Financing for Development (FFD) Monterrey, Mexico March 18 - 22, 2002

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Financing forDevelopment
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On 22 March 2002, Heads of State gathered in
Monterrey, Mexico, to address the challenges of
financing for development around the world,
particularly for developing countries, at the
first International Conference on Financing for
Development.
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What are the major challenges of Financing for
Development at the national and international
level?
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Leading Actions

• Mobilizing Domestic Resources
• Mobilizing International Resources
• International Trade
• International financial Cooperation
• External Debt
• Addressing Systemic Issues

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Mobilizing domestic FinancialResources

• Countries with extreme poverty adopt and begin to
  implement, no later than 2006, a national
  development strategy bold enough to meet the
  Millennium Development Goals by 2015

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Mobilizing international resources

• A high proportion of foreign direct investment
  should be directed to low-income countries and
  foreign direct investments positive contribution
  to their development should be ensured

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DESPITE HIGH LEVELS OF FDI, NET RESOURCE
TRANSFERS HAVE BEEN NEGATIVE FOR 7 CONSECUTIVE
YEARS
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NET TRANSFER OF FINANCIAL RESOURCES FROM THE
DEVELOPING TO THE DEVELOPED WORLD

• Net outward transfers of financial resources have
  been increasing steadily in developing countries
  since 1997 and reached an estimated 350 billion
  in 2004.
• The net outward resource transfer from developing
  to developed countries is usually considered to
  have a negative impact on domestic growth since
  the net export of goods and services reduces the
  resources available for domestic consumption and
  investment.

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• The improvement in net private flows, while
  substantial was not sufficient to offset the net
  outflows.
• This negative transfer is partially reflected in
  a record increase in international reserves.

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International Trade as an engine for development

• Recognizing the links between trade, development
  and finance, a more open, equitable, rule-based,
  predictable, non-discriminatory and equitable
  multilateral trading system is critical to
  exploiting the potential of trade to act as a
  source of financing for development.

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Increasing international financial and technical
cooperation

• Official Development Assistance is increasing in
  nominal terms but more needs to be done to
  increase assistance to ensure the financing
  required to attain the
• Millennium Development Goals.

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 OFFICIAL DEVELOPMENT ASSISTANCE PLEDGES AND
REALITY
agreed target
Average Aid
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Debt Sustainability

• Three decades of debt crisis has engulfed most of
  the worlds developing countries at the cost of
  millions of lives.

Allow countries to meet MDGs by 2015, without
accumulating unsustainable debt
ratios. Secretary-General
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External Debt- Foreign Debt Service Payments In
Billions Of US
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Addressingsystemic issues

• Enhancing the coherence and consistency of the
  international monetary, financial and trading
  systems in support of development

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• Create the political will to enhance developing
  countries sense of responsibility and domestic
  ownership of their own development by providing
  them with a more equitable voice and
  participation in the institutions that take the
  decisions that affect their development prospects.