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flying albatross International Conference on Financing for Development, Monterrey, Mexico 18-22 March 2002 United Nations

UN Finance for Development conference - Monterrey  - jump to summary of the conference  key points

' Always look on the bright side!'

Campaigner's can 'look on the bright side' as both the EU and USA promise up to $12bn/a of additional aid funding!  Whilst this is far short of the $54bn/a aid needed to meet the MDGs, it represents a significant increase in aid and could deliver five times as much new cash / year as the Jubilee campaign has delivered so far.  

Prior to the conference, the USA had been adamant that there would be no more aid and had lobbied to block reference to the 0.7% target etc etc.  In Europe Germany led a campaign to limit any EU commitment, with the support of Italy and Spain.

So the 'step in the right direction' in which aid promises have been made by both USA and EU must be seen as a sign that campaigning does affect politics.  The first announcement was that EU would increase aid significantly, the reported figures were 0.39% of GDI, which would increase aid by $7bn from $30bn....but by 2003. see EU Press release 

Then there appears to have been almost a comedy act, with Dubya announcing $5bn over 3 years (i.e. $1.6bn/a). To be followed by what was claimed to be clarification which more than doubled it.  Who will ever know whether it was just Dubya getting the script wrong or a some very fast footwork in response to the howls of protest at the parsimony of the initial offer. The new offer is a 50% increase !! from $10bn/a to $15bn/a  see USA statement  As ever the USA aid is prescribed by onerous conditionalities, will largely be spent on USA goods and services, but it’s a ‘small step for mankind'!!

Even now it's not that clear - see the report from Eurodad below

To put this aid in perspective, Jubilee 2000 campaigned for the debt cancellation of the 52 heavily indebted poor countries.  The G7 governments only ever accepted 42 countries and although they promised $100bn in debt stock reduction, the progress so far has seen actual debt service payments reduced from $23bn to $21bn/a, just $2bn/a less.

From: "Eurodad" <jwolsey@eurodad.org>

When a 5 billion USD increase in aid suddenly becomes a 10 billion USD rise. A simple clarification, or the result of pressures by NGOs?

From today's WB development news:


Ahead of President Bush's visit to a development meeting in Monterrey, the US administration substantially overhauled a proposal to increase foreign aid Tuesday, doubling what the president had promised to spend to fight world poverty in coming years, the New York Times reports.

The revision came as many officials from both rich and poor nations, while welcoming the first commitment to increase American foreign aid in more than a decade, criticized Bush's original plan as tepid, especially in comparison with his much more robust commitment to increase military spending.

Officials in both Monterrey and Washington said Tuesday that the administration now planned to increase foreign aid spending by 50 percent over three years beginning in the 2004 fiscal year. The proposal would raise development assistance to $15 billion, from $10 billion by 2006, the officials said, and would not decrease it thereafter.

When Bush announced the original plan last week, he described a $5 billion development fund that would disperse grants for anti-poverty projects. Officials said then that the plan would increase foreign aid by 15 percent each year during the three-year life of the fund, and they made no commitment to keep spending more money after 2006.

While the Bush administration called the new total a clarification, it would entail a great deal more spending than the president and his top advisers first stated. If the foreign aid budget is to grow in equal yearly increments of $1.65 billion from 2004 through 2006, as officials said Tuesday was likely, the cumulative increase in spending would amount to about $10 billion over those three years, double the initial estimate. Late Tuesday in Washington, Ari Fleischer, the White House spokesman, confirmed that the administration now favored a cumulative $10 billion increase over three years, bringing the foreign aid budget to $15 billion by 2006. Fleischer said the White House and the Treasury Department miscommunicated details of the package last week.

Also reporting, the Wall Street Journal says it was unclear whether the aid increase was the result of a botched public-relations campaign, in which Bush and his aides undersold the generosity of their own plan, or a last-minute response to criticism from the developing world, Democratic lawmakers and antipoverty activists.

The president is traveling to Monterrey, Mexico, this week for a United Nations conference on development aid, and the administration wants him to arrive on a positive note. "I welcome this clarification," said Sen. Patrick Leahy (D., Vt.), chairman of the appropriations subcommittee that handles foreign aid. "The need for a stronger U.S. role -- especially after Sept. 11 -- is clear, and it is urgent. . . . Foreign aid will not solve the world's problems, but it will make a difference, especially combined with U.S. leadership."

Meanwhile, reports Reuters, US Treasury Secretary Paul O'Neill, testifying to a Senate appropriations subcommittee, said the US could increase its aid budget as early as the current fiscal year, if the right measurement tests have been put in place. "We should not rule out the possibility of beginning this idea in the fiscal year 2003," O'Neill said. "It is not out of the question that we should come to agreement among ourselves about the measures."

The 2003 budget has already been sent to Congress for approval with a Treasury request for $1.4 billion for international programs, but the administration can request supplements to it at any time. The so-called millennium challenge fund will be tied to "clear, concrete and objective" criteria Bush has directed O'Neill and Secretary of State Colin Powell to draft, in order to measure economic and political reform progress in poor countries.

Bloomberg adds O'Neill said the Bush administration wants Congress to reduce restrictions on votes that U.S. officials cast at the World Bank and IMF. "There are 32 directed-vote mandates and over 100 policy mandates, plus numerous reports, certifications and modifications,'' O'Neill said in the text of remarks to a Senate Appropriations subcommittee. "I would like to work with you rationalize and focus our mandated reports and requirements."  BACK TO TOP 




Key Points

This is a vital conference for the world powers to confirm their commitment to the Millennium Development Goals and how they will be financed.


The draft communiqué is a fine 'Motherhood and Apple Pie' affirmation of the plans and strategies of the UN, World Bank, IMF, & WTO etc.   It has its value, in seeking clear and consistent goals, adopting common strategies and priorities.  BUT:-

No new monies are pledged


There are no new commitments to debt cancellation


It identifies a need for some $54bn/a of additional aid (ODA) - (note - this compares with some $57bn currently, which has been falling since 1990)

It calls for  industrialised countries to meet the UN target of 0.7% GDP in aid (ODA) - the current level is just 0.24%.


Debt/HIPC.  There is just one reference to the possibility changing the terms of HIPC, such that

"sustainability should be assessed in terms of each country’s capacity to raise the finance needed to achieve the millennium development goals."


Interestingly, in view of the unfair trade barriers under WTO agreements, , it is pointed out that if trade were fairer, there wouldn't be the need for so much aid! (this is in a supporting document from the World bank/IMF)

The conference is structured into major topics listed below.  This table has links directly to the relevant sections of the UN FfD web site.  Key papers and comments are available on the JDC web Group site.


FfD Themes

Links to official FfD site

Key papers on JDC web site


Draft Communique

World bank/IMF submission Sept 18 2001

Domestic Resources


Private Flows



Summary of Papers


Summary of papers


Summary of papers

Systemic Issues

Summary of papers

(includes Global Goods, e.g. AIDs)

Staying Engaged


Related High-Level Policy Texts and the FtD Agenda
(updated weekly)



Jubilee Web Group - last updated  26 Januar 2003