Autor: Dr Oscar Ugarteche
La arquitectura financiera internacional está sufriendo cambios importantes. Hay debates que se llevan a cabo en Asia y América Latina, además de Europa y medio oriente, sobre la importancia y relevancia de las instituciones financieras regionales dada la debilidad del dólar norteamericano, la inutilidad de las instituciones financieras internacionales (IFIs) y la muy urgente necesidad de tener instituciones más cercanas a la población, más democráticas y transparentes, y que estén menos sujetas a las agendas de un gobierno.
Para algunos es un complemento para las IFIs, para otros es un cambio de rumbo. La evidencia apunta en la dirección de un gran cambio alejándose de las instituciones centradas en Washington que se han debilitado, perdido ingresos, credibilidad y legitimidad.
El autor hace una revisión de las más relevantes iniciativas que aparecieron como alternativa a las IFIs: la Iniciativa Chiang Mai en Asia, el Banco del Sur y las propuestas de regionalización en Latino América y la ampliación de la Unión Europea
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By C. P. Chandrasekhar & Jayati Ghosh
The article analyses the emergence of the Bank of the South as an answer to the general disillusionment with the role of the International Financial Institutions (IFIs) in the region. These include not only the International Monetary Fund (IMF) and the World Bank (WB), but also the Inter-American Development Bank (IDB), which has some participation from Latin American countries but is dominated by the US
The article present data on how IFIs have contributed little to development finance in Latin America in recent years. Indeed, in the Latin American region the IFIs - and official finance generally – have been negative net contributors to resources for development.
For most of the recent period, the IMF has been a large recipient of repayment flows from countries in the region. The net amounts provided by the WB to the region since the late 1990s have been paltry, and since 2002 they have been negative as well. Even the IDB - the other large multilateral creditor – has been receiving net inflows from the region.
The only consistently positive – albeit relatively small – source of net finance has come from bilateral aid – and in recent years this has been dominated by intra-regional assistance, as oil-rich countries like Venezuela have provided finance for smaller countries.
In this sense, the creation of the Bank of the South is part of a broader trend within Latin America of governments increasingly distancing themselves from the IFIs that are widely perceived as too biased in favour of US interests and too insistent on providing rigid and undesirable policy advice. If this plan succeeds even partially, it is an important source of hope for the rest of the developing world.
By Nancy Dubosse, AFRODAD
As the issue of aid effectiveness takes centre stage in the context of the looming deadline of the Millennium Development Goals, a spotlight shines on the International Monetary Fund (IMF) lending practices to low-income countries; particularly those in Africa.
This paper provides a brief survey of Africa’s indebtedness and the Highly Indebted Poor Countries (HIPC) programme and an identification of the main conceptual points of disagreement with the Poverty Reduction and Growth Strategy (PRGF) programme, which is a requirement of HIPC, demonstrated with country examples, and recommendations.
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By Ruth EspÃnola Soriano de Mello
The author provides a summary of the conflicts and challenges in defining the Bank of the South’s foundation. Delays on defining key issues, such as objectives, structure and guidelines, among others, are related with important differences that exist among the countries.
Key areas of potential conflict have to do with the Bank’s role (regional central bank or traditional development bank), the composition of the capital stock, and the decision-making system (“one country-one vote†opposed to “one dollar-one voteâ€).
The establishment and consolidation of this new regional financial entity depends on the negotiations currently underway. Since so far the Bank’s foundations have been defined by the national executive branches, one of the major challenges is to incorporate legislative bodies, civil society, and social movements into the dialogue.
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Source: CHOIKE
After the launching of the Southern Bank in Buenos Aires the countries had to reach an agreement on the contribution that experts considered would be made in equal parts. Argentina, with the support of Brazil, said that this was unreasonable; that the contribution of the larger countries should be greater, and their power within the Bank should therefore also be greater. Naturally this distorts the idea of a democratic Bank with a board composed by seven equal associates in which each country would have a vote.
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Source: AFRODAD
With over 140 participants representing governments, multilateral organizations, aid agencies, civil society, private sector and academia, a two-day High-Level Symposium entitled 'Trends in development cooperation: South-South and Triangular Cooperation and Aid Effectiveness' took place in Cairo, Egypt from the 19 January to the 20 January 2008. The Symposium is part of the preparations for the first bi-ennial Development Cooperation Forum (DCF), which is due to take place in July 2008 in New York.They explored means to promote results-oriented development cooperation in pursuing national priorities. The debate provided an opportunity to further strengthen the voice of developing countries in the global dialogue on the promotion of greater effectiveness through stronger national ownership and leadership of development. It is also expected to influence follow-up to the Monterrey Consensus at the upcoming Doha Conference on Financing for Development in December 2008.
Three central issues were at the centre of debate in Cairo on how to achieve a more equitable and productive aid relationship between donors and programme countries, namely conditionality, aid quality framework and South-South and tri-angular cooperation.
On conditionality, NORAD said that if 'it helps us to attain human rights, the rule of law and good governance, without which aid is ineffective, then we may have to use it'. Others argued that conditionality supplants domestic policy making. It was also pointed out that conditionality thrives best in project approaches rather than where program-based approaches are used. Another speaker said that conditionality could be a useful part of development but all depends on how it is interpreted and presented. Participants expressed concern regarding the need to make conditionalities support rather than bind policy reform. This should be linked to clear benchmarks and help achieve given objectives. There was emphasis that conditionalities should be developed through stakeholder dialogue rather than imposed unilaterally.
On South-South cooperation, a number of points were made including
- The Doha Development Agenda, its problems and the need to have all development concerns included.
- He also pointed out the new and emerging trends where there is reverse lending in the sense that the South is now lending to the North.
- New generation of globalization: More TNCs arising from the South compelling Northern countries to develop a new form of protectionism in the area of investments and the traditional investment in trade.
- There is the proliferation of regional trade agreements and their impact is crucial for our analysis.
- The emergence of concern over corporate goods - climate change, water management as well as health care among others
- The proliferation of independent corruption networks
- Delivery of the donors’ system
- Migration and movement of national persons from the South which leads to brain drain
- He noted that the South-South cooperation is been driven mostly by China, Brazil, South Africa and India.
- The impact of oil price increases was also worth looking at
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Source: UN FfD Office
In the Editorial of the Financing for Development monthly newsletter - the 'Road to Doha', Neil Watkins raises the issue of external debt. The author argues that despite high profile debt relief initiatives, the debt crisis continues unabated for most developing countries. Developing country debt today stands at US$2.85 trillion, up from US$2.24 trillion in 2000, and US$1.3 trillion in 1990. With the MDGs at risk of not being met, leaders in Doha should support a call for expanded debt cancellation to all countries that need relief to meet the MDGs. Further, the conditionality which undermines debt relief should also be addressed. With new dynamics in the profile of external debt such as increased lending from India and China and aggressive litigation by vulture funds, there is a real need for a strong binding international system for responsible lending and svereign debt restructuring which holds creditors and debtors responsible. Finally the author supports the global call for action on odious and illegitmate debt and the need for strong new standards for responsible lending.
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Financing for Development Office
The latest edition of the Financing for Development newsletter highlighted the official announcement of a timeline of events leading up to the Doha Review of the Monterrey Consensus on Financing for Development (FfD). Each review session will comprise a panel discussion followed by a free-flowing dialogue with all stakeholders, including civil society. The newsletter also reviews the multistakeholder consultation on financing for development in the Asia-Pacific Region as well as the Cairo High-level symposium, organised by DESA, and whose outcome will serve as an important input to the first Development Cooperation Forum to be held in New York as part of the High-level Segment of ECOSOC in July 2008.
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IMF Independent Evaluation Office
IMF efforts since 2000 to reduce the number and scope of structural conditions in its loans have essentially had no impact, says the IMF’s internal auditor, the Independent Evaluation Office (IEO), in a report released this month. Furthermore, the report found that a third of IMF conditions still fall outside the institution’s area of expertise and in many cases include conditions that are not critical to IMF objectives. Consequently, the Report recommends further “streamlining†to get the Fund to select conditions that are ‘critical’ and within its core areas of responsibility - fiscal and monetary policy. Fund Management and the Board of Directors broadly agreed with the study’s findings, even though it essentially means reaffirming Conditionality Guidelines for the IMF already approved back in 2002.
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CONCORD AID WATCH
2008 is a crucial year in the fight against global poverty. Governments from across the world will meet at a ‘High Level Forum’ in Accra, Ghana in September to assess whether international aid is playing an effective role in delivering human rights for all. Soon afterwards they will assemble again at a UN summit in Doha, to examine the broader ‘Financing for Development’ agenda, of which aid is a part, but which also includes other critical issues for international development, such as international finance, trade and debt.
The European Union provides the majority of the world’s aid, giving it a crucial leadership role in the fight against global poverty. It also has a solemn responsibility to do all it can to make sure the aid it provides is as effective as possible at reducing poverty and ensuring rights for all.
European civil society organisations are therefore calling on the EU to grasp the opportunity for leadership that 2008 provides, and agree to a set of concrete EU targets to improve aid from member states and European institutions. If necessary, these should go beyond at the commitments made at international fora such as Accra. This would follow existing precedents, and allow EU aid to become a global benchmark for quality.
We make the following specific recommendations, for EU governments and institutions, which are set out in detail later in this paper:
1. The EU should respect real democratic ownership of the development process, and allow partner countries to be in the driving seat by:
 Untying all EU aid to all countries;
 Phasing out economic policy conditionality.
2. The EU should radically improve its accountability, particularly to developing countries and their citizens by:
 making monitoring and evaluation of aid truly independent;
 establishing a complaints mechanism open to aid recipients;
 supporting in-country mechanisms for holding donors to account.
3. The EU should commit to good practice standards of openness and transparency of their aid budgets and activities.
4. The EU should agree new, more ambitious targets to make multi-year, predictable and guaranteed aid commitments based on clear and transparent criteria.
5. The EU should reform its technical assistance – money spent on consultants, research and training - to respond to national priorities and build genuine capacity in partner countries.
Aid reform is, of course, only one of the steps that the European Union must take. Making its trade, security, migration, agriculture and other policies coherently work to benefit developing countries and promoting a fair international financial and trade system in favour of development remain huge challenges, which CONCORD members continue to focus on, but which are not the subject of this paper.
However, by taking the above steps, the EU would demonstrate that it is truly committed to making its aid an effective tool in the fight against global poverty and inequality.
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