Press Release

No. 132
Date: July 26, 1999

Four Development Ministers on a Common Course

Utstein Abbey, Norway 26 July 1999

- Donors must coordinate better, put more resources into development assistance and strengthen the multilateral system in order to help developing countries eradicate poverty and support global sustainable development. This was the message of the four Development Ministers, Ms Clare Short (United Kingdom), Ms Eveline Herfkens (the Netherlands), Ms Heidemarie Wieczorek-Zeul (Germany) and Ms Hilde F. Johnson (Norway) gathered at the Utstein Abbey in western Norway. On the 25 - 26 of July they met to discuss future strategies for cooperation on a number of development issues.

Making a difference in development is the ambition of the network of these four development ministers. They identified eleven key issues that need to be addressed jointly with other countries and international organisations:

In four important areas the donors particularly need to get their act together:

• Increased coordination: All donors must be prepared to adjust their programmes to achieve better coordination and thereby more effective assistance. The recipient country should be in the driver’s seat. The Comprehensive Development Framework proposed by the World Bank and the United Nations Development Assistance Framework (UNDAF) provide an excellent basis and should be implemented.
• Untying of aid: Further untying of development assistance will imply increased efficiency, improved quality and more development for every Euro. OECD members should strive to untie financial and investment related development assistance and food aid to the Least Developed Countries as soon as possible.
• Institutional and financial gap: Closing the institutional and financial gap between humanitarian assistance and long-term development cooperation is vital. Too often neglect of development needs leads to new conflicts and humanitarian catastrophes.
• Greater coherence of all policies affecting developing countries: Better aid practices are not enough. Donor countries need to be equally concerned to put in place coherent policies on matters such as trade, investment and environment which support sustainable development.

We need to see provision of more resources and the setting of new priorities:

• The debt initiative: Implementing the debt relief measures proposed by the recent Cologne Summit we will enable poor debtor countries to allocate more funds for poverty reduction. We encourage all creditor countries to seek ways to strengthen exit solutions in the Paris Club. One obvious and important contribution would be to cancel remaining ODA debt owed by the poorest countries pursuing effective policies. Other options include the forgiveness of commercial credits on top of multilateral agreements or making additional contributions to the HIPC trust fund which supports debt relief by multilateral institutions. Financing multilateral debt relief will require drawing on a limited share of the IMF gold reserve. Beyond this, the needed multilateral contributions should not come at the expense of these institutions’ ability to service their developing country clients. Bilateral contributions based on a transparent and fair burden sharing will also be required. Finally, the success of the Cologne Summit Initiative depends on the ability to transform debt relief to real poverty reduction and sustainable development. Strengthening the social dimension of the Enhanced Structural Adjustment Facility (ESAF) of the IMF would be a key contribution.
• The multilateral system: Supporting the United Nations and the development banks, both through fulfilment of the financial obligations, international coordination efforts and through policy priorities. It is vital to strengthen the multilateral system. It is essential that the UN be supported in fulfilling its role in the forgotten conflicts and crises in the world.
• Financing development: Fighting the global poverty menace requires imaginative thinking and action in order to reinvigorate development financing. Stronger efforts are needed to draw private capital to the most needy countries. The potential for public/private partnerships must be tapped more effectively. Official Development Assistance (ODA) from the OECD countries in aggregate falls far short of the internationally accepted target of 0.7 percent of GDP. We will work together to reverse the decline in ODA. We call for a renewed commitment by all partners concerned to the international development targets, including halving the proportion of people living in absolute poverty by 2015. One clear way for donors to show this commitment is to allocate more aid to countries moving in the right direction in economic policy and good governance, including striving for greater social equity, and thus demonstrating to our publics the effectiveness of aid in the sustainable reduction of poverty.

The developing countries need to put their act together:

• Combating corruption: Corruption is stealing from the poor, it is a major obstacle to development, hampering not only economic development, but also undermining democracy and destroying the credibility of government. Both through control systems, public sector reform and punishment of the perpetrators corruption should be addressed.
• Strengthening democracy and good governance: Democracy and competent and strong public authorities are the best guarantees for sustainable development. Lack of democratic participation and weak public sectors are major challenges that need to be met by developing countries and donors alike.
• Preventing conflicts: Peace is a fundamental prerequisite for development. This is a responsibility of all actors. Conflicts that have reached a peaceful settlement may arise again unless underlying causes are removed. Development efforts should be used strategically not just to prevent and settle conflicts, but also to consolidate peace when settlement has been reached.
• Implementing poverty reducing policies: Developing countries themselves have to create an enabling environment to stimulate private sector investment, ensure an equitable distribution and make public expenditure more efficient and transparent.

The Utstein Meeting is only the beginning

The four Development Ministers will continue their collaboration in these eleven key development issues. Ms. Eveline Herfkens, Development Minister from the Netherlands, will host the next meeting in the summer of 2000. In the meantime, the four Ministers will work jointly and separately to carry the Utstein agenda forward.