Mr. Vice President,
I would first like to thank the President of the General Assembly for organizing this High-level Dialogue on Financing for Development. This session, happening at the end of 2011, is of particular importance to us for three main reasons.
Firstly, in this interdependent world, marked by macroeconomic instability and chronic volatility, development is a key factor in the regulation of globalization and the coordination of economic policies aimed at accelerating world growth. That’s the main message that the G20 wanted to convey in Cannes. Development can no longer be seen as an isolated policy, with its dedicated instruments implemented by a limited club of donors. On the contrary, it’s a key element of the international economic agenda.
2011 was marked by two other highlights relating to development cooperation: firstly, the UN Conference on the Least Developed Countries in May in Istanbul. This was an opportunity to adopt an action plan for the next decade, aimed at ensuring that at least half of the LDCs graduate from this category. The 4th Forum on Aid Effectiveness was then held in Busan a few days ago and allowed us to lay the foundations of a new partnership for development, expanded to all partners (donors within the OECD Development Assistance Committee, emerging countries, private sector, associations) and which goes beyond the usual aid effectiveness agenda and includes development effectiveness.
Generally speaking, the traditional North-South divide is now out of date: in today globalized economy, development trajectories can be distinguished, new economic powers are emerging and developing countries face different situations. Furthermore, global challenges are becoming apparent and call for a coordinated response. Lastly, developing countries are clearly emerging as the new drivers of economic growth. We must therefore promote innovation, beyond the boundaries and traditional instruments of aid.
Secondly, France remains attached to the spirit of Monterrey and Doha and its integrated vision of financing for development - provided that it recognizes the changes that have shaped the world over the last 10 years - aimed at defining new boundaries of aid.
France promotes inclusive development, the core of which remains the mobilization of domestic resources. The transparency of tax systems and the strengthening of national capacities to collect taxes are in this respect critical. From this perspective, the fight against uncooperative jurisdictions is a key factor.
Official development assistance plays a critical role, particularly in the least developed countries and the agreed target of 0.7% of GDP remains essential. As you know, despite the crisis, French official development assistance reached a historic level in 2010, amounting to 0.5% of its GDP (equivalent to $13 billion, and 10% of global ODA); 18% of this aid goes to least developed countries ($1.5 billion).
But this isn’t enough. Developing countries need to mobilize all available resources in order to kick-start their development: through the private sector, trade, migrant remittances. That’s why the G20 has supported the economic growth of developing countries: by identifying the lack of infrastructure as the main bottleneck in Africa, by addressing food price volatility, by making research and agricultural innovation a central concern, by calling for the implementation of social protection networks, for compliance with standards that encourage investment in developing countries that creates added value and local jobs, by ensuring that the most vulnerable have access to financing and employment.
I’ll give you an example: for many developing countries migrant remittances constitute a major part of their income. In this respect, the G20 countries pledged to help reduce the total average transfer cost of migrant remittances. This will go down from approximately 9% today to 5%, making it possible to redirect more than US$15 billion to families back home.
In this context, innovative financing should supplement existing resources. More than 24 countries already use it in addition to their aid in order to benefit from a source of stable and sustainable financing derived from activities that have benefited most from globalization. Almost $6 billion have already been raised through innovative financing since 2006; why not extend these best practices? This is one of the readily available key measures that can be taken to achieve the “scaling-up” that the United Nations is calling for. As you know France, together with the UN Secretary-General and several other partners, advocates for what we believe is the most promising mechanism in terms of volume and impact: a micro tax on international financial transactions which all of the experts believe to be technically feasible. In addition to the countries that supported a tax on financial transactions for development in Cannes, a coalition of partners has been established, notably under the auspices of the Leading Group, in order to ensure that this ambition will not sink without trace. Believe me when I say that we are determined to make progress in this direction. The developing countries must make themselves heard with respect to this issue.
Finally, in the context of the current crisis, we must make our aid more effective.
That’s the whole purpose of the OECD’s initiatives on the effectiveness of aid. France welcomes the agreement concluded in Busan aimed at strengthening the commitments made in Accra and Paris and implementing a “new global and inclusive partnership for development.” It will continue to be committed to achieving a less fragmented, more transparent form of aid, with an underlying management strategy focused on the impact of aid on development and the need to respond in different ways depending on the partner.
The reform of the UN’s operational activities for development through the Delivering as One initiative is also part of this determination to rationalize the provision of aid at the heart of the UN system, and we should welcome this.
Mr. Vice President,
Gone are the days when development and its financing were the exclusive preserve of the G7 powers. We must now recognize our shared responsibilities. The G20 affirmed this by reiterating that this was a “concern and a duty to all G20 countries.” I will conclude by underscoring the UN’s essential role in promoting renewed dialogue on the goals and means of development. We will only be able to respond to current development challenges with the help of all States: achieving the MDGs, financing sustainable development, finding ways to address climate change. The Rio +20 Conference and the review of the MDGs in 2013 will be critical in this respect. We want to promote innovation including in the final declaration and in conjunction with all of the forums concerned by development challenges.