by Julian Disney

Two years ago, the heads of almost 150 countries solemnly agreed at the Millennium Summit on a number of top priority goals for reducing poverty and hardship around the world. These Millennium Development Goals (MDGs) are well-chosen and, in most cases, are defined precisely and specify the date by which they are to be achieved.

The Summit’s crucial shortcoming was its failure to agree on similarly specific targets and dates for mobilising resources to achieve the MDGs. However, a high-level international conference on Financing for Development was fixed for early this year in Monterrey, Mexico. Perhaps this conference could get the wealthier countries, in particular, to back their pious exhortations with specific commitments to practical action?


“Business as usual”

Unfortunately, the agreement to emerge from the conference – known as the Monterrey Consensus – has fallen far short of these hopes. It is a disappointingly timid and vague agreement, ignoring many practical and important measures proposed to the Conference by the UN Secretary General, the high-level Zedillo committee and civil society experts.

Its “business as usual” approach refuses to acknowledge that most developed countries actively harm poorer countries by adopting economic policies and permitting corporate abuses that are often grossly predatory and hypocritical. It does nothing of substance to reduce this abuse of market power by the major economies and corporations. It includes no specific improvement in aid or debt relief for the poorest countries, and no agreements on new ways of raising necessary public revenue to help disadvantaged people and countries.

Some of these failings may be partly attributable to the breadth of the conference’s agenda, the number of negotiating parties, and inclusion of the World Bank and the International Monetary Fund (IMF) as co-organisers. Major conferences of this kind can perhaps influence broad attitudes and directions for action on certain issues, but they are inherently much less likely than more focused meetings to reach path-breaking agreements on contentious topics.

The conference also suffered from the general escalation, which has occurred during the last year or so, in the ruthless unilateralism with which the US government tends to impose the wishes of its major corporate interests on the rest of the world. This was a major reason why many important and specific commitments were removed from earlier drafts of the final agreement. The Clinton Government initially sought to prevent the conference from taking place and its successor then ensured that the “Monterrey Consensus” was pallidly acquiescent.


Movement on the margins

Despite these fundamental weaknesses, there was some useful movement on the margins of the process. Some important directions for reform attracted more sustained and specific support during the prior negotiations, and from some influential leaders at Monterrey, than is fully apparent in the final agreement.

For example, the Monterrey agreement refers to the need for strengthening the role of the UN’s Economic and Social Council (ECOSOC). But it does not fully reflect the growth in the prominence of this view which developed during the negotiations and of the growing acceptance that it is necessary to boost the influence of developing countries, and social development concerns, on international economic policies.

As a result of the Monterrey process, ECOSOC now has substantially stronger endorsement for its attempts to play a coordinating role in high-level economic policy discussions, especially through convening its annual meeting with the World Bank, IMF, the World Trade Organisation (WTO) and other key economic institutions. There is also more support for ensuring the close involvement of developing countries in the formulation and monitoring of international economic standards

Despite evisceration by the US, the Monterrey agreement retains some references to the need for greater international cooperation on taxation. More importantly, the support was much greater during negotiations and at Monterrey than in any of the other UN conferences during the last decade. This partly reflected work undertaken by the UN secretariat, and a handful of civil society organisations (CSOs) such as Oxfam and ICSW, over the last few years. But understanding and support for the issue has been boosted considerably by Monterrey.

The growing demand for coordinated introduction of national taxes on currency transactions (sometimes known as “Tobin taxes”) is one example of this heightened international interest in taxation reforms. The Monterrey process contributed significantly to this growth by, in particular, exposing governments to excellent research and advocacy on the issue by CIDSE, ATTAC, the Halifax Initiative and a number of other CSOs.
Developing countries and CSOs used the Monterrey process to build further support for official development assistance (ODA). On the eve of the conference, specific increases were announced by the US and European governments. The increases were inadequate, especially on the part of the US, but there can be little doubt that even less would have been achieved without the stimulus provided by lobbying through the Financing for Development process.

Other measures which acquired more prominence and support as a result of the Monterrey process include debt mediation, allocation of Special Drawing Rights for development and the use of capital controls where appropriate.


The Way Ahead: An Anti-Poverty Pact

In essence, the Monterrey conference was concerned with two key issues: resources and governance. In relation to resources, the top priority for further action should be to continue demanding an International Anti-Poverty Pact. ICSW began proposing this Pact several years ago, in response to concerns and ideas expressed at ten regional civil society forums which it organised to assess implementation of commitments made at the Copenhagen Summit in 1995. The proposal has subsequently attracted support from a number of government representatives as well as a wide range of CSOs.

The Anti-Poverty Pact involves matching the specific, time-bound commitments of the Millennium Development Goals with a similar number of specific, time-bound commitments for mobilising the necessary resources. The Pact is deliberately designed to be a balanced “deal”. The proposed resource commitments involve wealthier countries making greater positive contributions by increasing ODA and debt relief, as well as causing less harm by reducing protectionism and financial volatility. But it also involves developing countries maximising their own resources by, for example, reducing tax evasion and corruption and implementing appropriate land reform. Some of the additional resources in the Pact would come from public sources, especially through tax and ODA, but a large proportion would come from encouraging long-term, genuinely productive investment by the private sector.

The UN Secretary General made good use of the Monterrey process to develop a Campaign for the Millennium Development Goals. The United Nations Development Program (UNDP) is now coordinating a system for monitoring progress towards achievement of these goals. UNDP’s valuable initiative will help to expose the need for major improvements in resource commitments if the goals are to be achieved on time. But there will also need to be a clear political focus and process for securing those commitments. The proposed International Anti-Poverty Pact is well-suited for that purpose.


Strengthening ECOSOC

In relation to governance, the top priority for further action should be to strengthen ECOSOC. At the Copenhagen Summit in 1995, only one government and one CSO emphasised the crucial importance of developing ECOSOC as a global forum which is sufficiently extensive and balanced in its representation but is not so diffuse or large as to be ineffective. Acceptance of this approach has gradually increased amongst both governments and CSOs, and ECOSOC itself has begun to introduce useful reforms to strengthen its capacities and processes.

The time is now right for CSOs and progressive governments to join forces in a sustained process of strengthening ECOSOC’s role and effectiveness. This should be the main vehicle for moderating the excessive dominance in global governance currently enjoyed by the US, the Group of 8 and the Organisation for Economic Cooperation and Development. It should also be the main vehicle for moderating the narrow and short-sighted economic fundamentalism which prevails within the IMF, the World Bank and the WTO.

A key focus for this campaign should be the annual meeting which ECOSOC now conducts with these economic organisations as well as others such as the Group of 20 and the Group of 24. ECOSOC could establish a Ministerial-level Working Group on Economic Cooperation to take principal responsibility for conducting these meetings. One or two topics could be chosen for intensive preparation each year, while other participant organisations could be given an opportunity to contribute to the preparation, but not to dominate it. Regional preparatory meetings, including civil society forums, could be held and the annual meeting itself could sometimes meet in UN centres other than New York and Geneva.

It is essential that coordination of this meeting remains the overall responsibility of ECOSOC. If the major economic powers wish to have a significant role in ECOSOC’s coordination, they should do so by seeking election to the Working Group on Economic Cooperation rather than using the IMF or World Bank as their proxy. It would be a great error for ECOSOC to allow itself to be positioned as a counterpoint to the IMF and other such northern-dominated economic organisations, rather than playing the overarching global role on economic and social issues that is vested in it by the UN Charter.


Strengthening tax cooperation

The Monterrey conference’s support for greater international tax cooperation should be capitalised upon as a matter of very high priority. The United States, United Kingdom and other “rogue states” such as Switzerland cause great economic and social damage to developing countries (and many of their own citizens) by promoting or acquiescing in massive tax distortions and evasion. Their excessive tax inducements for wealthy people and corporations suck domestic capital and profits out of developing countries, weaken long-term productive investment, reduce public investment and increase tax burdens on poorer people.

ECOSOC has a clear mandate and responsibility to take the lead in implementing the Monterrey call for greater tax cooperation. It already has an expert group on the subject but the group meets infrequently and operates principally at the level of technical analysis and administration. One possibility would be for ECOSOC to designate international tax cooperation as the main topic for its next two annual meetings with the Bretton Woods institutions and others. The preparatory work could be overseen by the proposed Working Group on Economic Cooperation or perhaps a specific Ad Hoc Working Group on Tax Cooperation. A goal for these meetings could be establishment of an International Tax Forum under ECOSOC auspices, analogous to the recently established Forum on Forests.


Constructive regionalism

The Monterrey conference gave some support to greater regional cooperation, especially between developing countries, but here too it was unduly vague and timid. The highest priority for developing countries, if they seek fairer behaviour from the dominant economic powers of the North, must be to maximise and mobilise their own economic and political power through greater intra- and inter-regional cooperation.

“Regional” here does not refer to artificial and unwieldy constructs such as “the Asian region” or “the Group of 77 and China”. It refers to groups of neighbouring countries which have a genuinely strong affinity of circumstances and interests, even if often also accompanied by historical conflicts. Generally, these regions are reflected in the growth of sub-continental groupings such as the Association of South East Asian Nations, the Southern African Development Community and Caricom. These groupings have tended to focus principally on security and trade but the time is right for greater involvement in issues such as tax cooperation, financial regulation, social protection and the achievement of the MDGs.

It is important that regionalism is constructive in the senses of engaging positively with other parts of the world rather than forming defensive fortresses, and of developing building blocks for equitable and effective global cooperation. It is essential that the United Nations, especially ECOSOC, rapidly strengthens its engagement with the new regional groupings rather than relying principally on interaction through its regional commissions. A modest but important step would be for ECOSOC to include these groupings in a Regional Consultation, conducted as part of its Annual Meeting, and to encourage the groupings to operate more frequently as negotiating groups within UN processes rather than relying so heavily on the Group of 77.

If developing countries are to enjoy many of the potential benefits of globalisation, and avoid many of the great dangers which it raises for them, their response to the decidedly modest progress at Monterrey should be to redouble their emphasis on regional cooperation. In doing so, they should concentrate on the realities of developing economic and political power not on rhetorical declarations, illusory autonomy or expectations of fair play.


Conclusion

The Monterrey agreement is of limited value, having been effectively neutered by the North. But the preparatory process, and some elements of the conference itself, helped to develop understanding and support for a number of key issues that received inadequate attention at the big UN conferences of the 1990s. It is important now to maintain and indeed accelerate the momentum that has been developed. This applies especially to developing an Anti-Poverty Pact, strengthening ECOSOC, improving international tax cooperation, and building regional cooperation amongst developing countries.

Julian Disney is Director of the Social Justice Project and the Immediate Past President of ICSW. He can be reached at jdisney@attglobal.net. For further details of the Anti-Poverty Pact and other proposals in this paper, see ICSW’s Financing for Development: Proposals for Action.