for the rule of law, and policies and institutions that created a good investment climate and unlocked the creative energies of the people. Second, on that basis, developing countries could rightly expect faster and more comprehensive support from the international community.
What was crucial now was to transform the Monterrey Consensus into concrete action and measurable results, he said. To establish proper accountability, the respective responsibilities of poor countries and their development partners must be more clearly identified. Emerging markets and other developing countries should stay the course of sound fiscal and monetary policies and structural reform.
Trade was crucial for growth, he said. There was no example of a developing country experiencing rapid growth without becoming strongly integrated into the world trading system. Trade liberalization was also an important element in crisis avoidance. The experience of Latin America, where trade links had lagged behind capital market links, illustrated that vividly.
In Monterrey, he said, he had made it clear that the IMF would play an active part in the effort to achieve the Millennium Development Goals. In his talks with leaders, business persons, and civil society in low-income countries, he had been struck by the willingness to take responsibility for tackling the home-grown causes of poverty. It was particularly encouraging that African leaders had made good governance, sound policies, and increased trade and investment the cornerstones of the New Partnership for Africa's Development (NEPAD).
Debt relief was an essential element in a comprehensive strategy for fighting world poverty, he said. The IMF and World Bank were working hard to make the enhanced Heavily Indebted Poor Countries Initiative (HIPC) a success. Today 26 countries were receiving debt relief under that initiative, with a total value of over $40 billion, and they were working hard to help other eligible countries qualify for HIPC assistance. To support countries that were trying to help themselves, official development assistance (ODA) must be increased, he added.
With a concerted effort, he said he was optimistic that goals could be achieved. The global economy was recovering, and the international financial system had demonstrated its resiliency. "Now we need to ensure that the defined concepts to facilitate sustained growth and reduce world poverty are implemented", he said.
RUBENS RICUPERO, Secretary-General of the United Nations Conference on Trade and Development (UNCTAD) said the fantastic image of people demolishing the Berlin Wall with their bare hands had become a major symbol of the exhilarating promise of the 1990s. That event opened an era aimed at abolishing all obstacles -- barriers dividing people, barriers dividing economies, the apartheid system, and the ideological confrontation of the cold war.
But 12 years later, he continued, the barriers were returning, and statesmen had begun discussing how to erect legal and political walls against economic refugees and poor immigrants. Governments were making plans for fences against suicide terrorists, and rich countries were raising new barriers to steel, agricultural and other sensitive imports. Moreover, not all walls were alike. Some formed a prison or a cage -- as in Berlin -- while others provided necessary defence of protection. But whether justified or not, such walls were almost always an admission of failure to find lasting solutions to problems at hand.
He said that mental barriers against unpleasant realities and immovable problems were some of the most insidious types of walls built. In Monterrey last March, many had tried to draw attention to the despair and suffering of the millions of Argentines being punished by the misdeeds of their Governments. Many urged prompt action to avoid the contagion. But now, three months later, the disease had spread to Uruguay, Paraguay, Brazil -- his own country -- and many other Latin American nations. In Argentina, the sense of hopelessness and abandonment was fast evolving into dark chaotic agony. While there were no simple answers or miraculous cures, in the face of such man-made catastrophes, the first and most urgent action should be to relieve the suffering and contain the damage.
He said that even after several episodes of painful crises in emerging markets, the international community still lacked a realistic strategy for dealing with financial instability and the debt problem. Just "muddling through" had cost Latin America the entire decade of the 1980s, and a similar lack of procedures had exposed Argentina. Uncertainty continued to surround the modalities of official intervention in the financial crisis, adding to the overall volatility. It was time to end ad hoc approaches and get on with genuine reform of the international financial architecture.
He said only multilateral action could effectively deal with the debt problem. Only cooperation among the major economic powers could deliver the degree of currency stability needed by developing countries to ensure that trade and financial flows complemented their domestic efforts. Trade had always been one of the channels for transmitting recessions in the industrial countries to the developing countries. That had occurred only last year, as the economic slowdown in the United States provided the central reason for the sharpest contraction in worldwide trade performance since 1982. More than ever, the international community needed a strong multilateral trading system and the successful delivery of the Doha promises to inject as much growth and development potential as possible into the negotiations.
The international development community had been most distressed by the recent threats to those promises, apparently arising from a series of disturbing protectionist measures, he continued. All must work to resist protectionism, but it was only the major trading powers that could make a difference by exercising responsible leadership. Among the main victims of inadequate world trading schemes were the commodity-dependent least developed countries (LCDs). Those nations were caught in a poverty trap, but UNCTAD's recent LCD Report 2002 argued that the way forward was with national policies that were development-oriented and outward looking. Such policies should seek to promote integration into the world economy through trade and investment.
He said those policies need to be complemented by increased debt relief, more effective aid, a renewal and recasting of international commodity policy and greater South-South cooperation. Concerning three challenges -- financial crises in Argentina and Latin America, the negotiation of a more development friendly trading system, and achieving the Millennium Declaration goal of slashing extreme poverty in the developing countries -- the world community needed decisive and responsible leadership from those with the power to create a tolerant, pluralistic and generous multilateral agenda. It was much better to take that road than to put up more trade walls and financial fences.
MAMPHELA RAMPHELE, Managing Director of the World Bank, said the international processes stemming from the Millennium Declaration and more recently from the International Conference on Financing for Development had provided a substantial common ground for the international community, including the Bank, on which to begin building an edifice for effective development. This edifice was based on a series of fundamental building blocks for "staying engaged" in a forward-looking, implementation-oriented manner.
Dr. Ramphele identified three of those building blocks as first, the set of Millennium Development Goals; second, the emerging "global development compact"; and third, implementation of goals as the path to development effectiveness.
The Millennium Development Goals (MDGs), she said, provided an additional mandate for accelerating work in many areas related to the link between economic growth and human development. The "global development compact" was an evolving common understanding among national governments of industrialized and developing countries, exemplified in the Monterrey Consensus. Implementation implied country-owned development, coherence, accountability measured through solid analysis, effective monitoring and clear, attainable short-, medium- and long-term targets.
While the MDGs offered a profound organizing principle, she said, they meant nothing if they were not realistically implemented. "Goals cannot be imposed on countries. Countries must set their own goals and take responsibility for setting strategies to achieve them," she stated. Monitoring and public reporting on progress toward the goals was needed for both national policy purposes and for increasing international support for development cooperation. Many developing countries would need technical and financial support to improve their policies, enhance their implementation capacity and develop their systems for producing and analyzing statistical information for monitoring progress.
Dr. Ramphele further observed that donors would need to come up with additional support and improve their coordination of programmes, policies and procedures. She said the Bank's Development Committee, which was the intergovernmental body for consensus-building on development issues, had endorsed the new Action Plan to Accelerate Progress Towards Education for All (EFA) paper prepared by the Bank in consultation with countries and partners. The EFA paper outlined a new and comprehensive approach for addressing illiteracy by identifying data, policy, capacity and financing gaps.
In the broader context, the World Bank, in consultation with national and international stakeholders, would undertake additional activities which would result in a better understanding and more timely implementation of policies in the areas of communicable diseases within the framework of sustainable health-care systems. The linkage between economic growth and investments in human capital could set in motion a "virtuous circle" of improvements that reduced poverty and increased well-being, she went on. Social protection was essential to the development of critical population groups, especially the growing millions of orphans and disabled people.
She said the World Bank would utilize its various participatory approaches to country dialogue and country priority processes to promote improved results through quality public expenditures for social services. That required long-term engagement with countries on budgetary issues and policies which related to the quality of social services.
The upcoming World Summit for Social Development in Johannesburg was as symbolic for Africa as it was substantive for the whole world. In line with the assessment of the international community, the World Bank recognized the need to increase the coherence and impact of its approach to the MDGs in Africa, she said.
She concluded by stressing that partnerships should be central to all activities undertaken by the development community because without it, "none of us can go it alone with this ambitious and critical agenda."
MIGUEL RODRIGUEZ MENDOZA, Deputy Director-General of the World Trade Organization (WTO), said that at Doha, ministers had agreed that the removal of trade barriers must move ahead, that their economies must continue to open up, and that international trade must be governed by multilaterally agreed rules. The challenges lying ahead were enormous, he said. On the positive side, there were some encouraging developments. First, machinery had been put in place for the negotiations. Second and even more importantly, WTO members were fully engaged in the negotiations. There was an unprecedented participation by all countries, developed and developing. In the negotiations on agriculture, for instance, more than 150 proposals and other written contributions had been presented so far. Third, as the Doha negotiations moved ahead, WTO was implementing an extensive mandate on technical assistance and capacity building, seeking to support developing country members.
Success in the negotiations would go a long way in stimulating economic growth and reducing poverty, in areas such as market access conditions for industrial goods or in agriculture, he said. Agriculture was the backbone of almost all developing economies, yet, massive agricultural support in the OECD countries undercut the developing countries' exporters and forced even the most efficient producers out of markets where they would otherwise be earning their living. A truly significant result from the Doha negotiations for developing countries was therefore reform of agricultural trade. However, developing countries must also be frank with each other about the significance of liberalizing trade amongst themselves, he said. South-South trade in the 1990s grew faster than world trade and now accounted for more than one third of developing country exports. Yet, many trade barriers remained in developing countries and the quicker those walls came down, the quicker would be the return to all developing countries. The Doha negotiations offered an appropriate framework to make this happen, he said.
There were also challenges, he stressed, including protectionist pressure groups that continued to exercise their influence in some of the world's leading economies. Protectionist measures were damaging and economically wasteful, and they further undermined the ability of governments everywhere to build support for market-oriented reforms.
There were also new, systemic challenges, he said. The Doha negotiations were conducted among more than 170 governments, with different sizes, levels of economic development, trade interests and negotiation capacities, he said. Some developing countries felt ill at ease with negotiating new obligations. There was regrettably significant scepticism regarding the ability of many of them to participate in negotiations and harvest the potential benefits. However, the WTO remained optimistic. "We know we urgently have to move forward, firmly resist protectionism and fulfil the Doha mandate." That contained the prescriptions of how to develop and strengthen the multilateral trading system to the benefit of the poor.
BRIGITA SCHMOGNEROVA, Executive Secretary of the Economic Commission for Europe (ECE), spoke also on behalf of the Economic Commission for Africa (ECA), the Economic and Social Commission for Asia and the Pacific (ESCAP), and the Economic and Social Commission for Western Asia (ESCWA). From the perspective of the regional commissions, she said all regions had experienced a slowdown in economic growth. The drop in the rate of growth had been lowest, however, in the CIS countries had suffered the least drop in growth. Their economies in transition had undergone reforms that were starting to pay off.
Exchange of Views
The representatives of Zimbabwe, Gambia, Finland, Russian Federation, Mexico and Pakistan took part in the first round of the dialogue. They asked questions about the persistence of poverty despite the many development initiatives undertaken. What was the point of the commitment made recently by the Group of Eight (G-8) in Canada when many countries didn't even pay their ODA commitments? Could a common international mechanism be developed to support international trade capacity? How could the Doha round promote development objectives? What could be done to implement the Doha promises, particularly regarding to the need for richer countries to be credible as preachers and promoters of free trade? Could a code of conduct be developed to address the conditions that donors imposed on aid recipients?
Further, money laundering had become an important component in the fight against terrorism. What role did the institutions play in countering financial crimes? Since health and economic growth were related, what initiatives could be taken on an international level to address the relationship between national Ministries of Health and those of Finance?
Mr. RICUPERO of UNCTAD said the best achievement of Monterrey had been to put the many development problems into a common agenda with the major institutions addressing them. In all situations of monetary and financial crises, the first step was to address urgent problems and then rebuild financial systems. All agencies worked together. The IMF had the jurisdiction and expertise to help countries. UNCTAD's role was to advise them. Financial volatility was a problem worldwide, and the political element made such situations dramatic. Two priorities were to prevent crises and also to manage them. For developing countries, the need was to find an orderly way of creating an exit from their debt burdens. The IMF had offered creative ideas on that matter, and they should be examined.
Concerning a code of conduct for donors, he said there should be a way of monitoring donor performance. Delays in delivering on commitments were exacerbating problems in some situations. In the United States right now, there was a Trade Promotion Authority bill in the House and Senate. It offered the minimum reduction possible in tariffs on foreign products. Many of the products on the list were agricultural. All were products of interest to third countries.
A mistake had been made in Doha, he said. There should have been a commitment made that once negotiations had begun, no country could add more restrictions than already existed. If that commitment had been made, there would be some grounds for not allowing new barriers. Countries were negotiating by new rules rather than what had been agreed in Doha. The WTO was servicing the negotiations. It had different considerations than UNCTAD, which tried to advance the cause of the poor countries, including advising them on matters such as how to deal with import restrictions in Europe.
In the health area, countries such as the United Sates were at the forefront in terms of people coming to use the services available. Some countries such as Jordan, however, were also important regional centres for health. The recent sickness of protectionist measures did not bode well for making advances, either in trade areas such as agriculture or in developing new standards in measures of protection. It was time to react. Poor countries needed multilateral trade agreements but they didn't have much power. Protectionism was bad for developing countries. It was also bad for industrial countries because it gave a minimum market for them in the developing countries.
HORST KÖHLER, Chairman of the Executive Board and Managing Director of the International Monetary Fund, said that the Fund was in a process of change and reform and it was his intention to carry out the work of the IMF Board in a spirit of cooperation, enabling countries to face their own responsibilities yet allowing all countries to be heard, based on consensus-building.
Responding to the representative of Argentina, he accounted for the meetings held in Argentina, which had been productive. Dialogue and discussion would continue in the areas of finalization of the fiscal framework, addressing the problems of the banking sector, effective monitoring, and in increasing the confidence of the Argentine people.
Concerning the statement made by the representative of Gambia, he said the Fund needed to stick to some focused conditionalities. However, the Fund was in a process of streamlining conditionalities and setting new priorities.
The representative of the Russian Federation had referred to money laundering, and Mr. Köhler said that the Fund was very active in the fight against money laundering and terrorism. Recently, an action plan had been set up in cooperation with the World Bank, and focusing on legal and institutional basic standards to prevent money laundering. The Fund could however, not get involved in law enforcement.
Dr. RAMPHELE of the World Bank said the Bank was concerned with creating the right climate for investments. That required the greatest cooperation between all actors, including the private sector. The Bank placed a priority on involving all players. For example, it was working with the World Health Organization (WHO) and with heads of pharmaceutical companies on projects in a number of countries. It also put a priority on combining short-term assistance with long-term development strategies, particularly in post-conflict situations. The Bank had a presence in countries with economies in transition. Its visibility in Africa was the highest, however, since that country's need was the greatest.
Mr. MENDOZA, Deputy Director-General of the World Trade Organization, said, regarding the comments of the representative of Finland, that technical cooperation and capacity-building were becoming part of WTO's core activities. Following the Doha Ministerial Conference and the commitments made there, the WTO was moving forward with those commitments and starting to implement them. They were being implemented in cooperation with international and regional organizations. There was a particular focus on helping developing countries to increase their participation in the Doha negotiations. Certainly, there was room
for improvement, and he believed that many of the ideas mentioned by the representative of Finland would find themselves in the negotiations.
Concerning the comments of the representative of Pakistan, Mr. Mendoza said there were still many important questions to be answered. The prospects for the negotiations were optimistic -- developing countries were playing an active role. He did not share the view that developing countries were marginalized in the negotiations, in fact, there was an increasing and active participation of developing countries in the discussion.
Concerning the link between trade and public health, as brought up by the representative of Mexico, he said that a joint study carried out recently by the secretariat of the WTO and WHO had reached conclusions which ran against the general perception on these issues. One conclusion had been that countries at the national level must ensure greater coherence between their trade officials and health officials.
Asking questions in round two of the dialogue were the representatives of Suriname, Guatemala, Malaysia, Nigeria, Ghana, Argentina and Bolivia. Did the Economic and Social Council intend to harmonize questions of development and financial resources? Since access to markets for many developing countries was one of the key elements in the lack of development, what did the WTO and UNCTAD think about regional free-trade zones? Could this mesh with the rules of the WTO? What impact could this approach have on the Doha negotiations?
Also, while conditionalities had to be imposed, to what extent would the agencies let the aid countries set up their own goals? What about conditionalities such as good governance and transparency when some developing countries' funds were tied up in developed countries? To what extent would the IMF and the World Bank encourage budget support and poverty eradication programmes to ensure timely results? Were the two agencies prepared to engage in assessments of both donors and recipients? How could the Heavily Indebted Poor Countries (HIPC) question the evaluation process in their countries? How could the HIPC issue be linked with the trade issues?
HORST KÖHLER, Chairman of the Executive Board and Managing Director of the International Monetary Fund, responded again to some of the questions raised and said, concerning social spending, that there could not be social spending everywhere, priorities needed to be set. The IMF was supporting social spending but in the context of sustainable macroeconomic development. The IMF had for some time underestimated the importance of targeted social safety nets; however, this situation was changing rapidly. In response to the query of the representative of Nigeria, he said there should be some kind of support for such situations. He added that the IMF Board of Directors was currently negotiating on new guidelines for conditionalities; however some kind of conditionality was needed, if only in terms of credibility.