Ms. Hilde F. Johnson, Minister of International Development, Norway

Opening remarks at Conference on Financing for Development

Washington, D.C. – 19 February 2002

Excellencies, ladies and gentlemen,

I am very pleased to welcome you to this conference arranged by the Institute of International Economics and the Center for Global Development, and co-sponsored by the G-24, The Inter-American Development Bank, Mexico and Norway.

Encouraged by the UN and the World Bank to consider possible initiatives to bridge the cultural gap between the UN and the financial institutions in Washington we thought it would be useful to consult with the G-24 in Washington. Last spring we agreed to join forces. We realized, however, that it would be desirable to seek support from a major institution and approached President Iglesias in the Inter-American Development Bank. We appreciate very much his decision to have the IDB join the project and the enthusiasm he has supported it with. We very much appreciate the decision of Mexico, as host to the Monterrey conference to become a co-sponsor. We also would like to thank the Institute of International Economics and the Center for global Development for taking on the considerable task of convening and arranging the event and preparing the background papers.

Two goals are particularly important for this meeting. One is to address regional cooperation, an issue for a large part overlooked by the Preparatory Committee for the Conference on Financing for Development in Monterrey. That we will do today. The other is to identify other issues that should be considered at the political level in Monterrey. That we will do tomorrow.

At this point we find ourselves in quite an unusual situation going into a major UN conference. We have a negotiated and agreed final outcome document - "The Monterrey Consensus" - even before the actual conference takes place.

The "Monterrey Consensus" is a good document. It reflects the important conceptual convergence between the UN and the Bretton Woods institutions. It makes clear that considerable additional efforts will have to be made by developing as well as developed countries if the agreed international development goals are to be achieved. It also reflects a general consensus that there is a need for increased official development assistance to achieve those goals, but it is conspicuously short on specific commitments on the part of developed countries.

The Monterrey consensus is good, but it is not good enough. This conference is an opportunity to explore how we can move beyond the agreed document. We should identify priority issues for the international development agenda and new ideas that should be added to it.

We must always keep in mind what Monterrey is really about. It is about the hundreds of millions of poor people. We must make a collective effort to lift them out of poverty as soon as possible. Children must get their vaccines, shantytowns and villages must get access to clean drinking water. The Millennium Development goals must be met. This is the real reason why we are gathered here in Washington today. And on which the success of Monterrey will be measured.

Monterrey must move beyond the status quo. Anything else would mean letting down the millions of people who depend upon us as leaders and decision-makers. Monterrey is a historic opportunity. It will be the first time world leaders are gathered to discuss financing for development. We must arrive well prepared, not to play the regular game of diplomatic positioning, but to set a new course for the future. Poverty can be eliminated, if we really want to. That is the yardstick by which Monterrey will be measured.

It is up to us, the political and other leaders in the North and the South, to rise to the occasion. Eradication of poverty is our moral imperative. It is the right thing to do.

It is not just altruism. It is also in our own best interest. Eradication of poverty is a necessary and integral part of the fight against terrorism. It is part of the fight against communicable diseases. Both find fertile breeding grounds in countries where the social and political fabric is weak.

During the preparations for the Monterrey conference we have made efforts to raise the issue of regional cooperation and the important role of the regional development banks. However, regional cooperation has not received the attention it deserves in the preparatory process. Our conference today will hopefully make up for some of that.

One issue that we will explore today is the regional dimension of the emerging new international financial architecture. Recent events have shown that a better functioning financial system is in the best interest of both rich and poor countries alike.

International standards is one element of strengthening the financial system. At the same time there is growing awareness that one size doesn’t fit all, that reforms are costly and take time. On the one hand there is a need for step-by-step approach that takes into account national and regional circumstances. On the other hand, there must be a balance and a proper sequence between the various initiatives. For instance, we have been made aware of the risks of liberalization without the necessary institutions in place. The regional development banks can undoubtedly play a constructive role in tailoring standards and institutional reforms to regional and national circumstances.

We can do more to increase the efficiency of development cooperation. One approach may be to take regional characteristics better into account. The regional development banks have a special role to play through their closeness to governments and their regional networks and perspectives. However, the need for greater efficiency in no way counteracts the urgent need for greater volume as well. Underfunding remains the greatest development problem.

The final session on regional public goods, I must admit, is closest to my own heart. Global public goods are ones that single governments cannot provide, for instance the protection of the global climate. On a regional scale there are important public goods that cannot easily or sufficiently be provided by national governments. We have not put sufficient emphasis on regional programs to provide these public goods, such as regional programs for health, transport, energy etc. I have here in mind major regional initiatives such as the New Partnership for Africa's Development (NEPAD) or crossborder subregional efforts to deal with shared natural resources like the Nile River Basin Initiative or the Mekong River Commission. These initiatives are not only important for the development of the participating countries, but are also essential instruments for preventing and solving conflicts, a prerequisite for development.

Peace and development are inextricably linked. I have just returned from a trip to the Great Lakes region. The conflicts there can only be solved though increased regional cooperation, supported by the international community at large.

A number of issues on the agenda of the World Summit for Sustainable Development to be held in Johannesburg later this year can only be addressed in a regional or subregional context. Regional cooperation therefore also represents an important link between Monterrey and Johannesburg.

Thus, my challenge to you goes beyond Monterrey. It goes beyond Johannesburg. It goes to the evil cycle of poverty and conflict in Africa and elsewhere. I challenge you to formulate clear ideas and programs for what regional institutions and regional cooperation can do to confront these issues. I challenge you to make sure that you have the adequate financial instruments at your disposal.

This year Norway is celebrating fifty years of development cooperation. The most important element of our celebration is the launching of a Norwegian Action Plan for International Poverty Eradication. With the Millennium Development Goals as our guiding light, we have formulated a strategy for future development cooperation. No development effort can succeed unless it takes place in a context. Fifty years of development cooperation have taught us the importance of acting in concert.

Acting in concert at the country level means that we must all support country driven poverty reduction strategies. The Poverty Reduction Strategy Papers have become a code of conduct for international development efforts. However, the PRSPs will succeed only to the extent that they become truly country owned. It is therefore vitally important that we, the development partners, create the space for governments to assume that leadership. To that end the regional development banks have a crucial role to play.

Acting in concert at the level of Monterrey implies delivering in terms of commitments. This goes for developing as well as developed countries. We should all rise to the occasion and do what is necessary to make the Millennium Development Goals a reality. The millions of poor people should feel the difference.

I wish us a lively, intellectually challenging and fruitful meeting here today.

Thank you.