The following statement was delivered by civil society organizations speakers on Monday, 27 April 2009 at the ECOSOC High Level meeting with the Bretton Woods Institutions, the World Trade Organization and the United Nations Conference on Trade and Development. The ECOSOC meeting is expected to provide inputs into the preparatory process for the June UN General Assembly meeting on the World Financial Crisis and its Impact on Development.

STATEMENT BY THE DOHA NGO GROUP ON FINANCING FOR DEVELOPMENT

Introduction:

This statement has been developed on the basis of the policy positions put forward by the Doha NGO Group on Financing for Development at the International Review Conference on Financing for Development, civil society statements made at the ECOSOC panel discussion on “Civil Society Perspectives on the Financing for Development Agenda” (April 20, 2009) and the Civil Society Forum (April 26, 2009). Coupled with it is the statement of the Women’s Working Group on Financing for Development. Each of these organizations is a collaboration of a number of international civil society organizations and networks. We also note that a number of these organizations have just participated in consultations related to the spring meetings of the World Bank and International Monetary Fund.

We express our appreciation for the preparatory note of the Secretary-General (E/2009/48), as well as the draft Recommendations by the Commission of Experts of the President of the General Assembly on reforms of the international monetary and financial system (A.63/XXX March 20, 2009)

With regard to Informal interactive dialogue of the whole on theme 1:

“Addressing the impact of the global financial and economic crisis on development, including issues related to the international financial and monetary architecture and global governance structures”

A. World Financial and Economic Crisis

Context and the role of the UN

This is the worst financial crisis that anyone alive has seen. We cannot accept business as usual response.

We see credible evidence that this is not simply a financial crisis but affects the lives of many peoples — the poor and marginalized particularly — south and north and the future of our planet.  It is likely to be long and severe.  Inflation is not the enemy, but deflation must be guarded against. Developing countries should have the resources which will enable them to implement domestic stimulus packages which prioritize social equity, decent work, gender equality and environmental sustainability.

We recognize that the crisis in liquidity is only one of several, the crisis in food prices affecting many acutely. The response to one must address the other.  We also recognize that climate change is a development issue with its effects threatening developing countries who are disproportionately affected, and that a shift to a low carbon economy should be integral to crisis response and stimulus packages.

We support the UN as the only forum to have the broad ownership, knowledge and political support required to provide a meaningful and comprehensive response in the face of the financial crisis.

We acknowledge the efforts by the Group of 20 leaders to reach consensus on some immediate measures to address the crisis. But the G20 is not politically representative of the international community.

Let us remember that the Group of 20 is not an organization or a body ( it has not even have legally agreed procedures to reach its decisions ! ) Therefore it is inappropriate to try to pose the question as an either/or between the UN and the G20. These two cannot be given the same status.

The United Nations has the political legitimacy to be pre-eminent decision-making body as envisioned in the Charter, in economic as well as security matters.  It is the legitimate coordinating body for specialized agencies and multilateral financial and economic organizations – including those currently involved in the Financing for Development Process, but also others like the Financial Stability Board – dealing with finance, development assistance and trade, as well as ensuring collaboration in tax matters.

The U.N. must regain the pivotal role in the development of a new global economic system and development architecture, which is based on human rights, integrating gender equality, women’s rights and recognizes the central role of the care economy..

A 1. We therefore appeal to delegates to ensure that the UN Conference on the World Financial and Economic Crisis and its Impact on Development is attended at the highest – Summit – level. Representation by all ministries implicated in the agenda would strengthen the result.

A 2. We support not only the convening of this Conference, but will work to ensure that it results in a secure ongoing follow-up process, ensuring implementation of its key conclusions.

A. 3 We trust that this Conference will not only result in agreements in text, but in the mandating of a number of ongoing working groups or commissions to carry work forward. (see below)

Recreating the international financial system is not merely a matter of legitimate and representative structures, but also of the content of policy.  We must insure that:
•    Counter-cyclical policy space and policy implementation is built into the operations of institutions and governments.
•    That the system is pro-development.
•    That it is inclusive, that it serves the small and medium actors as well as the large.
•    That integrates gender equality throughout

We recognize that the impacts of the global crisis are being felt in developing countries through trade and trade-related channels. Thus the Conference should examine the financial structures and dynamics that prevented developing countries from benefitting from exports in times of the boom, and are now acting as the main channels in these times of distress.

Further we note, with the Commission of Experts, “Many bilateral and multilateral trade agreements contain commitments that circumscribe the ability of countries to respond to the current crisis with appropriate regulatory, structural, and macro-economic reforms and rescue packages, and may have exposed them unnecessarily to the contagion from the failures elsewhere in the global economic system that many trade and investment agreements.”

We recommend that:

A. 4 Thus the Conference should examine the financial structures and dynamics that prevented developing countries from benefitting from exports in times of the boom, and are now acting as the main channels in these times of distress, and that it consider steps which will free countries from policy limitations imposed in trade and investment agreements which may impeded their ability to effective respond to the crisis.

B.  New foundations

This suggests that we need new foundations or frameworks.  The G-20 in paragraph 21 of its Leaders’ Statement, supported development of what was called a “charter for sustainable economic activity.”  This could become an excuse for endless debate, or it could become a moment akin to the launching of the Universal Declaration of Human Rights in 1948.

Further, it is crucial that the new global economic and development architecture be fully informed by and integrate gender equality, human rights – including women’s rights –
at its heart.

We recommend that:

B 1. the discussion of a global charter must take place in the only legitimate body to develop and endorse such a framework, the United Nations, and that

B 2. such a process be informed by long experience of U.N. related bodies like the International Labour Organization, by the results of the U.N. Conferences and their sequels (Beijing, Vienna, Copenhagen, Rio, etc.) but particularly by the vision and experience of the Covenant on Economic, Social and Cultural Rights, and the Convention on the Elimination of all Forms of Discrimination Against Women (CEDAW) and that

B 3. Such a process of development engage the voices and experience of workers, farmers and peasants, women, indigenous and many other sectors of wisdom and experience.

C.  A Global Council

The Commission of Experts, appointed by the President of the General Assembly has proposed the development of a Global Economic Coordination Council.  This idea has many pre-cursors from Ramphal and Carlsson, through Delors and Zedillo to the current day.  It is an idea whose time has come!   (Commission of Experts, March 19 Interim draft. para. 52)

C. 1 We recommend that the ECOSOC High-Level Meeting endorse this proposal and seek agreement on an ongoing mechanism for the full development of the Council at the June Conference.

The Commission of Experts has also suggested a related mechanism for integrated independent analysis on questions of global economic policy, including its social and environmental dimensions, which would offer advice to the General Assembly and the ECOSOC and ultimately to the Global Economic Coordination Council.  We understand this be a body of experts, including those from both official and non-governmental sectors and social movements, with attention paid to full representation of women and men.  It should be supported and informed by reinforced data collection and analysis from the various relevant elements of the U.N. system, an objective which was advanced in the Helsinki Process on global governance a few years ago. (Commission of Experts. March 19 Interim draft. Para. 44)

C.2 We recommend that the ECOSOC High-Level Meeting endorse this proposal and seek an implementing resolution at the June Conference.

D. Re-building multilateral financial institutions

A new Bretton Woods

There is great danger in entrusting significant or expanded roles in crisis-response to institutions which are held by many to be part of the cause of the breakdown.  To assign significantly greater resources and responsibility to the World Bank and the IMF, is simply ill-advised and illegitimate before reforming them in the way that the Monterrey consensus spelled out. The need for such reform was recognized again at the Doha Review Conference (Doha Declaration. Para 68.)

Legitimacy and proper governance are the first requisite for the proper financial architecture and any necessary expertise can be built later. Expertise alone, which is certainly not lacking in the Bretton Woods institutions, cannot do the job. That is why we recommend:

D. 1 the calling of a Second United Nations Monetary and Financial Conference.

Counter-cyclical policies now

In the meantime, countries need assurance that assistance with maintaining adequate credit will not depend solely or even considerably on loans, creating new debt loads and new conditionalities. Stimulus packages should be encouraged and designed with attention to the relief of poverty, the progressive re-distribution of resources and prioritizing investment in social infrastructure with a gender equitable framework. The fight against poverty is the best stimulus package, that should be applied in countries of the north and the south.

We are deeply concerned that policy conditionalities which have reduced national policy space and forced pro-cyclical policies with negative social consequences on developing countries continue to be administered by the Bank and the Fund.

We recommend that:
D. 2 Actions by executive directors in the IFIs should be taken to ensure a) that old pro-cyclical policies cease, that no policy conditionalities are imposed and that b) policy space by recipient governments to implement counter-cyclical policies with attention to positive social impacts is recognized and encouraged.

Action on tax now

Transparency and honest accounting are essential to good supervision and the building of trust in international economic relations.  We support the work of the U.N. Committee of Experts on International Tax Cooperation in such issues as transfer pricing.  We have long recommended the strengthening of the U.N. Committee of Experts into a more powerful inter-governmental body. The ECOSOC has been given responsibility to carry this forward, in the Doha Declaration which acknowledged “ the need to further promote international cooperation in tax matters, and request the Economic and Social Council to examine the strengthening of institutional arrangements, including the United Nations Committee of Experts on International Cooperation in Tax Matters. We believe the time for action is now.

We therefore recommend:
D. 3 that the ECOSOC inaugurate an Inter-governmental Committee on Tax Cooperation with a broad mandate.

* * * * *

With regard to: the informal interactive dialogue of the whole on theme 2:

“Strengthening of the intergovernmental inclusive process to carry out thefinancing for development follow-up”

The Doha Review Conference was supposed to deal with the follow up process, draw lessons and propose improvements. Instead, here we are: no improvement was actually adopted. The  Doha Review is not complete. A primary task for Doha, which was to review an essential element of the Monterrey Consensus, its follow up process, is pending. As long as it continues to be pending, it is hard to be optimistic about any of the other outcomes of Doha.

E 1 We recommend the current follow up process be replaced with a new institutional mechanism that has, at a minimum, 5 features:

a.    It should meet periodically and frequently (e.g., on a yearly basis).

b.    It should produce a negotiated outcome, moving from the current non-negotiated follow-up mode, to a negotiated follow-up mode. This does not diminish the importance of non-negotiating instances as a prelude to consensus-building, but the Monterrey follow up process can no longer be limited to those instances alone.

c.    It is already agreed in the Doha Declaration (para. 88) that the follow-up should engage the participation of Ministers of not only Foreign Affairs, but also Finance, Trade and development.  Only by having the broad consensus of the top counterparts of the main institutional stakeholders – IMF, World Bank, etc—can the FFD follow stay true to its multi-stakeholder nature.

d.    Civil society, including women’s groups, should be accorded a space as has been the case from the beginning of the Financing for Development process. We are aware that in order to ensure that the follow up mechanism produces a negotiated statement, there may be a need to have parts of it, especially the negotiating parts, where stakeholders that are not member states take a backseat and are allowed to observe, but are not recognized as a negotiating party.

e.    The periodic follow-up review should always includes a section devoted to exploring inter-linkages between two –or even three– selected chapters, in order to provide an incentive to the holistic and integrated consideration of all the sources of finance that was the hallmark of Monterrey.

E. 2.  We recommend that the General Assembly establish a Committee on Financing for Development

It would provide an intergovernmental counterpart for the Secretariat, as well as for the other institutional stakeholders, on day-to-day matters. We believe the appointment of such a committee would ensure more engagement and ownership of the follow-up process by the General Assembly.

There should also be an expanded Bureau that includes said Committee but also representatives of the other institutional stakeholders, including civil society and women’s groups, to offer a platform for the General Assembly to come together with representatives from the other stakeholders to sort out day-to-day tasks in follow up and preparation of the negotiations towards the periodic Ministerial Outcome in follow up to FFD.

ECOSOC, Financial crisis, Financing for Development