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Friday, 22 March, 2002, 17:06 GMT
Head-to-head: Fighting poverty
Heads of state gathered in Monterrey are trying to work out what to do about the fact that 1.2 billion people live in absolute poverty.

It is the first time the UN and the global financial institutions - the World Trade Organisation (WTO), the International Monetary Fund (IMF) and World Bank - have come together to participate in a high-level summit.

Zo Randriamaro of the Third World Network says the free market - or economic liberalisation - agenda dominating the conference is trading away the human right of development for the world's poorest.

But Mike Moore, Director General of the WTO, says that reducing barriers to trade and investment is the best way to reach the UN's goals on poverty reduction.

Zo Randriamaro has travelled from Ghana to represent the Third World Network - a Malaysia-based think-tank working on globalisation issues - at the Monterrey summit:

The "Monterrey Consensus" - the final outcome of the last preparatory meeting for the Financing for Development summit, represents the sacrifice of the right to development of developing countries to the "free trade" interests of rich countries.

It is not a consensus on financing development, but on the reinforcement of the so-called Washington Consensus.

UN development goals
Halve poverty and hunger by 2015
Universal primary education
Promote gender equality
Reduce child mortality
Improve maternal health
Combat HIV/Aids and other diseases
Ensure environmental sustainability
Develop a global partnership for development
The Monterrey Consensus document is akin to a manifesto aimed at legitimising neoliberal globalisation - with its economic orthodoxy and institutional arrangements - regardless of the recurrent tragedies in East and South East Asia, in Argentina, and on 11 September which have accompanied its expansion.

The Monterrey Consensus document that should be approved by heads of states this week represents a setback in the advancement of the UN development agenda.

There is no sense of urgency, or commitment to address the fundamental problems of financing for development, including debt cancellation.

What could have brought about significant progress both in terms of redistribution and innovative sources of finance has been removed from the text.

This includes: the Tobin tax - a suggested tax on international currency transactions; and the proposal about the financing of Global Public Goods - "goods" such as a justice system or widespread education that once produced, benefit all.

The Monterrey Consensus reduces development to increased trade and investment liberalisation in developing countries.

This is despite the increasing evidence that trade liberalisation in most African countries is undermining the livelihoods of small producers and vulnerable social groups, especially women who support a major part of the costs of the new policy and barely have access to its benefits.

As gender and women's rights activists have pointed out, development as a human right has been traded away.

Mike Moore, Director-General of the WTO - in excerpts from his address to delegates at the Monterrey conference:

Poverty in all its forms is the greatest single threat to peace, democracy, human rights and the environment.

It is a time-bomb against the heart of liberty; but it can be conquered and we have the tools in our hands to do so.

One of these tools is trade liberalisation. It can make a huge contribution to the generation of resources for the financing of development...

Recent studies have estimated that the cost of achieving the core Millennium Development Goal of universal primary education could be in the region of US$10bn per year.

Yet developing countries would gain more than 15 times this amount annually from further trade liberalisation, according to one study by the Tinbergen Institute.

The staff of the IMF and World Bank estimate that reaching all seven of the Millennium Development Goals would require an additional US$54bn annually - just one-third of the Tinbergen estimate of developing country gains from trade liberalisation.

And the World Bank's Global Economic Prospects report estimates that abolishing all trade barriers could boost global income by $2.8 trillion and lift 320 million people out of poverty by 2015...

This conference is about financing development in an era when private foreign direct investment outnumbers overseas aid four-fold, and is 10 times the World Bank's development lending.

Knowing that no country has too much invested, we should encourage an international agreement on investment...

So the way forward is clear. Leaders at this conference should instruct their trade ministers to ensure that their officials cast aside the petty mercantilist methodology which has pervaded trade negotiations for so many decades, in favour of a grand bargain that would see trade barriers dismantled. Then trade can play its important role in generating finance for development.

See also:

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12 Mar 02 | Business
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30 Jan 02 | Business
Debate: Business versus development
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