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UN: Conference Seen As Key Chance To Unlock Development Aid

A UN conference aimed at spurring growth and eradicating poverty in the developing world is expected to attract an unusually wide array of leaders from both government and business. Those gathering in Monterrey, Mexico, next week (March 18-22) will seek to improve the way aid is channeled to poor countries and will also discuss market reforms, fairer trade measures, and debt relief. UN officials say that amid the debate over aid is a growing awareness that developed nations cannot afford to neglect any region of the world without risking direct consequences.

United Nations, 15 March 2002 (RFE/RL) -- An extraordinary group of public and private sector leaders will gather in Monterrey, Mexico, next week to try to trigger dramatic changes in global aid, trade, and investment.

Thousands of people are expected to participate in the UN conference on financing for development, including presidents and prime ministers from at least 60 countries, among them U.S. President George W. Bush. The heads of the World Bank, International Monetary Fund, and World Trade Organization (WTO) will attend, along with the leaders of other international agencies, corporations, and civil society groups.

UN officials say that in the aftermath of the terrorist attacks last September, there has been an upsurge in public discourse about the need to invest in more development. While many officials say it is simplistic to link poverty to terrorism, they believe the conditions of inequality rampant in many poor nations do often breed violence and contribute to global instability.

UN Secretary-General Kofi Annan is urging member states to take advantage of the Monterrey conference, which begins on 18 March, to boost aid levels to the poorest countries. He repeated this at a news conference on 13 March:

"It represents the best opportunity we have had in a very long time to unlock the financial resources that are desperately needed for development. In other words, it concerns the fate of the great majority of our fellow human beings. It's an opportunity we absolutely must not miss."

Annan and the World Bank propose that countries double their development aid by an extra $50 billion per year to meet the goals set at the UN's Millennium Summit in 2000. Those goals include halving poverty in developing countries by 2015. They also include the improvement of many quality-of-life aspects for hundreds of millions of people, including access to safe drinking water, improving health care, and providing universal access to education.

Official development assistance, one of several key issues to be discussed in Monterrey, is regarded much differently by the main pillars of the donor community -- the European Union and the United States.

EU countries agreed yesterday to increase average annual development spending to 0.39 percent of gross domestic product by 2006. They agreed to eventually phase in aid increases to meet the UN target of 0.70 percent of GDP.

But the United States has never committed itself to the UN aid target. Bill Wood, a senior official on UN affairs at the U.S. State Department, says Washington prefers bilateral aid programs linked to performance measures and encouraging reforms that lead to higher private investment.

Wood tells RFE/RL that the developed world can contribute resources and access to markets but that developing countries must make tough decisions on economic reforms.

"The thing that the developing world has to contribute is the creation of an environment through good government, through good economic policies, through open societies which provide a climate in which business can flourish -- whether it's the small farmer or the medium-sized entrepreneur or the large, multinational corporation -- so that they can take advantage of the productive resources that are available."

A statement this week from the UN Development Program's Vienna office offers some support for this approach. It says the experiences of the Central European and Baltic countries shows that development financing cannot work without institutional change.

The UNDP says about $18 billion in official development aid went to these countries in the 1990s. But it says this was small compared to the private investment that flowed into the region as countries adopted reforms in preparing for EU accession.

The UNDP says Hungary alone received nearly $25 billion in foreign direct investment during the 1990s and along with other countries in the region no longer relies on assistance from international financial institutions. The UNDP says countries such as the Czech Republic are now becoming "emerging donors" and are putting into place their own development cooperation programs.

But a number of other former communist nations in transition, particularly from the Balkans, remain in need of aid, as well as foreign investment. A recent World Bank report says that more people live in poverty in Eastern Europe and Central Asia now than a decade ago.

Romania, Moldova, Macedonia, Croatia, Armenia, and Kyrgyzstan are among the states sending top-level delegations to Monterrey in hopes of gaining greater access to aid and investment.

Romania's ambassador to the United Nations, Alexandru Niculescu, will accompany President Ion Iliescu to Monterrey. He tells RFE/RL he hopes the developed countries will agree to an aid strategy that will lead to greater partnerships with countries like Romania, which are struggling economically.

"In the more interdependent world in the face of this rapid globalization, no one can achieve the goals of development and having a performing market economy without having developed international cooperation with all the stakeholders."

Romania will play a particularly active role. Iliescu is to chair a roundtable discussion during the summit portion of the conference later next week on the future of financing for development. Romania's central bank chief, Mugur Isarescu, will cochair a roundtable at the ministerial level on partnerships in financial aid programs.

Trade will also be a major issue in Monterrey, particularly the question of access for exports from developing countries to the markets of developed countries. In Doha, Qatar, last November, the members of the WTO agreed on negotiating a range of issues crucial to developing countries, such as reduction of subsidies

WTO Director-General Mike Moore said this week he will offer a "blunt" message to rich countries at the conference, asking them to open their markets. Moore has repeatedly said the "Doha Round" of free-trade talks can only succeed if rich countries open their markets, particularly in agriculture, a core sector for developing nations.

Moore issued the same message last month at the World Economic Forum in New York:

"Those criticisms of how the markets of the north are closed are totally correct. It is an injustice that has to be addressed, and if it's not addressed in this round, this round will not conclude."

Moore, in his comments this week, said the Monterrey meeting offers the most important opportunity in years to address global inequities. He said elimination of trade barriers to developing countries could result in gains totaling more than $100 billion for them.

(The website for the conference is Monterrey Conference)