Financing for Development Conference (Hansard, 11 April 2002)

§ Hilary Benn

Donors and developing countries committed themselves to a new partnership in the "Monterrey Consensus". Developing countries recognised that they need to set in place the right policies to create an enabling environment for foreign direct investment and for the mobilisation of domestic resources through promoting good governance and pro-poor economic policies. In return donor countries agreed to provide better support for developing country efforts to achieve the Millennium Development Goals 623W by: giving more official development assistance; enhancing aid effectiveness; ensuring better market access for developing countries; providing support to strengthen the capacity of developing countries to negotiate in international trade fora; ensuring that the HIPC process provides heavily indebted poor countries with a genuine exit from unsustainable debt; and taking steps to strengthen the voice of developing countries in the international financial institutions.

At the Barcelona Council on 15 March, the European Union agreed a package of measures to support the Monterrey Consensus. This included a commitment to increase EU development assistance. The EU average oda/GNI ratio is currently 0.33 per cent., and the EU has committed itself to raise this average to 0.39 per cent. by 2006. The implication of this is that the EU will provide an additional $20 billion of oda between now and 2006, and an additional $7 billion a year from 2006. The Americans followed the EU lead on aid volume by announcing that they would provide an additional $10 billion between 2004 and 2006 and $5 billion a year thereafter. This represents a 50 per cent. increase in US aid. Financing for Development is the first UN Conference that has delivered a concrete increase in oda, and the additional $12 billion a year from the EU and the USA represents a historic reverse in the decline in global oda levels over the 12 years.