The UN process on Financing for Development – FfD - offers a unique opening for non-governmental organizations (NGOs) to advocate for a new multilateral consensus on how to manage global economic structures. The process is still open for people to get involved. NGOs are already beginning to work with each other, their governments, the UN system and other multilateral economic institutions to bring urgency and substance to the debate.

The formal process to prepare for the high-level consultation was launched this year, after two years of wide-ranging debate on the question of Financing for Development. During the 52nd General Assembly (1997-98), member states passed a resolution (reference number 54/196) calling for a dialogue on financing for development that was to culminate in a high-level event (conference or summit; they have still to decide) in the year 2001.

The following article updates an earlier fact sheet produced in April. It covers four areas: a brief note of background to the FfD event, a review of the agenda and process, and a note about events planned by NGOs and the UN, and then some thoughts on where the process could go. An updated list of contacts and a calendar of events is provided at the end.

In the 1990s, a series of events challenged the vision of development set out and implemented over the late 1970s and 1980s in the World Bank’s and IMF’s structural adjustment programs (SAPs) and loans. This vision dictated unregulated markets, the privatization of social services and a reduced role for the state. It was the vision behind the Uruguay Round Agreements, signed in 1994, which created the World Trade Organization (WTO).

In contrast, a series of UN summits held throughout the 1990s defined a comprehensive and progressive agenda for development. Although not perfect, they reflect quite a different set of development priorities from those reflected in SAPs. The conferences also engaged an unprecedented number of NGOs in multilateral work, particularly NGOs from the South.

At the UN summits, NGOs and governments challenged the vision of development inherent in SAPs. In so doing, they created a tension that has still to be resolved. The collapse of the WTO Ministerial Conference in Seattle last year, and the climate in which those negotiations took place with continual protests outside, was an indication of how profound the disagreement is on governance of the world’s economies. As inequalities within and between countries widen, the legitimacy of the current rules determining globalization have been called into question from all sides, including from critics within the Bretton Woods organizations themselves.

At the same time, relations between developed and developing countries are at low ebb. The collapse of trade talks at the WTO Ministerial in Seattle was in part a reflection of the anger developing countries felt at being ignored in the trade negotiating process. Sadly, the discussions in Geneva since show little sign that the developed countries have understood this concern.

The FfD discussion offers a way for the UN to reclaim its place as the appropriate forum for determining multilateral economic and social policy. It deserves serious attention and reflection from the NGO community, many of whom have long advocated for a strengthened United Nations to counter the so-called "Washington Consensus" on world economic policy.

In June 2000, the FfD PrepCom agreed a six-point provisional agenda for the high-level event:

• Mobilizing domestic resources for development

The formally identified stakeholders for the FfD are: UN Member and Observer States, the World Bank, the International Monetary Fund (IMF), the WTO, the UN Conference on Trade and Development (UNCTAD) and the UN regional commissions. A second tier of players includes other UN system agencies, funds and programs, organizations such as the Bank for International Settlements, the private sector and NGOs.

UNCTAD, with the regional development banks and regional commissions, is organizing regional meetings during the second half of 2000 (see the calendar for dates). The secretariat has proposed that non-governmental stakeholders be included in the regional meetings. The meeting for the Asia/Pacific region has already been held.

One complication for the FfD process has been how it should relate to the World Bank (WB), IMF and WTO. Cooperation with the World Bank is the most advanced. The agreed modalities for collaboration with the Bank are: 1) consultations between the FfD Bureau and the Executive Board of the WB, probably in relation to PrepCom meetings; 2) informal consultations between the Bureau and the WB Board to encourage contact among delegations at regional and national levels; and 3) the appointment of a team of senior staff from the WB to collaborate with the Bureau and work closely with the WB Board. Some WB staff are now working on loan with the FfD secretariat.

There are still outstanding questions to resolve on how the IMF and WTO will participate. Neither institution has found it easy to propose modalities for collaboration. In principle, each institution involved is to be responsible for a working group on an agenda item, but it may be that only the UN secretariat, with UNCTAD and the WB, play this role.

Each agenda item has a working group, composed of staff from the core agencies involved in the FfD process. They are to report their recommendations to the Secretary General’s office by 15 November. Their recommendations will be used to draft a single report, which will be submitted to the PrepCom as the Secretary General’s report on FfD.

NGOs are also invited to submit proposals to the working groups. November 15 is the deadline given for NGO proposals too, although a mid-October deadline is probably a better target, to ensure ideas get proper consideration. Proposals can be sent care of the FfD secretariat. Ideas on private capital flows in particular can also be posted directly at the web site (see contact information at the end).

The secretariat has set the following criteria for NGO submissions to working groups: inputs should relate to the scope of the agreed agenda; be brief (about 5 pages and not longer than 10 pages); focus on the specific experiences/lessons-learned/trends observed in the course of activities; and highlight policy directions that can be brought to the attention of the intergovernmental process.

NGOs and the private sector are also invited to participate in the following ways::

1. NGO participation in the PrepCom meetings and High-Level event. Accredited organizations can submit written statements to the PrepCom. NGOs in consultative status with the UN Economic and Social Council will be accredited automatically. Other interested NGOs and private sector organizations have to apply for accreditation to the process itself, before January 2001. This can be done directly at the website or by contacting the secretariat (see contacts at end).
2. NGO hearings and other dialogue sessions. The Secretariat will organize a two-day hearing for NGOs 6-7 November and another one for the private sector 11-12 December, both in New York. The sessions will address the FfD agenda. NGO-organized events on the topics are also strongly encouraged and several are already planned.
3. NGO communication with the secretariat, including electronic conferences on FfD agenda items. The PrepCom documents will be posted on the FfD web site, and the comments made by NGOs and private sector entities will be edited, collected and distributed to those engaged in the electronic dialogue, and then to the PrepCom in 2001.

The FfD process clearly relates to the preparations for the five-year reviews of the UN world summits. Financial resources remain a central, contentious issue for implementation of the summit commitments. In particular, the five-year review of the World Summit for Social Development considered the role of the Bretton Woods Institutions, the social responsibility of the private sector, and how additional and innovative measures to generate resources for social development. This work will be invaluable to the FfD process.

At the same time, the collapse of trade talks in Seattle has triggered a broad and quite open debate about the direction of globalization and the need for better rules to guide the global economy. The role of the UN in financing for development and its relationship to the multilateral organizations governing the world’s economies is a area that deserves urgent attention.

Areas of work that are linked to the FfD debate, in addition to trade, Official Development Assistance and foreign direct investment, include: the Jubilee 2000 and Jubilee South campaign to break the cycle of external debt servicing by developing countries, the campaign by NGOs for a tax on international currency speculation to generate money for development, the continuing work at UNCTAD on Restrictive Business Practices, and the revised Organization for Economic Cooperation and Development Guidelines for Multinational Enterprises.

FfD is also important in its own right. It would benefit from the experience and analysis done in these other arenas. A breakthrough in the discussion of development finance would at a minimum help to shift a serious obstacle in the realization of many of the existing multilateral commitments to sustainable development.

To generate more interest among NGOs and to give the FfD process a higher profile, several NGOs together with the UN Non-Governmental Liaison Service are planning 5 days of related activities during the 6-7 November NGO hearings in New York. The programme will include an orientation session for NGOs, discussion of existing initiatives, such as the study group on the possible establishment of a Tobin tax, meetings with governments and planning for the year of negotiations ahead. All interested NGOs are encouraged to participate. For information contact the Quaker UN office or the UN-Non-Governmental Liaison Service in New York (see contact information below).

It is too soon to guess what the outcome of the process will be. There is even a danger that the process will never get the profile it needs to get properly launched. Here are a few thoughts to start a discussion among NGOs, a discussion that ideally would start to take shape before the first substantive PrepCom in May. They are offered as a way to open a discussion.

1. The South needs to drive this process. The agenda must be about more than ODA flows. The FfD preparations offer the chance to look critically at the role of private capital (domestic and foreign), taxation, tariffs, multinational companies, debt servicing and governance of the whole system. What regulations are missing? What new sources of money exist? What are the greatest opportunities and threats? How can we resolve the contradictions within the international financial system without creating another monolith such as the Washington consensus of the 1980s? NGOs should begin to consider how all sectors in developing countries - government, private sector and NGOs - could be assured of a central place in the debate.

2. The FfD process creates an opportunity for national and regional dialogue among different government ministries. Officials from departments of trade, finance, development, and foreign affairs are all needed at the table. This is an opportunity to confront the governments that run the IMF and World Bank, the same governments that are UN members, with the hypocrisy of making rhetorical commitments to a sustainable development agenda while still financing something quite different.

3. Not everyone in the private sector is benefiting from current globalization policies. Globalization has brought tremendous consolidation in the private sector. In many industries, competition has been severely curtailed. Large subsidies for rich countries’ businesses persist, creating unfair competition. Governments at the UN could consider starting to work on internationally coordinated tax regimes to control the evasion of taxation by multinational companies.

There are many other ideas to consider. More immediately, NGOs already involved in the process are hoping to see, at a minimum:

Federica Pietracci

Financing for Development Secretariat

DESA, Room DC2-2162, New York, NY, 10017, USA

Tel: +1 212 963 4690; Fax: +1 212 963 1061

E-Mail: <ffd@un.org>

Lori Heninger, QUNO

777 UN Plaza, New York, NY, 10017, USA

Tel: +1 212 682 2745; Fax: +1 212 983 0034

E-Mail: <qunony@pipeline.com>

The South Centre

Case Postale 228, 1211 Geneva 19, Switzerland

Tel: +41 22 791 80 50; Fax: +41 22 798 85 31

E-Mail: <south@southcentre.org>

Web-site: www.southcentre.org/publications/index.htm

The South Centre has published a book entitled Financing Development: Key Issues for the South. The book is available on-line.

UN-Non-Governmental Liaison Service

1 UN Plaza, DC1-1106

New York, NY 10017, USA

Tel: +1 212 963 3125; Fax: +1 212 963 8712

E-Mail: ngls@undp.org

H.E. Mr. Jorgen Bojer, Ambassador

Permanent Mission of Denmark to the UN

E-mail: denmark@un.org

H.E. Mr. Asda Jayanama, Ambassador

Permanent Mission of Thailand to the UN

E-mail: llwhang@aol.com

http://www.globalpolicy.org

http://www.wtowatch.org

Negotiations (Tentative dates):

N.B. No final date for the high-level event has been set, but it now looks likely to be held early in 2002. A fourth PrepCom is therefore expected closer to the event itself.

Asian regional FfD consultation: 2-5 August 2000, Jakarta.

Latin America: 9-10 November 2000, Colombia.

Africa: 21-23 November, Addis Ababa.

West Asia: 23-24 November, Beruit.

Europe: 6-7 December, Geneva.

6-7 November for NGOs, New York

11-12 December for business, New York

5-9 November, FfD week in New York for NGOs built around the UN hearings. For more information, contact QUNO-New York or NGLS in New York; addresses above

8 November 2000: all-day meeting on private resource flows for development (organizers: WEED, Heinrich Boll Foundation, Global Policy Center. Contact: Jens Marens, WEED, e-mail: jens.martens@weedbonn.org,)

More copies are available from the Institute for Agriculture and Trade Policy

2105 First Ave. S., Minneapolis, MN 55404, USA. Tel: 612 870-0453 or 888 783 4750; fax: 612 870-4846; email: iatp@iatp.org