Twitter Facebook Flickr Youtube RSS Share

Financing for development

The debate about financing for development has evolved considerably over the last 50 years. During the first decade of the 21st century, the international community began to think about expanding sources of financing for development assistance, beyond Official Development Assistance (ODA).

This change is reflected in the Monterrey Consensus, which resulted from the Monterrey and Doha Conferences (1). The UN reviews the implementation of this consensus within the framework of the Monterrey process (2). This follow-up process is currently actively discussed in the run-up to the summit on the post-2015 development agenda (3). France is taking an active role in this effort (4).

Current status of financing for development

- On 14 and 15 April 2014, the Economic and Social Council held its annual special meeting with the International Monetary Fund (IMF), the World Bank, the World Trade Organization (WTO) and the United Nations Conference on Trade and Development (UNCTAD). The meeting provided an opportunity to exchange views on the economic and global financial situation, the financing of the future the post-2015 development agenda and the ongoing preparation of the follow-up conference to the Monterrey and Doha conferences on financing for development.

- On 7 and 8 October 2013, the sixth high-level dialogue on Financing for Development was held at UN Headquarters.

The goal of this dialogue was to continue the follow up of the implementation of the Monterrey and Doha Conferences. It also provided food for thought on the financing of the post-2015 development framework.

On this occasion, France presented its position on the financing for development. While emphasizing the key role of official development assistance (ODA), it called for expanding the circle of donors. It also stressed the importance of improving the mobilization of domestic resource, called for a greater involvement of private actors and emphasized the importance of a more effective cooperation, on the basis of the Busan Global Partnership principles.

France also recalled the potential of innovative financing to mobilize additional resources for official development assistance. It called on States to use the different tools discussed in many fora, in particular in the Leading Group on Innovative Financing for Development, to scale up the implementation of these mechanisms.

1. The Monterrey Consensus: from the Monterrey Conference to the Doha Conference Retour à la table des matières

a) The Monterrey Conference

The Monterrey Conference, which was held in Mexico in 2002, was aimed at looking at ways to maximize resources mobilized for development – notably with respect to achieving the Millennium Development Goals (MDGs) defined in 2000.

The conference took place in an international context still marked by the attacks of 11 September 2001; it allowed the “spirit of Monterrey” to emerge, characterized by the following aspects:

- Developing countries recognized their primary responsibility for their development and commited to establishing the conditions for good governance and the creation of an enabling environment for investment.

- The donors, while making substantial financial commitments, underscored the complementary nature of the different types of resources available and the need to ensure an effective use of aid and to monitor its impact.

- The participants reaffirmed the key role played by the UN as an important forum for developing the concepts of development cooperation and at the same time, the need to strengthen coherence between UN activities and those of the international financial institutions.

– The conference resulted in the adoption of the Monterrey Consensus which still remains an essential reference today and one of the most comprehensive texts on development.

This text made it possible to endorse a renewed approach to cooperation, based on strengthened partnerships and greater accountability on the part of all stakeholders (states, international organizations, civil society and the private sector). It is based on 6 mutually reinforcing pillars:

1. Mobilizing domestic financial resources for development.
2. Mobilizing international resources for development: foreign direct investment and other private flows.
3. International Trade as an engine for development.
4. Increasing international financial and technical cooperation for development.
5. External Debt.
6. Addressing systemic issues: enhancing the coherence and consistency of the international monetary, financial and trading systems in support of development.

(b) The Doha Conference

– The Doha Conference, held in 2008, reviewed the implementation of the Monterrey Consensus, taking into account the profound changes in the international context since 2002. France, which held the presidency of the EU, played a very active role.

In Doha, the international community noted that developing countries were experiencing increased growth and that global poverty rates were falling, as a result of the instruments mobilized in Monterrey (increased international trade and direct foreign investments, debt cancelations, doubling of Official Development Assistance, creation of innovative mechanisms for development financing, notably on France’s initiative, and increased migrants’ remittances).

But it also expressed concern about the persistence of major disparities between countries and within countries and the fact that Africa is lagging behind other regions that are catching up (Asia and Latin America in particular).

Furthermore, the conference took place in an international context marked by profound changes, which the participants intended to take into consideration in their development cooperation:

- The global economy suffered a major economic and financial crisis and the increased commodity prices’ volatility, which led to further disparities, raised the issue of resource sharing.

- The emerging economies have asserted themselves as new players who are still aid recipients but are also sometimes donors (South-South cooperation), reflecting the emergence of a multipolar environment challenging the traditional North-South divide. The emergence of new lenders raised the question of debt regulation in developing countries. In commodity-exporting countries, sovereign funds have emerged, with an increasing economic role. The donor world has also diversified, as a result of the growing role of major foundations and thematic vertical funds. The main donors have made new commitments with respect to aid effectiveness.

- The need to take climate change into consideration and the importance of migration (migrants’ remittances) has gradually emerged and discussions about global public goods have been initiated.

– In this context, the Doha Declaration, while recognizing the progress achieved, underscores the new challenges and places more emphasis on social, environmental, and climate issues – in accordance with the growing importance of the concept of sustainable development.

With respect to development cooperation, it underscores both the need to increase the volume of Official Development Assistance and the importance of domestic financial resources in developing countries (requiring greater efforts to fight against corruption and tax fraud). It strongly emphasizes systemic issues (regulation and transparency of the financial sector, World Bank and IMF reforms, increased participation of developing countries in global economic governance). It recognizes the principles adopted with respect to aid effectiveness and the success of innovative financing. It underlines the need to take into consideration the diversity and specific characteristics of developing countries, especially in the case of Africa.

2. The Monterrey Process: the review of the implementation of the Monterrey Consensus at the UN Retour à la table des matières

The Monterrey process relates to the review of the implementation of the Monterrey Consensus by two UN intergovernmental bodies: a) the General Assembly; b) the Economic and Social Council. Within the Secretariat, the Financing for Development Office supports this process.

(a) General Assembly

– The General Assembly conducts a debate on financing for development every year under the relevant agenda item; at the end of this debate it adopts a resolution.

During the 68th session, it adopted resolution 68/204 deciding in particular the holding of a follow-up conference to the Monterrey and Doha Conferences. Consultations are currently under way within the General Assembly to establish the mandate, date and modalities of this conference.

– Since the Monterrey Conference, the General Assembly has held a high-level dialogue on financing for development every two years. The 6th high-level dialogue took place in New York from 7 to 8 October 2013.

(b) The Economic and Social Council (ECOSOC)

– Every year the Economic and Social Council adopts a resolution on financing for development which implements the major guidelines defined by the General Assembly (see above). The main contribution of the most recent resolution adopted by the Council (2013/44) is to establish a clear link between the Monterrey process and the work under way on the financing of the post-2015 development agenda (see below).

— ECOSOC also organizes high-level meetings which provide an opportunity to address the issue of financing for development. The most important meeting is the Spring Special high-level meeting of ECOSOC with the Bretton Woods institutions, the World Trade Organization and the United Nations Conference on Trade and Development. The last such meeting took place in New York on 14 and 15 April 2014.

Other meetings provide an opportunity to address financing for development, in particular the meeting devoted to international cooperation in tax matters, allowing for discussions on ways to build and strengthen national fiscal capacities and the mobilization of domestic fiscal resources for development. The last such meeting took place in New York on May 29, 2013. Resolution 2013/24 of the Council provided that this meeting would be held on an annual basis.

3. Financing the post-2015 development agenda Retour à la table des matières

Within the framework of the work under way to define a post-2015 development agenda, the issue of financing is once again at the heart of the debates. The Intergovernmental Committee of Experts on Sustainable Development Financing plays an especially important role.

This committee was established by the General Assembly (decision 67/559) in accordance with paragraph 255 of the Outcome Document of the UN Conference on Sustainable Development (Rio, 20 to 22 June 2012) and is composed of 30 experts appointed by the five regional groups of the UN.

Its mandate is to “assess financing needs, consider the effectiveness, consistency and synergies of existing instruments and frameworks, and evaluate additional initiatives, with a view to prepare a report proposing options on an effective Sustainable Development Financing Strategy to facilitate the mobilization of resources and their effective use in achieving sustainable development objectives.”

The committee is due to submit the report in September 2014; the report will be an important input to the preparation of the post-2015 development agenda.

France is represented on the committee by Mr. Anthony Requin, Head of the Multilateral Affairs and Development Department at the Directorate General of Treasury.

4. France’s involvement Retour à la table des matières

France intends to play an active role within these various bodies.

Building on the Monterrey Consensus, France supports the idea that all financial flows in support of development – whether public or private, domestic or international – must be taken into consideration in a comprehensive approach to financing for development.

While underscoring the centrality of Official Development Assistance, which must play a catalyzing role, in priority in Least Developed Countries (LDCs), it calls for the mobilization of all donors. It underscores the importance of improved mobilization of domestic resources, calls for greater involvement of private actors and stresses the importance of more effective cooperation, in accordance with the principles of the Busan Global Partnership.

France also underscores the potential of innovative financing to mobilize resources that are complementary to Official Development Assistance. It calls on Member States to consider the set of options discussed in several forums, notably within the Leading Group on Innovative Financing for Development, in order to scale up the implementation of these mechanisms.

(April 2014)

5. Reference documents Retour à la table des matières

- 20 December 2013 - General Assembly - Resolution 68/204 : "Follow-up to the International Conference on Financing for Development"

- 26 July 2013 - ECOSOC - Resolution 2013/44 : "Follow-up to the International Conference on Financing for Development"

- 12 December 2008 - General Assembly - Doha Declaration on financing for development

- 22 March 2002 - Monterrey consensus on financing for development

6. Useful links Retour à la table des matières

- Our web page on Innovative financing for development

- Our web page on Towards a more effective development cooperation

- Leading Group on Innovative Financing for Development website

- Intergovernmental Committee of Experts on Sustainable Development Financing website

Bookmark and Share
Bookmark and Share
Organisation des Nations Unies Présidence de la République France Diplomatie La France à l'Office des Nations Unies à Genève Union Européenne Première réunion de l'ONU