United Nations

Economic Reforms Can Engender Sensible Development
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United Nations Convenes NGO Hearings on Financing for Development

Here's a guest article on new approaches to development being made at the international level.

by Robert Wheeler and Alanna Hartzok

The United Nations is deep in debate about the best ways to finance development for the developing world and for once the member states are turning to citizen organizations for input and advice. After four preparatory conferences and formal hearings with Non-Governmental Organizations (NGOs) and the business sector, Financing for Development (FfD) will culminate in a high-level conference in the first quarter of 2002. Both the World Bank and the IMF are participating. It is hoped that the final sessions in 2002 will also bring together ministers of trade, finance, and development from around the world.

In an unprecedented role reversal, the UN held hearings on November 6 and 7 in which civil society leaders presented their views, while ambassadors from countries of the North and South asked questions and listened. Twenty four NGO representatives participated in four substantive panel discussions, covering the full FfD agenda:

Nearly one hundred NGO representatives from every region of the world participated, including the International Council on Social Welfare, WEDO, Jubilee 2000, Friends of the Earth, ATTAC France, International Confederation of Free Trade Unions, Third World Network, Oxfam, International Union for Land Value Taxation and the International Institute for Sustainable Future.

While there was a diversity of opinion, NGOs typically called for debt relief measures well beyond the flawed Heavily Indebted Poor Country Initiative (HIPC), which often results in basic human needs and development priorities being sacrificed to meet the claims of creditors. Most NGOs advocate debt cancellation similar to the Jubilee 2000 campaign while some are going beyond to urge the unilaterial repudiation of debts by Third World countries.

There was also strong support for what is often called the Tobin Tax on foreign exchange transactions. A coordinated system of national taxation on currency transactions would limit short term investments that are made for speculative purposes; better target appropriate investment flows for countries seeking stable and productive capital; and stabilize financial markets. It could also fund such things as sustainable development and basic human needs if mandated as recommended.

Other strong NGO statements called for binding standards and regulations to be placed on multi-national corporations, along with voluntary codes of conduct.

Asia Pacific Region NGOs participating in the High-Level Regional Consultative Meeting on Financing for Development in Jakarta held 2-5 August 2000 put forth an International Anti-Poverty Pact, a proposal generated by a series of meetings during the last two years involving representatives from thousands of citizens organizations around the world, which gives seven specific recommendations. In addition to debt cancellation and currency transaction taxes, the Pact calls for strengthening the provision of official development assistance (ODA), review of international trade arrangements especially in agriculture and intellectual property in order to reduce unfairness for developing countries, the discontinuance of excessive military expenditures in both developing and developed countries, and strengthening anti-corruption systems at national and international levels.

Lastly, point seven of the Anti-Poverty Pact calls for enhancing equity and sustainable productivity in the ownership and usage of land and other natural resources, stating that "access to and sustainable use of productive land is crucial....to avoid poverty but also for promoting genuine economic development. In many countries, reform of land ownership is essential to enable fair access..." The Pact calls for the introduction of adequate and equitable taxes or charges on consumption of natural resources to reduce inefficient, unfair and unsustainable depletion or pollution of those resources. It recommends that governments re-examine the concrete blueprints for a comprehensive ecological tax reform.

The International Union for Land Value Taxation, including its 60 member organizations, also urged a tax shift to land and resources. They recommend reducing or eliminating taxes on labor and wages (in order to increase purchasing capacity) and increasing taxes on land and natural resources (to eliminate speculation and private profiteering). This tax approach has also been recommended by the UN Center for Human Settlements (UNCHS), the Popular Coalition of the FAOšs Fund for Agricultural Development, and a UN policy paper for the Commission for Social Development.

The IU paper also urges the creation of a Global Resource Agency mandated to collect global resource rents (as recommended by the Commission on Global Governance) from (1) the use each nation makes of the global commons such as ocean fishing, sea-bed mining, sea lanes, flight lanes, outer space, the electromagnetic spectrum, and (2) charges on activities that pollute and damage the global environment such as CO2 emissions, oil spills, dumping wastes at sea and other forms of marine and air pollution.

A paper calling for a Sustainable Economic Opportunity Program (SEOP) was distributed by the Global Peoples Assembly representative. It outlined a proposal for a UN sponsored program that would underwrite a fund to provide capital for small businesses and community based enterprises to engage in sustainable development. Bonds would be sold on the open market to capitalize the fund; and governing boards would be established at the national, state and local level to develop criteria and set priorities for investment.

The Chairs of the FfD Process, Ambassadors from Thailand and Denmark, repeatedly stressed that the final FfD policy decisions will be made by the participating member states and that citizen activists should be aggressively lobbying the national governments. Similarly the NGO Coalition for FfD strongly encourages all peoples to contact their governments and emphasize the importance of these issues and what we want our governments to do about them.

A second FfD PrepCom will be held in New York in February, a third in May, and a fourth in January 2002. The major global FfD conference will be sheduled for later in the spring of 2002.

For further information, please contact the Financing for Development Coordinating Secretariat, http://www.un.org/esa/ffd or telephone (212) 963-8497.

The list of panelists and their presentations are available on the Internet at http://www.un.org/esa/ffd/hear_panel_list1.htm.

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Robert Wheeler is UN NGO representative for the International Institute for Sustainable Future and coordinator for the Global Peoples Assembly; Alanna Hartzok is UN NGO representative for the International Union for Land Value Taxation and director, Earth Rights Institute.

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