High-level panel on development financing presents key proposals to Annan

Far-reaching recommendations aimed at ensuring stable global development and turning the tide against poverty were presented today to United Nations Secretary-General Kofi Annan.

The proposals, contained in a report by an 11-member international panel of experts chaired by former Mexican President Ernesto Zedillo, include calls for improving governance and economic management, directing more resources to the poor, creating an international tax organization and considering an international tax on carbon emissions.

President Zedillo said the time had come to give serious consideration to how the international community coordinates its financial affairs. "The world has changed considerably since the aftermath of World War II, when most of our international agencies and economic governance agreements were founded," he said. "Unexpected dimensions of rapid globalization and factors such as the resurgence of international epidemics are undercutting the huge strides in better living conditions that were made in the post-war period."

Speaking to reporters at UN Headquarters in New York, President Zedillo noted that poverty and underdevelopment posed significant threats to peace. He said reversing increasing polarization between rich and poor was the "pre-eminent moral and humanitarian challenge of our age."

"The challenge is to persuade the politicians and publics of industrial countries that aid expenditures are both morally compelling and a vital investment in building a more secure world," he said, inviting "altruistic institutions to take up this challenge with a massive campaign to influence public opinion in the donor countries."

Secretary-General Kofi Annan convened the high-level panel late last year to identify practical means to fulfil international anti-poverty commitments set in September 2000 at the UN's Millennium Summit, and to build political momentum for the upcoming International Conference on Financing for Development, which will be held next year in Mexico.

The panel report says that primary responsibility for securing economic growth and equity lies with national governments, and urges developing countries to undertake balanced fiscal policies, macroeconomic discipline, fair and effective governance, secure tax bases, support for human capital and the installation or strengthening of pension plans.

While welcoming current mechanisms to reduce the debt burden of the poorest countries, the panel warns that debt relief by itself is not sufficient to move countries forward. The report urges a renewed push toward the target of devoting 0.7 per cent of donor country gross national product (GNP) to official development assistance (ODA), and advocates various mechanisms to target resources more effectively towards the poorest sectors of the population.

The report also contains proposals for placing relations between aid-giving and receiving countries on a new footing. It urges that development funds from donors and domestic sources be placed in a common pool, thereby removing conditionalities.

The panel expresses scepticism regarding the feasibility of placing a tax on international financial transactions, as is favoured by many civil society organizations. The panel calls on the upcoming Financing for Development conference to consider the merits of an international levy on carbon dioxide emissions. Funds obtained would pay for "global public goods" -- such as services to combat global epidemics -- that cannot be administered effectively by any single country.

The panel's report will be available for the consideration by the resumed third session of preparatory committee for the International Conference on Financing for Development, which is set to meet in October.