Thematic Debate
AM Session
LDC/ISTANBUL/5
10 May 2011
HIGH-LEVEL THEMATIC DEBATE CONSIDERS RESOURCE MOBILIZATION TO BREAK LOGJAM
IN DEVELOPMENT, AS LEAST DEVELOPED COUNTRIES CONFERENCE CONTINUES
Prodigious existing domestic and international flows of funds, as well as
innovative financing methods, must be harnessed to fill the huge gap in
infrastructure and human resources suffered by the poorest countries, a highlevel panel said this morning at the Fourth United Nations Conference on the
Least Developed Countries in Istanbul.
“Massive investments in infrastructure, human resource development and the
enhancement of productive capacity were essential to break the logjam in
development,” said Meles Zenawi, Prime Minister of Ethiopia, during a high-level
interactive thematic debate, entitled, “Resource Mobilization for Least
Developed Countries Development and Global Partnership”.
Delivering the keynote address this morning, Mr. Zenawi was joined on the
dais by Kabine Komara, former Prime Minister of Guinea and Adris Piebalgs,
Commissioner for Development of the European Union. Upendra Yadav, Deputy Prime
Minister and Minister for Foreign Affairs of Nepal and Ingrid Fiskaa, Deputy
Minister of International Development of Norway co-chaired the discussion.
Because of the enormous sums needed, no traditional sources -- neither
Official Development Assistance (ODA), foreign direct investment nor domestic
revenues -- were by themselves sufficient to bridge the gaps in development, but
all were crucial, the panellists and co-chairs agreed.
Uncollected tax revenues, vast amounts of trade surplus savings,
remittances sent back to countries by migrants, funds from programmes meant to
encourage sustainable development and to mitigate the effects of climate change,
monies lost through corruption and illicit trade, profits from extractive
industries -– all must be channeled towards increasing productive capacity and
providing the social services needed to increase human resource capacities in
least developed countries, they stressed.
Mr. Zenawi pointed out that to maximize domestic resources, technical
assistance also was needed, but political will was crucial to recoup uncollected
taxes and get domestic financial mechanisms in order. “The ability to collect
taxes goes to the very heart of the legitimacy of every Government,” he said.
He said that even with greater tax collection, international investment
would still be needed, and for that reason it was critical to overcome problems
faced in both the quality and quantity of ODA. Policy reform was certainly
critical to attracting foreign direct investment, but there again, he felt it
was necessary to address the bottlenecks in infrastructure and productive
manpower through investment in physical infrastructure and education and
training.
In utilizing other funds, he stressed that those garnered through climate
change initiatives were particularly important, suggesting that least developed
countries could pioneer green development that would serve humanity as a whole,
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by both developing in green ways through the use of innovative technology and by
creating major carbon sinks through enhanced United Nations REDD (Reducing
Emissions from Deforestation and Forest Degradation) -- plus programmes. In
those areas, it would only be fair if poor countries were paid for environmental
services rendered.
Among other areas, Mr. Zenawi emphasized that global imbalances caused by
countries having massive trade surpluses could also be remedied by investment in
the productive capacities of least developed countries. “Trillions of dollars
of savings that have not found productive outlets are milling around the
financial centres of the world, contributing to extreme variability in commodity
prices,” he stressed.
Mr. Komara stressed the need to leverage available funds through greater
synergy created by development partnerships, both intra-country and intercountry. Subregional cooperation must be pursued in order to better enable
countries with similar problems to pool their resources. Public-private
partnerships, partnerships between developing countries, and partnerships
involving the international financial institutions should all be focused on
helping to increase the productive capacities of the least developed countries.
Mr. Piebalgs said that ODA was still key when well-directed, and the Union
was well on the track to achieving 0.7 per cent of gross domestic product (GDP)
in its contributions. Innovative sources of financing were also crucial, he
said, affirming that it was particularly important that funds for climate change
and biodiversity programmes be put to best uses. He emphasized that in all
areas, transparency was critical, particularly in ensuring that the benefits of
extractive industries benefited all citizens.
Following those presentations, additional panellists and discussants
weighed in on the subject of the mobilization of resources. Panellists
included: Anthony Lake, Executive Director of the United Nations Children’s
Fund (UNICEF); Ngozi Okonjo-Iweala, Managing Director of the World Bank; Hugh
Bredenkamp, Deputy Director of the Strategy, Policy and Review Department of the
International Monetary Fund;
Other panellists were: Jon Lomoy, Director of the Development Cooperation Directorate of the Organization for Economic Cooperation and
Development; Carola Donner-Reichle, Senior Adviser of the Asian Development Bank
and Ohashi Masaaki, Chairmann of the Japan Non-Governmental Centre for
International Cooperation.
Panellists noted that in the current economic climate, it was necessary to
apply resources to the areas that would get the greatest results, and to both
bring in new sources of financing and leverage all income flows. “The situation
was now so urgent that we really need to stretch our minds,” said Ms. OkonjoIweala, noting that some countries had been able to find ways to better channel
migrants’ remittances and to leverage funds from non-traditional donors,
including South-South sources.
Discussants from the floor also affirmed the importance of strengthening
political will at all levels, particularly in regard to the mobilization of tax
revenues that remained untapped and to the provision of international aid. In
the area of ODA, it was stressed that producing good results from assistance was
key to increasing both the quantity and quality of such aid. Speakers
frequently returned to the need to channel whatever resources were available to
sustaining economic growth.
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In the final part of the discussion, the importance of generating savings
through self-sufficiency in such areas as food commodities was noted by some
speakers. Others described programmes to provide technical assistance to help
developing countries strengthen their collection of tax funds and fight
corruption. Innovative financing should come out of the activities of
globalization, France’s representative said, reiterating that country’s support
for a tax on financial transactions that could provide financing for development
that was both significant and predictable.
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