Financing for Development

Madam President, 

I would like to express my deepest condolences to the Indian people in the aftermath of Thursday’s horrific terrorist attacks. Today we are all Indians, and we stand strengthened and more united than ever in our fight against global terrorism.

From this conference, there is basically only one important message that needs to be conveyed. The message is that there is no way we will accept the international financial crisis being used as an excuse for reducing our ambitions when it comes to fighting poverty and global climate change. To the contrary, the financial crisis should be another argument for strengthening our dedication and commitment with respect to these two issues.

To ensure that Norway puts its money where its mouth is, we have decided to increase our official development assistance to 1 % of GNI, starting from next year. We presented this budget to the Norwegian Parliament in the midst of the financial crisis. It is important that we maintain our ambitious targets for ODA.

However, other capital flows are still more important to development. Foreign direct investment is more important. Trade and export earnings are more important. So are remittances. I will, however, use this opportunity to draw your attention to the most harmful capital flow in the world. I would urge you all to join forces to combat it and to put it at the very top of the development agenda. I am talking about illicit capital flows from poor countries.

Estimates indicate that the amount of money transferred illegally out of the poorest countries is ten times higher than total global ODA. This is completely unacceptable and must be stopped. 

We know the most effective remedy against illegal capital flows: it is transparency. As long as we accept that a huge part of our global economic system is operating in the shadows, outside state control, this evil will continue.

Corruption, tax evasion, drug money, financing of terrorism and financing of civil wars, it all comes together in illegal capital flows. And tax havens are at the core of the problem. This issue must be resolved if we want the world to move forward.

Transparency is the answer. And we should be very explicit about the need for tax havens to respect the principles of transparency.

A short while after the end of this conference, another conference will open in Poznan in Poland – the conference on climate change.  I believe it is paramount that we bring these two processes together. Development and adaptation to climate change are in reality the same issue. Climate adaptation is development, development is climate adaptation.

Preparing for hurricanes in the Caribbean or in Madagascar, controlling the great rivers coming down from the Himalayas, fighting drought in Mali – whatever the climate issue may be, it is also a development challenge.

In order to succeed, we need big money. I believe the only way we can raise the amounts needed is through the carbon market. Therefore Norway has proposed – in the climate negotiations – that 2 % of the allowances traded on the global carbon market should be auctioned and the money used for climate adaptation. This proposal alone would generate revenues in the range of 20 billion USD.

Many other issues also deserve our attention:

One is gender. We should make equal rights for men and women the basis for everything we do. Empowerment of women is extremely important for economic growth. Another issue is debt relief and illegitimate debt. We should continue the progress that has been made on debt over the last few years in the UN and the Bretton Woods Institutions. Again, we must not accept the financial crisis as an excuse for losing momentum on these important issues.

Let me conclude by saying that the financial crisis, as challenging as it may be, also represents an opportunity. It is an opportunity that the world cannot afford to miss. It is an opportunity to restructure the global system, to restructure the global institutions. It is an opportunity to green the world economy, and it is an opportunity to look into how we fight poverty.

We should be aware that we, our generation of politicians, are now facing the greatest uncertainty since the 1930s. We should take as role models the heroes of the great depression. People like J. M. Keynes or Franklin D. Roosevelt. They did not restore the global economy as it had been before the crisis. The crisis of the 1930s gave rise to pension schemes in many countries, welfare states in other countries, and state intervention in the economy in most countries. It was a completely transformed type of capitalism that came out of the crisis.

This is where we should look for inspiration these days. We need to restructure the global economic system. And we need to focus more attention on poverty. Above all, we need to transform our economies into low-carbon green economies. The financial crisis is an opportunity to achieve all of this.

Thank you, madam president.