General News

ECOSOC Meeting: Forum on Financing for Development

Note: A complete summary of today’s meetings will be available after their conclusion.

Ministerial Round Table 3

The first ministerial round table of the day was moderated by Marie Chatardova (Czechia), President of the Economic and Social Council.  Panellists included Abul Maal A. Muhith, Minister for Finance of Bangladesh; Mustafa Mastoor, Minister for Economy of Afghanistan; Régis Immongault, Minister for Economy, Forecasting and Sustainable Development Programming of Gabon; Batyr Bazarov, Minister for Finance and Economy of Turkmenistan; Fabio Kanczuk, Secretary for Economic Policy, Ministry of Finance of Brazil; and Admasu Nebebe, State Minister for Finance and Economic Cooperation of Ethiopia.

The lead discussants were Väino Reinart, Under‑Secretary of the Ministry of Foreign Affairs of Estonia; Noel González Segura, Director General of Planning and Policies for International Development Cooperation of Mexico; and Lidy Nacpil, Coordinator, Jubilee South Asia Pacific Movement on Debt and Development.

Mr. MUHITH said that when creating Bangladesh’s most recent budget proposal, his primary objective was to develop a larger budget because it presented an opportunity to provide more services.  The most important aspect of the budget was the mobilization of domestic resources, which had been increasing by approximately 11 to 12 per cent each year.  The budget was issued in two parts; one of which addressed revenue such as expenditures, while the other part focused on development and was meant for new projects and the acquisition of new assets.  That type of budget division had been in place in Bangladesh since 1958, he said, noting that personally, he preferred a unified, rather than divided budget.  Although in the past, budgets often contained new elements, that was not the case with the most recent budget proposal.  Budget implementation had been a weak point, despite the fact that a great deal of attention had been paid to it.

Mr. MASTOOR said that the 2030 Agenda for Sustainable Development could help nations to overcome the socioeconomic, environmental and security challenges they faced.  Afghanistan was committed to attaining the Sustainable Development Goals and had achieved great progress during the last decade, particularly in reducing infant and child mortality rates.  Nevertheless, there remained areas where his country lagged behind, including with regard to gender equality and poverty eradication.  In the last 16 years, $85 billion had been spent by the international community in Afghanistan; yet the most recent survey indicated that some 54 per cent of his people lived below the national poverty line, 24 per cent of the population was unemployed and the country’s imports stood at 91 per cent.  A development culture needed to be promoted across Afghanistan so that all stakeholders were speaking with one voice.

Mr. IMMONGAULT said that Gabon had a strategy in place that emphasized structural reform and set a certain dynamic for the private sector with a focus on macroeconomic stabilization.  His country needed to mobilize domestic resources to attain the future development goals, he said, noting that the private sector was a driving force, while tax systems needed to be reinforced to guarantee the mobilization of domestic resources.  The Government had created a new resource office to address tax fraud and repair the country’s fiscal system.  There were barriers in the system due to protectionism, which was a worrisome trend.  The Council should be a leader and push for a consensus that ensured that the progress that had been made was not compromised due to protectionism behaviour.  The international community must also be attentive and open‑minded regarding debt viability in developing countries, particularly those in Africa.

Mr. BAZAROV noted that Turkmenistan was among the first countries in the region that had nationalized the Sustainable Development Goals based on a three‑stage strategy developed in collaboration with the United Nations.  In 2017, it had put in motion a plan aimed at implementing the Goals in Turkmenistan and promoting sustainable development in the country.  Three main areas — sustainable economic growth, social well‑being and environmental security — were included in the midterm programme recently adopted in the country.  The policies being pursued in Turkmenistan were shaped around economic models for intensive growth based on the optimum use of natural resources, including those focused on energy and raw materials.  His country was carrying out far‑reaching reforms related to Government investment and subsidies, innovation and the development of human capital.  Of significant importance were efforts to increase the interlinkages between infrastructure to improve trade competitiveness.

Mr. KANCZUK said that Brazil was focusing on both private and public financing to help address its development needs.  Regarding private finance, two initiatives had been launched; one of which focused on green bonds, while the other dealt with performance bonds.  There was a lot of interest in Brazil with regard to the role of public finance for the attainment of the future development goals.  His country had found that the rates of return for specific projects could vary significantly depending on the particular project being evaluated.  Based on his country’s experiences, it was clear that private and public initiatives should not be viewed as substitutes for one another, but rather were complementary and had far‑reaching impacts on the development of countries.

Mr. NEBEBE said that Ethiopia had a five‑year development plan that had fully mainstreamed the Sustainable Development Goals as well as the Addis Ababa Action Agenda.  Regarding domestic resource mobilization, Ethiopia had heavily invested in its tax revenue mobilization capacity.  The Government had focused a great deal of attention on institution‑building and the reform of the country’s customs authority, while also establishing a new tax policy directorate.  Ethiopia had put in place a number of income tax laws in 2016, with the aim of increasing fairness in the tax system as well as broadening the tax base.  Further, the country launched an initiative with a view towards tax transformation for sustainable development, which sought to reform a number of priority areas.

Mr. REINART said that from his country’s experience, the use of information and communications technologies had a significant impact on tax administration.  First and foremost, the use of information and communications helped to reduce costs significantly.  Such technologies also helped improved the effectiveness of tax administration, particularly with regard to controls and audits.  Further, it enhanced the ability of tax administrations to counter all forms of illicit activities, including money‑laundering.  He went on to note that the inherent transparency created by the use of information and communications technologies helped promote good governance.  Estonia was eager to share its experiences with Member States and had directly engaged with other countries with a view towards educating them about their tax administration systems.

Mr. SEGURA underlined that the upturn of the global economy had created favourable conditions for development in Mexico and had resulted in more efficient economic processes, strengthened infrastructure and dynamics that allowed people and businesses to benefit from economic improvements.  Mexico recognized that tax collection was the key for development on the national level, and in that connection, it had put in place a strengthened fiscal system for collection.  He recalled that the Monterrey Consensus had identified the importance of an enabling environment that could offer prospects for trade and development without the risk of economic volatility.

Ms. NACPIL was pleased that the debt problem being faced by many countries was receiving the greater attention that it deserved.  However, that issue should not be referred to as a “looming” crisis, as there were currently several countries in a dire economic situation, some of which had been hit especially hard during the 2017 hurricane season in the Caribbean.  Although it was a positive development that climate finance was being discussed, it was not acceptable that climate finance was being discussed in terms of international development cooperation or official development assistance (ODA).  The private sector should contribute much more than it was currently providing to development and climate issues, although the modality for those contributions remained undefined.

In the ensuing discussion, a member of the civil society stressed that the international community could not address debt crises using unstable financial tools.  In that connection, he stressed that urgent progress must be made in the creation of better institutions that were designed to address debt crises.

Responding to the comment by the member of civil society, Mr. IMMONGAULT said that in some countries, high levels of public debt constituted a vulnerability when it came to the attainment of the Sustainable Development Goals.

Ministerial Round Table 4

The day’s second ministerial round table, also chaired by Ms. CHATARDOVA, included the following panellists:  Hadizatou Rosine Coulibaly, Minister for Economy, Finance and Development of Burkina Faso; George Gyan‑Baffour, Minister for Planning of Ghana; Mohamed Osman Suliman Elrkabi, Minister for Finance and National Economy of Sudan; Qahhorzoda Fayziddin, Minister for Finance of Tajikistan; P.A. Chinamasa, Minister for Finance and Economic Development of Zimbabwe; Jens Frølich Holte, State Secretary, Ministry of Foreign Affairs, Norway; Bary Emmanuel Rafatrolaza, State Secretary, Ministry of Foreign Affairs, Madagascar.

Lead discussants included Nim Dorji, Secretary, Ministry of Finance, Bhutan; Miguel Angel Estuardo Moir Sandoval, Secretary for Planning of Guatemala; and Michael Baldinger, Head of Sustainable and Impact Investing, UBS.

Mr. GYAN‑BAFFOUR stated that Ghana was preparing itself to move beyond aid by using all of its own resources effectively and attracting external private finances.  Ghana was taking steps and initiatives to increase domestic resources, including a national identification programme and a reform of the tax policy.  Long‑term investments in sustainable developments were insufficient.  Countries needed to reduce investment risk and develop enabling environments.  An open dialogue was necessary for a new trade agreement in favour of the Sustainable Development Goals.  Ghana had signed an agreement for an external partnership to ensure the resilience of cocoa price as the market was volatile.

Ms. COULIBALY said that Burkina Faso was going through an improvement of its general economy.  The country had developed a social strategy for 2016‑2020 that took into account the Sustainable Development Goals.  An in‑depth look at the tax system had been undertaken to modernize its collection system.  Information exchange with border countries needed to be improved and border agents had been trained with that goal.  Online tax payment would be established thanks to several partnerships.  The geo‑localization of merchandise would allow the country to locate trucks and ensure that merchandise would pass through customs.  A census would be implemented which would also help the tax reform.  A one window system had been established to facilitate the creation of business in the country.  She noted that despite the efforts undertaken, ODA had decreased and called on the international community to follow through with its commitment.

Mr. SULIMAN ELRKABI said that plans in Sudan were aligned with the Sustainable Development Goals and other internationally agreed agendas.  The private sector was vital for the economic activity of the State.  The strategy for poverty alleviation was being finalized and was in line with the 2030 Agenda.  Sudan relied on its own resources and created institutions to follow up on the implementation of the Sustainable Development Goals.  Necessary measures were taken to increase tax collection as well as productivity.  The public deficit had been reduced and the poor were being assisted.  Sudan had signed a peace agreement and had lost more than 70 per cent of foreign resources.  His country was left to handle its reconstruction alone with high and costly loans.  Limited assistance from the Gulf had been received but difficult measures had to be taken considering how fragile the country was.  Sanctions imposed on Sudan for more than 20 years had challenged the economy and their repercussions were ongoing.  He called on the international community to provide the necessary finances where needed and to ensure the transfer of technology at a decent cost.

Mr. FAYZIDDIN said that Tajikistan implemented a national development strategy to incorporate the Sustainable Development Goals.  Eradicating poverty remained an issue for the country, and food and energy security, water access and climate change were also key challenges.  The trans‑Asian pipeline in Central Asia was amongst the key transportation projects that would help in implementing the 2030 Agenda.  Resources had to be mobilized, including from the private sector and from ODA.

Mr. CHINAMASA said Zimbabwe aimed to become a middle‑income country by 2030.  The implementation of the Sustainable Development Goals was a priority for his nation.  The infrastructure was dilapidated, and because of sanctions its economy had become largely informal and left in political and economic isolation.  Public‑private partnerships were facilitated through reforms.  The Government should be given the necessary, disaggregated data on the informal sector in order to put together necessary policies.  Obstacles for doing efficient business should be identified.  Tax collection had to be improved and a cargo tracking system had been established which would improve revenue.  The lack of control over the currency was a major challenge.  Agriculture was a priority for the Government so it could stimulate the rest of the economy.

Mr. FRØLICH HOLTE stated that, despite the opportunity the upturn in the global economy provided, caution had to be applied.  The private sector had to redeploy their assets.  Norway supported action to support the multilateral trade system.  The potential for domestic resource mobilization, including through taxation, was important.  Tax aid served as an effective tool and a great opportunity.  A looming debt crisis was a potential trap.  Financial intelligence units had to be invested in order to avoid the threat of illicit financial flow.

Mr. RAFATROLAZA said that Madagascar adopted a modernization strategy to improve State revenue.  The Government had implemented new legislation on public‑private partnerships with solid results including on renewable energy.  The business environment had been improved, including through the improvement of customs systems.  Madagascar faced several challenges to mobilize resources.  Climate change effects were the main challenge the country faced.  In addition, fiscal control had become more complex.

Mr. DORJI said that Bhutan was a small landlocked country with a small economy and a rising public debt, vulnerable to climate change impacts.  But the country had reduced poverty, and the Sustainable Development Goals had been integrated into their national plans.  Attempts were made to broaden the tax base.  Bhutan was committed to improving tax efficiency including through the introduction of modernized technologies.  Public‑private policies had been adopted.  The support of external partners remained critical.

Mr. ESTUARDO MOIR SANDOVAL said that the Sustainable Development Goals had been integrated in Guatemala’s policies since 2015.  Discussion on the expenses and assets of the country for health, water and education were ongoing.  Greater efficiency in aid and cooperation was an important goal.  Trade was a tool for local development with small- and medium‑sized enterprises.  There should be a revitalization for the criteria for aid to development.  South‑South cooperation would allow countries to share knowledge.

Mr. BALDINGER said that UBS was proud of its commitment to the Sustainable Development Goals, and that it was well placed to help meet its targets.  The financial markets were the most powerful tool for transformation by focusing on innovation and partnering to foster the change and generate investment for social good.  A UBS global gender equality fund had been launched to support Sustainable Development Goal 5.  The role of the investment community would be crucial and new innovative partnerships would be key to meeting the Goals.

A representative of Public Service International (Ghana) said that poverty and unemployment of youth were very high in their country, and that environmental degradation was a reality.

Another representative of African civil society denounced the lack of ambition of the continent’s leaders towards fighting illicit flows of more than $50 billion a year which had weakened domestic resource mobilization in Africa.

Interactive Dialogue

Moderated by Zain Asher, Anchor, CNN, statements were provided by:  Ms. CHATARDOVA; Lesetja Kganyago, Chair, International Monetary and Financial Committee; Tudor Ulianovschi, President, Trade and Development Board, United Nations Conference on Trade and Development (UNCTAD); Dominique Bichara, Director, Corporate Secretariat (on behalf of the Chair of Development Committee), WBG.

Opening remarks were delivered by Merza Hasan, Dean of the Board of Executive Directors, WBG; and Aleksei Mozhin, Dean of the Executive Board, International Monetary Fund (IMF).

Ms. CHATARDOVA said that the financial damage caused by natural disasters added up to hundreds of billions of dollars every year and some of the most vulnerable countries were heavily affected.  More resources had to be mobilized and risk and resilience had to become part of relevant budgeting and financing processes in all countries.

The digitalization of the economy offered the potential for many countries to quickly move up the productivity and income ladder, she continued, however rules and regulations had to ensure that such benefits were shared evenly and risks were minimized.  Tax administrations of developing countries should not be left behind because of their financial and technological constraints.  Developing countries had to be supported to develop tax norms and standards that were consistent with the progress at the international level on the taxation of the digital economy.

Mr. ULIANOVSCHI stated that the global economy had not been able to take off, and the existing threat of climate change was on a massive scale.  Financing for development required a new approach to development.  The key of the Sustainable Development Goals was that development was universal, not an intellectual and abstract exercise.  UNCTAD offered a transformative process by nature, as was financing for development.  The Conference was transforming the way they worked.

Mr. KGANYAGO said that 15 years on, the outcome of the Monterrey conference remained a valid reference point.  During that time the world had made significant progress in reducing poverty levels, increasing the provision of basic services and promoting women’s equality, although that progress had slowed following the 2008 global economic crisis.  Delivering on the promise of leaving no one behind would require policy actions and reforms which were often politically difficult, he said, adding that the current upturn in the global economy provided an important opportunity.  He stressed the need to enhance economic resilience in both low- and high‑income countries.  Shocks, including those from the economic impact of disasters, could not be underestimated and could be more severe depending on the size of the States involved.  Raising the potential for stronger and more inclusive growth was a priority.

Ms. BICHARA said that the Development Committee had a fruitful meeting during the spring meetings of the World Bank and IMF.  The financial package agreed upon was considered transformative.  Development progress remained uneven.  The private sector needed to play a more important role on development and poverty reduction.  The value of multilateral development banks was recognized.

Mr. HASAN said financing for development was a key forum for the Sustainable Development Goals and eradicating poverty.  The private sector was key going forward, but ODA was still very much needed for developing countries.  Partnerships were needed between all players to involve the private sector.  Supporting domestic resource mobilization was key.  Some countries were late on the implementation of the 2030 Agenda.

Mr. MOZHIN said that IMF and the World Bank were committed to supporting countries suffering from climate change effects and building resilience.  Financial integrity and resilience were also supported and encouraged by some IMF initiatives.  The Fund would continue its role on tax issues and the mobilization of national resources, with technical advice to developing countries amongst other initiatives.  On trade and global unbalances, IMF would conduct a rigorous assessment of excessive global unbalances.