1. The sixth plenary session of the Leading Group on Innovative Financing for Development was opened by Bernard Kouchner, French Minister of Foreign and European Affairs and President-in-office of the Leading Group. He underscored how important it was for the Leading Group to meet during this time of crisis and to remain at the forefront in thinking up and implementing innovative, practical and effective solutions for development.
The Secretary-General of the OECD, Angel Gurria, welcomed everyone to the OECD Conference Centre and pointed out that innovative financing mechanisms are at a turning point, marking a new frontier of development policies.
International action to alleviate poverty and achieve the Millennium Development Goals (MDGs) is starting to produce results, but more needs to be done. These results are already being threatened by the effects of the economic crisis hitting developing countries the hardest, particularly in sub-Saharan Africa. In the health sector, US$35 billion are still needed to achieve the MDGs.
During the plenary session, several speakers underscored how vulnerable developing countries are to the effects of the global economic crisis they have not even caused. Although their economies had a very dynamic growth rate at the end of the century, today they are extremely weak experiencing a decrease in trade, an increase in unemployment, etc. At this particularly difficult time, it is especially necessary to continue our efforts but also to be imaginative and change our models in order to raise more resources and use them more efficiently. It is a moral imperative: We cannot let the financial crisis turn into a development crisis, we cannot let tens of millions of people plunge into poverty, we cannot do without solidarity with the developing world. The message of Professor Mohammed Yunus, laureate of the Nobel Peace Prize in 2006 and one of the fathers of microfinance, strongly commended the Leading Group’s groundbreaking work which he found to be in line with his own work.
The crisis magnified the inequalities between peoples and continents, increasing poverty and making it more unbearable. In addition to their contribution to the global effort with the resources they raised, innovative financing mechanisms, generated by collaborative efforts on the part of multiple actors, are part of a more extensive image of a more citizen-minded and inclusive globalization which “gives people a chance”. All the participants therefore had considerable expectations for the Leading Group’s Sixth Plenary Meeting.
2. Several speakers welcomed the assessment of the Leading Group over the past three years. Angel Moratinos, Spanish Minister of Foreign Affairs and Patrus Ananias de Souza, Brazilian Minister of Social Development and Poverty Alleviation, welcomed the concrete success stories of innovative financing mechanisms in the areas of poverty and hunger reduction, with a view to achieving the MDGs, and hoped to see existing mechanisms reinforced.
Since the Monterrey Conference in 2002 and the Leading Group’s first plenary meeting, much has been done. Innovative financing mechanisms, in which few truly believed, have become a reality and even a necessity, especially in the health sector where they have particularly been used, providing stable, predictable and sustainable resources in addition to conventional official development assistance.
In his speech, Philippe Douste-Blazy, United Nations Secretary-General’s Special Adviser on Innovative Financing, underlined the groundbreaking role the air-ticket solidarity levy has played providing close to US$800 million to UNITAID to fight such deadly diseases as AIDS, tuberculosis and malaria. The funding of the IFFIm through binding commitments over the long term helped raise substantial amounts used to fund the GAVI Alliance and to vaccinate poor people saving tens of millions of lives. Other innovative financing initiatives, such as AMCs, are particularly ambitious and promising, not to mention the success of private sector initiatives, such as RED. UNAIDS Executive Director, Michel Sidibé, explained that this is a genuine reform of development which is not only about addressing extreme poverty, but also enhancing social justice through fair distribution. Innovative financing mechanisms produce concrete changes in the lives of millions of people.
This success was possible thanks to substantial action by the wide-ranging members of the international community: developed, emerging and developing countries in addition to international organizations, NGOs from both the southern and northern hemispheres, not to mention the communities of people living with a disease who played a considerable role. Innovative financing resources have been added to those raised by conventional official development assistance (ODA) to provide the means to achieve the health-related MDGs (MDGs 4, 5 and 6). They were used in an innovative and coordinated way in connection with existing programmes and organizations (WHO, World Bank, Global Fund to Fight AIDS, Tuberculosis and Malaria, etc.). With a view to facilitating synergies and being a genuine forum for exchange, the Leading Group invited the High-Level Taskforce on Innovative Financing for Health Systems recently created (2008) and led by Gordon Brown and Robert Zoellick to share their recommendations during this sixth plenary session.
Achievements made in the health sector since 2006, supported and taken forward by the Leading Group, are now recognized in other sectors. Innovative financing mechanisms are on the agenda of all major international development meetings. It is important to further develop them by convincing new partners to join the Leading Group and to implement innovative financing mechanisms. Mariano Fernandez, Chile’s Minister of Foreign Affairs, will make this happen during Chile’s Presidency of the Leading Group by insisting on strategic partners. As regards the United Nations, Philippe Douste-Blazy committed to help rally more international support for these issues.
3. Stressing one of the most important issues of the conference, many speakers underscored the crucial role of innovative financing mechanisms and the need to explore ways to extend them to new sectors, through a “scaling up”.
The delays accumulated in achieving the MDGs and the unforeseen impact of the financial crisis on developing countries make it all the more necessary to strengthen existing structures and to even scale up by creating new mechanisms and investing in new sectors (education, climate, the fight against hunger, etc.).
Stressing that now is the time to concretely reflect how to broaden the scope of innovative financing mechanisms, several speakers pointed on that development sectors need more resources, and other global issues warrant study. Nubuhide Minorikawa, Parliamentary Deputy Minister for Foreign Affairs in Japan, stressed the importance of the health sector – addressing the major pandemics and vaccination – in which stable and predictable resources are essential to have an impact and which has received considerable revenues from innovative financing. He also pointed out that special efforts could be made in other development sectors such as education or food security. Mankeur Ndiaye, Ambassador and Head of the Foreign Minister’s Office in Senegal, stressed that we are considerably behind in achieving the MDGs, especially when it comes to ending hunger. Several speakers emphasized the importance of the fight against climate change which has violent impacts on the development process and that it is another priority area to be considered. According to Mankeur Ndiaye, Africa needs a green revolution to have sustained development, and the Leading Group has a crucial role in making that happen.
The scaling up is also translated into development of a range of innovative financing mechanisms with a more direct citizen-based solidarity which is open to the economic world. The new project of voluntary contributions led by the Millennium Foundation and the De-Tax project are proof of this fresh significant action on the part of civil society in the area of innovative financing. Members of the Leading Group welcome the fact that these initiatives with considerable potential are gaining ground. This reflects a more solidarity-based globalization. Jean-Louis Vielajus, President of Coordination SUD, has on behalf of the NGOs underscored the Leading Group’s driving role in innovative financing and particular momentum being built through collaboration between countries, NGOs and international organizations which support it.
This scaling up is also reflected in a change in practices resulting from an update of our financial instruments which should be more flexible, adaptable and incentive-geared to effectively address climate, food and economic crises.
This scaling up the Leading Group would like to see also leads us to take a look at financial resources generated by illegal financial flows and tax avoidance which are not being used in developing countries. These resources are means of investment for development taken from people who need them and warranted the creation of a working group co-chaired by the Leading group which is specifically devoted to this problem. Lastly, the Leading Group, a singular forum for sharing best practices, dialogue and action to develop innovative financing mechanisms, will continue to freely discuss all the possibilities for raising additional resources for development. A special working group will be devoted to the technical feasibility of a tax on monetary transactions and voluntary contributions on international financial transactions, potentially able to raise significant resources on an annual basis, as announced by Bernard Kouchner in his opening speech.
This potential can only be realized through increased action by the Leading Group and effective and clear communication to attract new partners.
4. This plenary session gave speakers the chance to recall the need for the international community to do more for the developing world hardest hit by the crisis and to deliver on their commitments of official development assistance.
The essential nature of official development assistance was often discussed, with particular emphasis on the need for donors to deliver on their promise taken collectively to step up national efforts and spend 0.7% of their GDP on ODA by 2015. This moral obligation is a joint responsibility, stated at Doha, and a priority in the minds of the Leading Group members.
The speakers again reminded participants that innovative financing is additional to conventional ODA, currently the leading way of assisting low-income countries. Existing and future innovative financing mechanisms will be explained in more detail in the workshops. They have greatly contributed to development and do not intend to replace ODA but to complement it.
29 June 2009Printable version