Following the IMF-World Bank Spring Meetings, finance ministers attended the special high-level dialogue of the UN Economic and Social Council (ECOSOC) on April 24 in New York, with the IMF, the World Bank, the World Trade Organization (WTO), and the United Nations Conference on Trade and Development. IMF Deputy Managing Director Agustin Carstens reported to the plenary on the outcomes of the International Monetary and Financial Committee meeting. The ECOSOC meeting considered progress in implementing the Monterrey Consensus on financing for development and the outcomes of the 2005 UN World Summit.
UN Secretary General Kofi Annan noted that the 2005 UN summit had advanced development efforts worldwide, including on aid and debt relief. Member states pledged to adopt by end-2006 comprehensive national development plans for achieving the Millennium Development Goals (MDGs). These plans should build on existing efforts, including Poverty Reduction Strategy Papers, and focus on measurable results.
But more needs to be done, he said, expressing concern about the lack of progress in the Doha Round of trade negotiations. He urged leaders to deliver on the ambitious deadlines set at last December’s WTO ministerial meeting in Hong Kong and stressed that the Aid for Trade initiative should be implemented promptly and fully funded.
Participants discussed a range of related issues in topical roundtables.
National development strategies. Participants said that countries should develop a single national strategy using existing mechanisms that integrated various elements of development and international commitments, such as the MDGs and trade policy. Strategies should be country-owned and reflect each country’s specific conditions. Although domestic resource mobilization is important, participants stressed the need to increase the level and effective-ness of aid and to align it with countries’ priorities.
Doha work program and aid for trade. Participants agreed that a successful Doha Round would increase countries’ opportunities to accelerate and sustain growth and reduce poverty, and Agustfn Carstens (center) reports to the ECOSOC plenary. speakers stressed the importance of making speedy progress. They welcomed the Aid for Trade initiative but stressed that it must not substitute for actual trade liberalization and progress in the trade negotiations. The initiative should provide stable, predictable, and nonconditional financing for capacity building and trade and should be in addition to other forms of development assistance.
Debt sustainability. Participants recognized that adequate economic growth—supported by good governance, transparency, and a conducive business environment—is crucial for avoiding unsustainable debt. Many speakers cautioned that borrowing countries should pursue sound debt management strategies and that lenders should adhere to good lending practices. Participants encouraged the international community to better assess the risk of debt distress and propose policies to minimize such risks. Debt relief should supplement, and not substitute for, aid.
Supporting middle-income developing countries. Participants noted the diversity in the level of economic development and size of middle-income countries and pointed out that some had problems similar to those of low-income countries. Middle-income countries require individual analysis and suitable assistance from the international community. Some speakers supported the development of new instruments, as well as increased policy space to pursue countercyclical measures. Efforts to improve the level of private investment, the development of public-private partnerships, and good governance were also highlighted.
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