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UN High-Level Intergovernmental Event in 2001
Background Paper
by Jens Martens World Economy, Ecology & Development Association (WEED)
Original document in German Translated into English by CIDSE
May 2000
For comments: Please contact Jens Martens: [email protected] or Eva Hanfstaengl: [email protected]
N.B. The analysis and proposals presented in this paper do not necessarily reflect the views of all CIDSE organisations. Translation of a German Background Paper to be published by the German NGO Forum on Environment and Development and World Economy, Ecology and Development Association (WEED) in June 2000.
The Future of Financing for Development
UN High-Level Intergovernmental Event in 2001
Background Paper
Editor:
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Author: Jens Martens
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Ó Bonn, May 2000
2 Contents
Introduction
Table of contents
List of tables and charts
Abbreviations
Part I: Development financing in crisis
Part II: Key themes of the FfD process
1. Mobilisation of domestic resources 2. The future of ODA 3. Sustainable debt? 4. Private capital for development? 5. New global financial instruments 6. Reform of the international finance system
Part III: Towards the UN Conference on Financing for Development
Part IV: Information
· Official sources of information · Campaigns and initiatives · Literature
List of tables and charts
Table 1: Net resource flow from the DAC Member States and multilateral donors to the developing countries in 1991-1998 Table 2: Foreign indebtedness of the developing countries
Chart 1: Drop in DAC ODA effort since 1992 Chart 2: Total net long-term flows to developing countries, 1969-1998
3 Abbreviations
ACP Africa, Caribbean, Pacific ATTAC Association pour une Taxation des Transactions financières pour l’Aide aux Citoyens BIS Bank for International Settlements BMZ Bundesministerium für Wirtschaftliche Zusammenarbeit und Entwicklung/Federal Ministry for Economic Co-operation and Development BWI Bretton Woods Institutions (IMF and World Bank group) CSD Commission on Sustainable Development DAC Development Assistance Committee (OECD) ECOSOC Economic and Social Council (UN) ESAF Enhanced Structural Adjustment Facility EU European Union FfD Financing for Development FSF Financial Stability Forum G 77 Group of 77 GA General Assembly (UN) GATT General Agreement on Tariffs and Trade GDP Gross Domestic Product HIPCs Highly Indebted Poor Countries IMF International Monetary Fund LDC Least Developed Country MAI Multilateral Agreement on Investment NGO Non-Governmental Organisation OA Official Assistance ODA Official Development Assistance OECD Organisation for Economic Co-operation and Development PPP Public-Private Partnership PrepCom Preparatory Committee PRGF Poverty Reduction and Growth Facility RES Resolution TNC Transnational Corporation UN United Nations UNDP United Nations Development Programme UNCTAD UN Conference on Trade and Development WTO World Trade Organisation
4 Introduction
In 2001, for the first time in its history, the United Nations will be staging an International Conference on Financing for Development. Its objective is to find ways out of the permanent financial crisis of the countries in the South. The range of topics on the agenda runs from the future role of official and private capital flows to institutional reforms in the world financial system. The United Nations is thus moving into an area which until now has primarily been dominated by the Bretton Woods Institutions and the World Trade Organisation (WTO).
Three trends have obviously encouraged the willingness of the governments to discuss the future of financing for development in a dedicated conference: the traditional official development assistance (ODA) is mired in crisis and drifting ever further from the goal of ‘0.7 per cent’; the international flows of private capital (including direct and portfolio investments) have mushroomed, without the majority of developing countries having so far profited from them; and the financial crises of the past years have shown up the increased need for regulation and harmonization within the global monetary and financial system.
It is not clear whether the UN process will offer a way out of the impasse to which North/South negotiations in past years have almost automatically led when it came to questions of financing. If the governments settle for ‘Business as usual’, then the conference is doomed to failure from the start. However, if the (new) social-democratic dominated governments in many western industrialised countries use this process in order to demonstrate at least a gradual shift in international development policy, then the conference could bring progress. However, a repeat of the historic Bretton Woods conference is not very likely.
As they did in the world conferences of the 1990s, non-governmental organisations (NGOs) will contribute to the dynamic of the negotiating process. The outcome of the conference will also depend upon their impulses and the pressure which they exercise on their governments. The moment for this, given the current debate about a reform of the IMF and after the (provisional) failure of a new round of liberalisation at the WTO ministerial meeting in Seattle is more propitious than ever.
Bonn, April 2000
5 Part I
Development financing in crisis
Issues of development financing have formed the central plank of the North/South debate since the 1960s. They are the most important yardstick for the state of development policy, for unlike the rhetoric of development strategies and international action programmes, the provision of financial resources unambiguously reflects the priorities of the ruling policy. This applies equally to States’ domestic budget allocation and to inter-State financial transfers.
If the level of official development assistance (ODA) is taken as an indicator, then the state of development policy is parlous. Because while the need for resources, for example to combat poverty, for humanitarian aid and for global environmental protection is globally rising, official funding for these purposes has been falling for years, without any basic upturn in the trend being in sight. At the world conferences in the 1990s, it was mostly the passages about ‘means for implementation’ that remained disputed to the end between North and South. The fact that it has ultimately proved impossible to bridge the gulf between the need for financing for environmental and development policy action programmes at these conferences and the readiness of the governments to pay is a prime reason behind the slow progress on implementing the decisions of the summits from Rio (1992) to Rome (1996).
Development financing is in crisis – and not just since the 1990s. If we survey the North/South debate over the last four decades, the crisis looks more like a permanent state of affairs. As early as the end of the 1960s, the Pearson report spoke of an ‘atmosphere of waning interest in development aid’ in the industrialised countries, and ‘signs of despondency and growing impatience’ on the side of the developing countries. Even at this stage, the expert panel around Lester Pearson noted an ‘acute crisis’ in development assistance. At the time, they suggested one solution might be trade concessions for the developing countries, the encouragement of private direct investments in the South and the increasing of official development assistance to 0.7 per cent of gross national product.
Over the last 30 years, very little has changed about these demands – in contrast to the political and economic framework conditions within which the development of the South is occurring. The policy of economic deregulation and the end of the stand-off between the Western and Eastern blocs have led, over the last ten years, to a speeded-up process of economic globalisation, which has manifested itself in a dramatic rise in transnational movements of goods and capital. While some economies in the South – in particular South-East Asia – initially profited from the wave of globalisation, many countries remained excluded from the process of economic development, especially the countries of sub-Saharan Africa. The result is a dramatic deepening of the gulf between rich and poor. While the ratio between the income of the poorest 20 per cent of the world’s population and the richest 20 per cent was still 1:30 in 1960, it had deteriorated by 1997 to 1:741. In the meantime, the wealth of the three richest people on earth now exceed the gross domestic product (GDP) of the 48 least developed countries (LDCs) combined2.
The financial crises of recent years in South-East Asia, Russia and Latin America have further exacerbated the situation. The burgeoning Asian economies have now become the very victims of globalisation. National income in Indonesia, Malaysia, the Philippines and Thailand dropped by 9% in 1998 alone as a result of the crisis. Unemployment and poverty have increased, and other social indicators have likewise declined3. Calls for improved control and ‘re-regulation’ of the finance markets have been growing ever more insistent since then.
Most of the industrialised countries were not prepared to counter the trends towards poverty and crisis by making more funds available for official development assistance – on the contrary. With the end of the struggle between the political systems for spheres of influence in the South, interest in North/South co-operation also evaporated. In the face of economic and social problems at home, the willingness to provide financing for development receded further. The consequence: official
1 Cf. UNDP, Human Development Report 1999, p. 46 (the page numbers refer to the German edition). 2 Ibid., p. 44. 3 Cf. UNIC Bonn, Kein Grund zum Jubel - UNCTAD’s Analyse der Weltwirtschaft 1999. Press release UNIC/199, 20 September 1999.
6 development assistance from the OECD countries today is further away from the target of 0.7 per cent than ever before4.
At the same time, private capital flows into the South rose dramatically until 1996. The share of official financial transfers in the total net capital flows from North to South was further reduced because of this. Table 1 shows the development of the net resource flows from the industrialised countries5 to the South.
Table 1: Net resource flow from the DAC Member States and multilateral donors to the developing countries in 1991-1998 (in billion US dollars)
1991 1992 1993 1994 1995 1996 1997 1998 (e) I. OFFICIAL DEVELOPMENT 84.5 78.3 82.4 84.5 87.6 73.5 75.3 88.3 FINANCE (ODF) 1. Official development co-operation 57.1 58.3 55.5 59.6 59.1 55.8 47.7 49.7 (ODA) (a) of which: bilateral 41.4 41.4 39.4 41.3 40.6 39.1 32.4 35.1 multilateral 15.8 17.0 16.1 18.3 18.4 16.7 15.3 14.5 2. Official assistance (OA)(b) 6.6 6.0 6.0 6.9 8.4 5.6 5.6 7.0 of which: bilateral 5.0 5.2 5.2 5.5 7.1 4.0 4.0 4.5 multilateral 1.6 0.8 0.7 1.3 1.3 1.5 1.6 2.5 3. Other official contributions 20.8 14.0 21.0 18.1 20.1 12.2 22.0 31.7 of which: bilateral 13.1 8.0 11.4 12.2 14.0 5.7 5.9 12.8 multilateral 7.7 5.9 9.6 5.8 6.1 6.5 16.0 18.9 II. EXPORT CREDITS (TOTAL) 0.6 1.0 -3.0 6.3 5.6 4.0 4.8 4.0
of which: short-term -0.8 0.5 -1.5 0.2 0.8 0.5 0.6 0.5 III. PRIVATE CAPITAL FLOWS 53.0 80.1 86.3 134.7 176.0 291.7 244.9 147.2
1. Direct investments 24.8 30.2 41.6 52.1 59.6 69.7 106.7 118.0 of which: in offshore centres 6.5 9.5 9.4 10.8 6.3 16.7 19.1 20.3 2. International bank loans (c) 10.7 34.6 4.8 32.1 76.9 86.0 12.0 -65.0 of which: short-term loans 12.0 25.0 7.0 44.0 40.0 40.0 12.0 -70.0 3. Loans 4.9 7.5 28.7 32.0 30.0 96.6 83.2 39.8 4. Other private capital flows (including 7.1 1.8 5.5 12.5 3.5 33.8 37.8 49.1 equity capital) (d) 5. Grants from NGOs 5.4 6.0 5.7 6.0 6.0 5.6 5.2 5.4
TOTAL NET RESOURCE FLOW 138.1 159.4 165.7 225.5 269.1 369.2 324.9 239.6 (I+II+III)
(a) Without released non-ODA debts for the years 1991 and 1992 (b) Official contributions according to ODA criteria to the transition countries (Eastern Europe and the CIS) (c) Without bond financing by banks (point III.2) and State-guaranteed finance credits (considered in point II) (d) Incomplete data for some DAC countries (including France, Great Britain, USA), as from 1996 including Japan (e) Estimated Source: OECD/DAC 1999 Development Co-operation Report, Table 1.
The governments in the industrialised countries are trying to compensate for falling development funding, by pointing to the growing importance of private investments for the development process, calling for more determined efforts from the countries in the South to mobilise their own domestic resources, and glossing over the quantitative deficits while focusing on the quality of the development assistance.
In fact, private investments are of exceptional importance to the development process, simply because of their volume. However, they help only if clear political decisions and multilateral rules ensure that they serve the purposes of environmentally sound and socially just development.
4 The 1999 Development Co-operation Report by the Development Assistance Committee (DAC) of the OECD noted a slight increase in the ODA share in GNP to 0.24% in 1998, but today the governments expecting a drop in the value to under 0.20% (cf. UNCTAD X Plan of Action (UN Doc. TD/386, 18 February 2000), paragraph 20). 5 More precisely, from the Member States of the OECD Development Committee.
7 Uncontrolled investment activity driven solely by ‘shareholder value’ will serve, on the contrary, rather to hamper lasting development than to promote it.
Likewise, the call for the mobilisation of domestic resources is not wrong. In many State budgets, there is enormous potential for savings and redistribution, which could be used to free up resources for activities relevant to environmental and development policy. Indeed, this applies equally to all countries. The industrialised countries could set a good example here and consistently apply long- overdue ecological and social fiscal reforms. These reforms could also release resources for development purposes, thereby depriving the common argument about empty coffers vis-à-vis the South of any substance.
Finally, there is also no objection to a greater focus on the quality of the financing for development (it is really more of a self-evident truth), if it means that the funding is spent, for example, more on basic social services (in the sense of the 20:20 initiative of the World Social Summit). However, the equation should not be quality or quantity, but instead, quality and quantity.
Public funding continues to play an important role as in central areas of sustainable development, simple blind faith in the forces of the market would lead to damaging or at best ineffective results. This is the case, for instance, in the areas of social security, health, education, infrastructure, cultural development and environmental protection, and for conflict prevention and the handling of civil conflicts. The provision of such national and global ‘public goods’ by governments and international organisations will require far more official funding than has so far been made available.
In order to overcome the crisis in financing for development, this stocktaking exercise raises a raft of key questions:
· How can additional domestic resources be mobilised for development purposes, and which international influencing factors need to be taken into account? · How can official financing for development escape from the ‘0.7% impasse’, and how can financial relations between North and South be placed on a more reliable footing? · What additional debt-reduction steps are necessary from the development policy angle, and what role should foreign credits play in future in the financing of development plans? · Are private investments an alternative to ODA, and what measures can be applied to ensure that they serve the interests of sustainable development? · How, at the international level, can we ensure reliable and adequate financing for global tasks (in the sense of the provision of global public goods), and what role can international taxes play? · How should the future division of tasks between the United Nations, the IMF and the World Bank look with regard to the mobilisation of resources and the establishment of the framework conditions for international capital transfers?
This working paper does not claim to deliver definitive answers to these complex questions. It is more a matter of highlighting a few central issues in the financing of development, in order to draw some political conclusions from them. These will be a contribution to the discussions in the preparatory process ahead of the UN Conference on Financing for Development in the year 2001.
8
Part II
Key themes of the FfD process
1. Mobilisation of domestic resources
When it comes to making proposals for the covering of the financing shortfall in the developing countries, the Western governments point first of all to the South’s own responsibility and call upon the governments there to mobilise more resources in their own countries. This line of argument suggests that in the past, the development processes in the South have been mainly financed from outside, but that now, with budget constraints, these countries can no longer be ‘drip-fed’ by the North. In fact, though, the transfer of official resources from the industrialised countries actually contributes only a fraction to the national product of the developing countries. In 1997, the net ODA share in the gross national product of all developing countries stood at 0.9% (in 1991 it was still 1.9%)6. These countries have always earned the lion’s share of their national income from their own efforts. But, this fact really should not be used as an argument to further decrease the transfers.
Nevertheless, there is also doubtless potential in the countries of the South for resources to be mobilised for the purposes of sustainable development. The recommended ‘recipes’ for this are well known:
· The construction of an effective tax system. In many developing countries, direct taxes such as income tax and real property tax are very low7. This has the effect of benefiting the rich elites in the country. For example, the UNDP finds that in many countries in South Asia, agriculture accounts for over a third of GDP, yet contributes less than 6% to tax revenue. A real property tax on large-scale property holdings would lead to considerably higher revenue in the region8. This applies in many countries also to the introduction of a progressive income tax. However, the fundamental principle underlying the concepts of an ecological tax reform in the industrialised countries, namely taxing the use of resources more heavily and at the same time relieving the burden on work, should also be taken into account in the developing countries. · Restructuring of State spending. Cuts in defence spending and environmentally damaging subsidies (e.g. in the energy sector) still remain one way of releasing sizeable amounts of resources which would then be available for development purposes, for example in the education and health sectors. Admittedly the share of defence spending in GDP in the developing countries fell on average from 3.1% to 2.4% between 1988 and 1996. However, at the same time, the share of public health spending declined from 2.0% to 1.8%, and spending on education fell from 3.9% to 3.6%9. · Increased mobilisation of savings. In order to increase the available investment capital at home, it is often suggested that the readiness of the population to save should be increased. This would strike the 1.5 billion people in the world who have to survive on less than one dollar a day as rather cynical. On the other hand, there are countless examples of savings associations and credit cooperatives which show that even in the informal sector, savings can be mobilised. The most frequently quoted example of the construction of a functioning savings and credit system at the local level is the Grameen Bank in Bangladesh. Initiatives by women play a central role in this field. However, it must be borne in mind that even now, the savings-income ratio (percentage of
6 Cf. UNDP, Human Development Report 1999, Table 15. However, ODA is of considerably greater importance for the national income of the poorer countries. Its share in the GNP of the LDCs in 1997 was 11.1%, and in some countries even much higher (e.g. in Guinea-Bissau 49.7%, Mozambique 37.4%, Madagascar 24.3% and Mauritania 23.9%). 7 Overall, the share of tax revenue in GDP in the richer countries is much higher than in the poorer countries. UNDP figures show that in 1997, the share in countries with a high Human Development Index (HDI) averaged 26%, while it was only 13% in those with a moderate HDI. For countries with a low HDI, these figures were revealingly enough only partially available. They range from 17% (Zambia) to 6% (Bhutan). Cf. UNDP, Report on human development 1999, Table 12. 8 Cf. UNDP, Human Development Report 1999, p. 116. 9 Cf. UNDP, Human Development Report 1999, Table 13, and UNDP, Human Development Report 1998, Table 13. The figures for health spending relate to 1990 and 1995, and those for education spending to 1985 and 1996.
9 gross domestic savings in GDP) in the developing countries is 27%, which is substantially higher than the 21% figure in the industrialised countries10.
The capacity of the States to provide (extra) resources for development purposes is, however, considerably constrained by international framework conditions. Four factors play a major role here:11
· The liberalisation of world trade. This leads to lower tariffs and thus to a reduction in tariff earnings and therefore government revenues. Because tariffs represent an important source of revenue for many countries12, their removal would lead to serious financing problems for these countries unless corresponding compensatory arrangements were put in place. · The globalisation of business activities. This allows businesses operating across national borders to use transfer pricing to generate profits in those countries in which their taxation interests are most profitably served. In many countries, this has led to a drop in revenue from corporate taxation. The explosion in e-commerce may further restrict States’ ability to levy taxes. · International taxation competition. The level of taxation rates is an important investment criterion. In order to attract foreign investment capital into the country, or to hold on to domestic capital, recent years have seen the emergence of competition to drive taxes downwards (‘race to the bottom’). In addition, many export processing zones levying little or no corporate tax have been established. All this is happening to the detriment of the State budgets, which therefore have to cope more and more with revenue shortfalls. This does not affect just the countries in the South. For example, while a company like BMW still paid 545 million DM to the German tax authorities in 1988, five years later, the corporation recorded losses at home – in spite of globally higher profits and unchanged dividends – and got a rebate of 32 million DM from the tax authorities. In 1994/95, on profits of 2.1 billion DM, Siemens paid the German tax authorities less than 100 million, and no more at all the following year. And the Commerzbank, too, paid less than 100 million DM to the State on its profits of 1.4 billion DM in 199513. · The increase in the shadow economy. The economic globalisation is accompanied by a growth in untaxed economic activities (such as the drugs trade, illegal employment etc.). In the meantime, it is estimated that the scale of the shadow economy in countries like India, Chile or Kenya amounts to 20% of GDP, while in the EU it is 25%, and revenue shortfalls in Russia are more like 50%.
While the countries of the South have little influence on these developments, economic liberalisation and tax dumping are being actively accelerated by some of the Western governments. These call for greater efforts by the developing countries, while on the other hand undermining the possibilities of achieving these through their own economic and financial policies.
But the demand for greater mobilisation of domestic resources for development is actually rebounding against the governments of the Western industrialised countries, for the recipes they suggest to the States in the South could also be used at home in order to generate extra resources for the purposes of sustainable development. This applies equally to the income and expenditure sides of the State budget sheets. On the income side, relinquishing the lowering of the top tax rate for the highest earners, the consistent taxation of high earnings, the harmonisation of income and corporate taxes at the EU or OECD level, and the introduction of new, internationally standardised taxes, for example on the consumption of resources and exchange rate speculation (see Part II, Chapter 5), could deliver extra resources.
On the expenditure side, it tends – as in the countries of the South – to be mainly defence spending and subsidies that harbour enormous potential for redistribution. A consistent reduction in defence spending would free up significant resources. This also applies to the scaling down of many hidden and clear subsidies which serve to promote environmentally damaging production and consumption behaviour. These include such diverse instruments as export subsidies for agricultural product surpluses, state guaranteed export credits (e.g. for dam building or arms exports), underwriting
10 Cf. UNDP, Human Development Report 1999, Table 12. However, the savings ratio varies very widely within the developing countries. While it is only 11% in the LDCs, it is 39% in the East Asian countries. 11 Cf. for what follows: UNDP, Human Development Report 1999, p. 114f. 12 In the period 1990-96 the percentage share of revenue from trade taxes in State income in Lesotho was 54.8%, in Madagascar 47.2%, in Mauritius 40.6%, in the Dominican Republic 40.4% and in Lebanon 40.2% (UNDP, loc. cit.). 13 All examples come from: Hans-Peter Martin/Harald Schumann: Die Globalisierungsfalle. Reinbek 1996, p. 271 ff.
10 guarantees for products from the arms industry and the exemption of certain sectors of industry from mineral oil tax. According to a study by the Dutch Institute for Research on Public Expenditure, between 700 and 900 billion US dollars is spent every year world-wide on subsidies in only four economic sectors (water, agriculture, energy and road transport) – often with devastating effects for the environment14. Even if part of the subsidies were retained for social and political reasons, that would still leave hundreds of billions of US dollars every year, which could be redirected towards sustainable development.
2. The future of ODA
The most visible sign of the crisis in financing for development is the continued downwards trend in development assistance in recent years. ODA contributions by all OECD countries fell from the previous high of 59.6 billion US dollars in 1994 to 49.7 billion in 1998, and their share in GNP accordingly fell from 0.30 to 0.24%15. Because private net capital flows in the same period rose significantly, the ODA share in the overall resource flows from the North to the South fell from 41.4% in 1991 to a scant 20.7% in 1998. This trend also marks a shift in importance from official to private capital flows (cf. Table 1).
The OECD’s development committee calculates in its most recent report on development co- operation that the deviation of official development assistance compared to the long-term average of 0.33% ODA/GNP between 1992 and 1998 alone has lost the countries of the South 88.7 billion US dollars (see Chart 1). By today, the figure is well over 100 billion US dollars.
Chart 1: Drop in DAC ODA effort since 1992
Source: OECD/DAC
This international development is also reflected at the national level in some countries. The budget of the German Federal Ministry for Economic Co-operation and Development (BMZ), for example, was reduced between 1995 and 2000 from 8,051.7 million DM to 7,102.5 million DM. The ODA share in gross national product fell during that period from 0.31% to a likely 0.20% and is thus further than ever from the goal of 0.7%. The savings policy of the German government will also place an undue
14 Cf. André de Moor and Peter Calamai, Subsidizing unsustainable development: undermining the earth with public funds. San José: Earth Council, 1997. 15 OECD/DAC, 1999 Development Co-operation Report, Table 1 and Chart IV-1 (figures for 1998 provisional).
11 burden on the development assistance budget in the years ahead. According to the medium-term planning, by 2003 the budget will fall to 6,703.9 million DM, with the share in the total federal budget then standing at only 1.3% (compared with 2.5% in the 1980s)16.
The situation at the UN level is even more dramatic. The United Nations Development Programme (UNDP) has had to soak up drastic cuts in funding in recent years. The contributions of its members fell from about 1.2 billion US dollars in 1992 to 718 million US dollars in 199917. As a result, the UNDP had to shed many staff and scrap some projects. Germany is playing a fatal role in the vanguard of this development. Despite the talk in the red/green coalition agreement of a ‘reinforcement of the United Nations Development Programme’, since then the German contribution has been reduced by more than 50% to the low of 42.5 million DM for the year 2000 (as against 100 million DM in 1998 and even 138 million DM in 1993).
UNDP reacted to this development partly by reinforced co-operation proposals to the private sector, in order to use sponsorship to secure project funding from financially powerful businesses. These efforts drew strong criticism from the developing countries and NGOs, who feared that the UNDP was allowing itself to become the pawn of business interests18. The attempt to set up a special fund supplied by money from businesses (Sustainable Development Facility) was then shelved. Instead, UNDP Administrator Mark Malloch-Brown is now trying to give the development programme itself the image of a consulting firm. The UNDP is supposed, according to him, to be made into some sort of ‘McKinsey for the developing countries’19.
The Western governments are trying in three ways to make up for the cuts in their development resources. Firstly, they are laying heavy emphasis on the quality of the assistance, and thereby giving top priority to the fight against poverty20. However, this declaration of intent has failed to have much impact so far in terms of the material development policy. While for instance the German government has repeatedly pledged a greater concentration on basic social services in line with the 20:20 initiative from the world social summit, in terms of real development policy it has tended rather to move away from this goal. In 1999 the share of BMZ resources for basic social services was only 17.3%. The 20:20 working group of the German NGO Forum World Social Summit criticised this development in November 1999 roundly, noting that: ‘The BMZ is evading its international obligation to make an adequate contribution to the objective of combating poverty in the South’21.
Secondly, many governments are reacting to the shortage of resources by concentrating money on selected recipient countries. There is debate as to the criteria to be used to select the countries, and which countries will in future walk away empty-handed. There is a great risk that the level of need will play a less decisive role than foreign (economic) policy considerations and political good conduct. Given that the trend towards regional concentration can be observed in several industrialised countries, there is a danger that inadequate donor coordination is liable to shower some ‘model countries’ with resources while others are excluded.
Thirdly, ultimately the governments are trying to balance out the shortfall in development funding by greater recourse to public-private partnerships (PPP). In individual cases, this may be eminently sensible, for example when this type of co-operation with small or medium-sized enterprises means that technology transfer will increased and environmental protection or organic farming projects can be carried out which would otherwise be impossible. However, PPP is not suitable as a ‘patent prescription’, for it also runs the risk that precisely the priority areas of basic social services and poverty eradication will be short-changed, because they are not profitable for businesses. In addition, PPPs may have various negative side effects in development policy terms, for example because of
16 Cf. Thomas Fues, Die Bedeutung der Armutsbekämpfung im BMZ-Haushalt (13 September 1999), Bonn: Deutsches NRO-Forum Weltsozialgipfel/Arbeitsgruppe 20:20, p. 12. 17 Cf. UNDP Doc. DP/2000/1 of 16 November 1999, paragraph 15. 18 Cf. Joshua Karliner, A Perilous Partnership. The United Nations Development Programme’s Flirtation with Corporate Collaboration. San Francisco: The Transnational Resource & Action Center, 1999. 19 Cf. Interview with Mark Malloch-Brown in The Guardian on 27 February 2000. 20 An important conceptual basis for this qualitative fresh direction is the strategy paper by the OECD, Shaping the 21st Century: The Contribution of Development Co-operation. Paris: OECD, May 1996. 21 German NRO Forum World Social Summit/Working Group 20:20, Press release, 16.11.1999.
12 aid tying (in the case of co-operation with businesses in the donor country) and distortions in competition (in the case of the subsidising of a business in the recipient country)22.
All in all, the political reactions to the cutting of the development assistance budgets fail to solve the basic problem of the shortage of funds in the countries of the South. In fact they are distracted from that problem. Instead of concerning themselves with how to manage the shortages as efficiently as possible, the governments and parliaments should be using the current crisis to subject official development financing to a thorough-going review. The following aspects should be explored:
· In order to overcome at least partly the traditional dependency relationship between ‘donors’ and ‘recipients’, new forms of sustainable North/South co-operation need to be developed. Despite all its shortcomings, the co-operation agreement between the EU and the ACP countries could serve as an example here. The objective could be a Global Development Partnership Agreement (drawing on the economic partnership agreement that the EU favours). · The reliability of the official resource pledging would ease long-term development planning in the countries of the South. Therefore, there should be a contractual relationship between all countries with binding modalities whereby there would be virtually automatic transfers of resources at a level to be determined by reference to clearly defined development indicators. This form of a „global country financing offset“ is nothing fundamentally new, but it might mirror the example of the Structural Funds at EU level23. · So far, the ‘assessment criterion’ for the level of official development assistance has been the gross national product of the ‘donor countries’. The objective of 0.7% for the ODA/GNP ratio has established itself over the decades as a political criterion, although there is no conclusive justification for this value or this basis for assessment today24. Even if it is tantamount to breaking a taboo to question the objective of 0.7%, we need to rethink this issue. The scale of the official resources transferred to the South needs to be made dependent upon the real financing needs of the ‘recipient countries’. Putting a figure on these needs is undoubtedly complicated, although for certain individual areas, such as the costs for the world-wide provision of basic social services, estimated values do already exist. This need-oriented assessment of the North/South transfers required may result in a potential financing volume substantially in excess of the 0.7% objective. · In view of the often negative effects of financial transfers in the form of loans in terms of the indebtedness situation of the recipient countries (see Chapter 3), official resources should in the future be increasingly made available in the form of grants. Counter-proposals whereby resources for official financial co-operation would be applied only for subsidising interest or in the framework of mixed public-private financial instruments, in order to increase the leverage of the scant resources, are problematic, because they mean that the indebtedness position of the recipient countries is exacerbated. · Part of the official development resources is not used today for the specific national development requirements of the countries of the South, but for financing global public goods, such as the protection of the ozone layer, warding off global financial crises, or the promotion of international security. For this reason, it has been suggested that the present resources from the ODA should be renamed as ODA (C = country) and a new budget item called ODA (G = global) should be
22 In spite of this, the German Development Ministry places extraordinary importance on ‘development partnerships with the private sector’, and strives to carry out as many as possible of its bilateral projects in co- operation with private enterprises. For further information, visit http://www.bmz.de/ppp. 23 This proposal can be found in a similar form in e.g.: South Centre, Financing Development. Issues for a South Agenda. Geneva, 1999, p. 81. Keith Griffin and Terry McKinley argue in a study on new development co- operation approaches for a global safety net whose resources would be earned from a progressive income tax on the GNP of the rich countries, in order to be made available to the poorer countries in line with a fixed formula. Their appeal is unambiguous: „In creating a new framework for development co-operation, the objective should be to abandon the present system, where aid contributions are voluntary, the aid burden is distributed randomly and inequitable, and the aid flows are unpredictable because they are subject to annual appropriations by national parliaments. The world should move instead to a system where contributions to the aid effort are obligatory, the burden is distributed progressively, and the annual flows are predictable. The idea of a progressive international income tax to finance foreign aid is not new, and if development aid is to have a future and be more than marginal in size, the idea should be taken seriously.“ (Keith Griffin/Terry McKinley: New Approaches to Development Co-operation. New York: UNDP 1996 (ODS Discussion Paper Series No. 7), p. 16). 24 A similar line of argument is followed by: Roger Riddell, Aid in the 21st Century. New York: UNDP 1996 (ODS Discussion Paper Series No. 6), p. 3.
13 introduced for the financing of global public goods25. The (additional) resources for ODA (G) could be raised through new global financing mechanisms (see Chapter 5).
3. Sustainable debt?
The consequences of excessive foreign indebtedness continue to be a serious obstacle to development for many countries in the South. Instead of being dedicated to the construction of the education system, healthcare and the social infrastructure, in many countries the majority of the State income is used to service debts to private and official creditors in the North. The capital recovery from the South in the form of debt service payments stood at 316.1 billion dollars in 1998, a new all- time high (see Table 2). This was more than five times as high as the entire official development assistance in that year26.
Although in recent years new debt reduction measures, in particular for the 41 countries identified by the World Bank and the IMF as the most heavily indebted poor countries (HIPCs), have been agreed, foreign indebtedness in the developing countries has continued to grow (see Table 2). In its composition, however, it has changed significantly over the past two decades. In the 1970s and early 1980s, private banks in the industrialised countries were the main source of credit for the countries of the South. After the ‘outbreak’ of the debt crisis, the banks increasingly withdrew from this area of business, leaving the field open for governments and international financial institutions, primarily the IMF and the World Bank.
At the beginning of the 1990s, the second wave of private credit flows started in the South. Long-term bank loans played only a minor role here. The majority was made up of short-term loans and State foreign currency bonds. This new form of indebtedness by means of the issue of securities reached its highest level so far in 1996, when it stood at 96.6 billion US dollars (see Table 1). With this, a new group of creditors began to gain importance: private investors, primarily in the form of international pension and investment funds. They played a central role in the financial crisis in Mexico in 1994/1995. The particular problem with this new type of creditor arises when it comes to debt reduction negotiations. They are represented neither in the Paris Club of the State creditors nor in the London Club of the banks, and not involved in debt reduction negotiations, let alone debt cancellation initiatives. Even the Deutsche Bundesbank calls for the involvement of bond creditors in the context of a stronger involvement by the private sector in the solution of international debt crises, noting that: ‘In view of the increasing importance of the international bond markets, there has been a growing realisation that the service of bonds in a crisis can no longer be regarded as sacrosanct if the corresponding debt service obligations make up a significant part of the difficulties with the balance of payments’27.
Table 2: Foreign indebtedness of the developing countries
1980 1990 1998 1999 Total debt stocks 609.4 1460.3 2536.0 2554.0 (EDT) Long-term debts 451.5 1181.1 2030.3 2070.7 Short-term debt 145.6 244.6 411.9 402.3 Use of IMF credit 12.2 34.7 93.8 81.0 Total debt service 93.3 164.2 316.1 349.4 (TDS) EDT as % of GNP 20.3 34.2 42.1 41.5 EDT as % of exports 88.4 162.5 147.9 136.6 TDS as % of exports 13.5 18.3 18.4 18.7 In billion US dollars (unless otherwise indicated); exports = export earnings from goods and services Source: World Bank, Global Development Finance 2000, Vol. 1, p. 188.
The 1999 Cologne debt initiative, however, should bring debt relief for the group of HIPCs amounting to around 70 billion US dollars. However, this does not bring about a solution to the international debt
25 Cf. Inge Kaul/Isabelle Grunberg/Marc A. Stern, Global Public Goods. International Co-operation in the 21st Century. Oxford/New York 1999, p. 495. ODA(C) = ODA (Country). 26 Cf. World Bank, Global Development Finance 2000, Country and summary data, p. 32. 27 Cf. Deutsche Bundesbank, Monatsbericht, December 1999, p. 45.
14 problem, if only because the HIPCs do not even account for ten per cent of the foreign debt of all the developing countries28. In addition to extensive debt relief initiatives going beyond the group of the HIPCs, this would also require a fundamental review of the criteria for debt sustainability29 as well as institutional reforms in international debt management. On top of this, the Bundesverband deutscher Banken also notes, entirely pertinently, that:
‘(debt rescheduling and debt relief) can succeed only if the conditions are in place to ensure that future resources from international loans will be used primarily for productive purposes. Otherwise, the effect will be simply to create a fresh cycle of indebtedness’30.
This raises the basic question of whether after debt relief, new foreign credits or loans can really be a meaningful instrument for development financing. This likewise applies for the official resource transfers which are issued largely in the form of loans, even though under favourable conditions31. Any increase in this kind of development assistance also automatically means an increase in the foreign indebtedness of the recipient countries.
This should not mean that taking up foreign loans is fundamentally damaging to development. Under clearly defined conditions, such loans can make perfect economic sense:
· The resources must be used not for consumption purposes (for instance oil imports) or for unproductive facilities (for example defence spending), but instead, for highly profitable investments from the profits of which the debt can be serviced. · Because repayments generally require to be made in foreign currency, the currency required for this must be earned directly or indirectly by the venture financed (particularly by means of additional export earnings). · In terms of the whole economy, the balance of payments of the recipient country must be improved thanks to the measures financed to such an extent that the repayment of the loan and interest can also be ensured over the long term. Any possible negative secondary effects of the investment in terms of the balance of payments must also be taken into account (for example increased imports of raw materials, primary products, spare parts, etc). · Finally, in the assessment of the sustainability in development terms of the foreign loans, precisely because of their long duration, account must be taken of possible fluctuations in exchange rates, particularly the negative effects of the devaluation of the domestic currency for the ability to make repayments.
These criteria are necessary, although in no way sufficient, conditions for gauging the advisability in development policy terms of foreign loans. For even a highly profitable investment, which also earns the necessary foreign currency (for example a chemical works or an oil extraction plant) can, in social and ecological terms, be counterproductive for the development of a country. In addition, every foreign loan, however sensible the venture it is financing, does raise the pressure to earn additional currency and thereby increases the long-term dependency of the country upon the international financial markets.
28 Cf. Barbara Unmüßig/Miriam Walther, Armutsbekämpfung mit dem IWF? Eine kritische Einschätzung der Kölner Schuldeninitiative. Bonn: WEED, February 2000. 29 Scientists and international finance institutions have been stepping up their search in recent years for indicators which can provide warning signals of over-indebtedness situations or limit values for an economically sustainable debt burden. The discussion about debt sustainability plays a central role in particular in the context of the HIPC initiative. Here, though, the IMF and the World Bank are aiming primarily at retaining the debt servicing abilities of the debtors, a concept which has more to do with the interests of the creditors. The major indicators are the ratio of debts or debt servicing to export earnings. This concept is rightly criticised from various sides, because its one-dimensional nature is not appropriate to the complexity of debt situations, and it fails to take account of central economic development criteria, but more importantly, social and environmental development criteria. Cf. Philipp Hersel, Eine Bestandsaufnahme der Debatte um ‘Debt Sustainability’. Arbeitspapier zur Diskussion in der VENRO-AG ‘Internationale Finanzinstitutionen’ on 12.1.1999 on behalf of Kindernothilfe and Misereor. Bonn: VENRO. 30 Bundesverband deutscher Banken, Argumente zum Finanzmarkt. Schuldenerlass - Und dann? Berlin, September 1999, p. 12. 31 The current conditions of the German Development Ministry state: - LDCs get non-repayable grants; - countries falling under the IDA conditions of the World Bank get loans at a interest rate of 0.75% over 40 years’ duration and 10 years’ grace; - all other developing countries get loans at 2% interest over 30 years’ duration and 10 years’ grace.
15 Compared against the criteria listed above, foreign loans are precisely unsuited to the financing of those very ventures which are regarded as sensible from the development policy point of view, but which deliver neither sufficient yield nor enough foreign currency. This is particularly true in the field of basic social services (basic education, basic health care and nutrition, reproductive health, water supply and sanitary facilities) but also for environmental measures, capacity building, the construction of the infrastructure and support for forms of agricultural production, which are not angled towards exports. Foreign loans are equally ill-suited from the development policy point of view to financing the debt service for old loans or for stocking up currency reserves in order to hedge the State against speculative attacks on the financial markets. In its 1999 Trade and Development Report, UNCTAD noted that loan-financed currency reserves gave rise to interest costs which are higher than the possible yield from their investment, and increased reserve holdings in the 1990s may have cost the developing countries over 50 billion US dollars32.
So foreign loans, even when they are put in the form of official development assistance, represent a sensible instrument for development financing only under very special conditions. This is also the conclusion reached by the famous economic scientist Keith Griffin and his colleague Terry McKinley in a study for the UNDP in which they state:
‘Unless foreign borrowing enables countries to invest in projects with exceptionally high rates of return that otherwise would not be possible – and the evidence from the debt crisis contradicts this – long- term borrowing will likely result in transfer of resources from poor countries to rich and periodically cause major economic disruptions in the debtor countries’33.
The consequence, that of awarding official development assistance increasingly in the form of grants, is logical, but it should not be used as a pretext for further reducing the bilateral and multilateral transfers to the South and instead, having recourse to the responsibility of private donors. For it was precisely the short-term loans from foreign commercial banks and the growing indebtedness via foreign bonds in the second half of the 1990s that exacerbated the debt crises in Asia and Latin America because of stiffer loan conditions and the greater volatility of the resources.
In order to avoid such crisis situations in the future and to achieve a lasting solution to the debt crisis, the following demands should be supported:
· A quantitative extension of debt relief measures, going so far as a complete waiving of the debt for the HIPCs. For the other developing countries, this could mean, in accordance with the demands of the German Jubilee 2000 Campaign, the cancellation of all bilateral and multilateral debts which give rise to payment obligations which exceed 5% of export earnings (achieved on average in 1994-1996). · The consideration of additional social, economic and ecological indicators as criteria for debt sustainability. · The increased liability of private investors in the event of a financial crisis (‘bail in’) in order to avoid the socialisation of losses in the future. · The comprehensive transformation of loan-financed development co-operation towards grant financing, in order to prevent a fresh crisis of indebtedness after the debt reduction. · The development of an international insolvency law with which international debt management can be placed on a fresh and equal footing. · Institutional reforms in the international debt regime (the Paris Club, etc) in order to increase transparency for the public and to improve the participation of the debtor countries.
4. Private capital for development?
Private capital from the industrialised countries grew in the 1990s to become the most important component in net resource flows to the South. The relationship between official and private flows was virtually reversed between the beginning and end of the decade. In 1991, 61.2% of the financial transfers came from official sources, and 38.4% from private sources; by 1998, official resource flows
32 UNCTAD, Trade and Development Report, 1999, p. 111 (footnote 15). 33 Keith Griffin/Terry McKinley, loc. cit., p. 62.
16 accounted for only 36.9%, while private flows had risen to 61.5%34. Foreign direct investments became the new source of hope for development financing. In 1998 in the developing countries, they accounted for a total of 198 billion US dollars35, making them three times as important as official development aid from the OECD countries. Chart 2 shows the long-term development of the official and private capital flows to the South and illustrates considerable fluctuations in the private flows (which also include loans from private banks).
Chart 2: Total net long-term flows to developing countries, 1969 – 1998 as a percentage of DAC member’s combined GNP
Source: OECD/DAC
Even if private funds can make an important contribution to the financing of development, current expectations are excessive. For the flows of funding are very unevenly distributed in regional terms, the money is often not used for productive purposes or purposes which should encourage development, and many investments have negative side effects for economic development and the balance of payments:
· The gap between the most important target countries for private foreign capital and the countries which investments bypass is growing ever wider. In 1998, the five major recipient countries, headed by China and Brazil, received 55% of all foreign direct investments, whereas the 48 poorest countries (LDCs) did not even receive 1%36. · An increasing part of the direct investments is going into so-called offshore centres, in which neither international environmental and labour standards nor national environmental, social and tax laws apply. Between 1991 and 1998, some 100 billion US dollars’ worth of investment capital flowed into these zones, which produce primarily for export, 20.3 billion US dollars in 1998 alone37. · Foreign investment capital is not used simply for the setting up of new production facilities and
34 Cf. OECD, 1999 Development Co-operation Report, Table 1. 35 Cf. UNCTAD, press release TAD/INF/2837 (8 February 2000). 36 Cf. UNCTAD, World Investment Report 1999, Overview, p. 17. 37 cf. Table 1.
17 service businesses, but increasingly also for business mergers and acquisitions38. The world-wide merger frenzy is likely, in the year 2000, to reach a new high point. Alongside negative effects on employment, the consequences of this economic process of concentration are growing market power for transnational corporations (TNCs) and increasing influence by their world-wide headquarters in the North on the development of entire economies in the South. · Alongside foreign direct investments, portfolio investments have been growing considerably in importance for the developing countries over recent years. The volatility of these capital flows, however, has a negative impact on the stability of economic development and helped to precipitate the financial crises in Mexico and Asia. · The broadly positive effect of a capital injection from a foreign investor for the balance of payments of the recipient country is reduced by a series of opposing effects, and sometimes in fact becomes negative. So the direct or indirect back transfer of profits and capital has a negative effect on the balance of payments39. Similarly, the demand stimulated by the investment for imported products from foreign suppliers is a burden on the balance of payments. Where an investment in the host country is financed by a loan, the positive balance of payments effects never even appear.
In addition to these aspects, which dampen the hopes of pro-development effects by foreign private capital from the macroeconomic point of view, it is important to examine every investment project individually with regard to its social and environmental consequences.
In order to guarantee that the activities of transnational investors contribute to sustainable development in the future, it has long been suggested that a binding multilateral regulatory framework be developed under the aegis of the United Nations within which the responsibilities and duties of transnational corporations (TNCs) would be laid down. The important elements of such an ‘alternative MAI’ would include the following:
· Environmental and social standards set at a high level; · A globally applicable liability law; · Comprehensive publicity duties; · An international competition law that would prevent monopolistic market structures and cartel formation; · The setting up of an effective supervisory framework including a complaint procedure to which those affected by the activities of the corporations and the representatives of their interests would have direct access; · The introduction of an effective system of incentives and sanctions to guarantee compliance by corporations with the regulatory framework.
Although any questioning about the duties and responsibilities of transnational corporations had been taboo for many years, the issue was once again addressed at the end of the 1990s by various parties40. In most cases, the motive was not so much the control of the TNCs as the exploitation of their economic potential for the global dissemination of environmental, social and human rights standards. This initiative was also pursued by UN Secretary-General Kofi Annan with his proposal for a Global Compact on Human Rights, Labour and Environment, which he put forward at the World Economic Forum in Davos in January 1999. In it, he called upon the leaders of the corporations to work with the United Nations on initiating a process to promote a core set of human rights, labour and environmental standards in their corporations and sub-corporations41.
38 Of the 644 billion US dollars flowing in foreign direct investments world-wide in 1998, 411 billion US dollars was used for mergers and acquisitions. Cf. UNCTAD, World Investment Report 1999, Table I.2, p.9. 39 In the 1970s and 80s, direct profit transfers from South to North regularly exceeded the net inflow of investment capital to the South. It was only through the massive upturn in foreign direct investments that the ratio was reversed in the 1990s, although the return transfers of profits to the investors in the North also rose further during that period (cf. UNCTAD, Trade and Development Report 1999, p. 120 (Table 5.5)). 40 See, inter alia: UNCTAD, The Social Responsibility of Transnational Corporations. Geneva: UNCTAD, October 1999; Peter Utting, Business Responsibility for Sustainable Development. Geneva: UNRISD, January 2000 (UNRISD Occasional Paper 2). 41 United Nations Secretary General 1999: Address of Secretary-General Kofi Annan to the World Economic Forum in Davos, Switzerland, on 31 January 1999 (UN doc. SG/SM/6881 of 1 February 1999). Cf. also the specially set up UN home page on this subject: www.unglobalcompact.org
18 The Secretary-General won support at the UN level from the EU. In the context of the preparatory process for the ‘Copenhagen + 5’ Special Session of the UN General Assembly, the EU called among other points for the formulation of principles for the social responsibility of the private sector and the development of voluntary codes of conduct42. Pressure on the EU also came from the European Parliament. At the initiative of MEP Richard Howitt, the Parliament passed a resolution on 15 January 1999 which aimed among other points at the formulation of a code of conduct for European TNCs active in the developing countries43. In this, the Parliament repeats its call to the Commission and the Council ‘to lose no time in putting forward proposals for the creation of a suitable legal basis for the establishment of a multilateral framework to govern the activities of corporations world-wide, and to organise hearings between representatives of corporations, the social partners and circles affected by the code’44.
Finally, the OECD Guidelines on Multinational Enterprises are of particularly topical importance. This TNC code, the most comprehensive to date, which was issued by the OECD as long ago as 1976, is due to be completely revised by the OECD ministerial meeting in June 2000. However, given the experiences with the MAI negotiations in the OECD, the chances of being able to lay down effective social, ecological and development policy standards for TNC activities by means of this voluntary instrument are slim.
Multilateral rules for transnational investors can help to make sure that private capital does not have negative impacts on environment and development. It is more difficult to ensure that the capital flows into economic sectors, or regions of the world, where investments are risky or yield low returns. It would be deceptive to place such expectations upon private investors, who intend to maximise the return on their investments. So UNCTAD comes to the conclusion, in its assessment of the development effects of private capital flows, that ‘the private capital markets are of only limited value for the financing of development’45.
5. New global financial instruments
The growing discrepancy between the global financing requirement on the one hand, and falling ODA on the other, led in the 1990s to the search for alternative financing options. The basic idea behind many proposals which emerged from this process was that new global tasks, such as in the field of conflict resolution, environmental protection, the stabilisation of the finance markets and the fight against poverty, should be financed by new global resources. The central point of many proposals was the introduction of uniform international taxes. The following have been the main issues under discussion for years:
· a tax on international currency transfers (the so-called Tobin tax)46; · taxes and charges for the use of global public goods, such as an international sea transport tax for the use of the world’s seas and a kerosene tax in aviation; · an international CO2/energy tax.
All these proposals tend to focus not only on the money-raising function, but on the steering function. The Tobin tax is supposed to curb the volume of speculative currency transactions and thereby
42 First Substantive Session of the Preparatory Committee for the Special Session of the General Assembly on the Implementation of the Outcome of the World Summit for Social Development and Further Initiatives. Agenda item 4: Further Actions and Initiatives to Implement the Commitments made at the World Summit for Social Development. Suggestions for further actions and initiatives by the European Union. New York, 19 May 1999, paragraph 20. 43 European Parliament: Resolution on EU standards for European enterprises active in developing countries with regard to the development of a European code of conduct, 15 January 1999. The resolution draws on the modified Howitt report (doc. Nº A4-0508/98). 44 Ibid, point 11. 45 Source: UN Information Centre Bonn, Press release UNIC/200 of 20 September 1999, p. 5. 46 Current summaries of the discussions on a Tobin tax may be found inter alia in: Alex C. Michalos, A Handful of Sand in the Wheels of Financial Speculation. University of Northern British Columbia, March 2000 (mimeo) [[email protected]]; Anthony Clunies Ross, A Tax on Foreign-Exchange Transactions. Report of a Consultation held by CIDSE in collaboration with the University of Antwerp (UFSIA). Brussels: CIDSE, February 2000; Danny Cassimon, Taxing Excessive Currency Speculation to Prevent Social Crisis and Finance Global Challenges. A proposal for discussion. Brussels: CIDSE, January 1999.
19 increase stability on the finance markets; international transport taxes should mean that the ecological costs of shipping and aviation would be reflected in the prices, in order to reduce traffic and its environmentally damaging effects; an international energy tax should cut the use of fossil fuels and thus the emission of gases which adversely affect the climate.
The direct financial effects which would be achieved for national economies simply through the control effect would vary widely depending on the types of taxes. On the one hand, individual economic sectors would be subject to the taxes, such as the energy-intensive industries in the case of a CO2 tax, the export industry through international taxes making shipping and aircraft more expensive, or the financial industry, which would have to cope with lower arbitrage profits and charges levied from currency transactions. On the other hand, countries might save considerable resources, for example through a tax on currency transactions. The financial cost to exporting or importing businesses for currency hedging operations would fall. The central banks would need to hold fewer currency reserves to ward off speculative currency attacks. And just as importantly, the economic costs of a financial crash, which might be reinforced or even triggered by the present volatility of international capital flows, would be reduced or even disappear altogether.
The possible negative economic effects of international taxes could be overcompensated for the countries of the South by the additional tax revenues, if corresponding inter-State distribution mechanisms were established. Almost all the proposals first provide for the taxes to be levied at the national level and basically to remain within the discretion of the individual States. But even if only a small percentage of the tax revenue were set aside for global purposes, the resources for the financing of international environmental and development tasks could be considerably increased as a result47. If the resources were earmarked for specific purposes, they might also further reinforce the steering function of the taxes, for example if the revenue raised by a Tobin tax were used for the supervision and setting up of a workable finance system.
The scale of the potential revenue from international taxes is hard to estimate, for if the control objectives of the various taxes are successful, then the taxes gradually escape from their own basis48. The greatest financing potential probably lies in the tax on currency transactions, which is particularly interesting from the development policy angle. Rough estimates assume that even with an extremely low rate of tax (estimates based on rates of between 0.01 and 0.25%), it would be possible to achieve revenue world-wide of between 50 and 450 billion US dollars per year49.
The fact that such taxes have not yet been levied is due less to issues of technical feasibility than to the political practicability of the various proposals. The USA, in particular, has vehemently attacked any form of internationally agreed taxation, and in recent years even succeeded in blocking discussion about it at the UN level. Groups and NGOs in many countries have recognised this key obstacle and are trying, via campaigns, to increase the political acceptance of international taxes. In this connection, particularly important initiatives are the Europe-wide campaign by environmental organisations for the introduction of a kerosene tax in aviation50 and the growing international campaign for a currency transaction tax (CTT), which at the European level has its most ardent supporter in the French ATTAC movement51 and in the meantime is being backed by similar networks in many countries. Canada, the USA, the UK and Belgium also have Tobin tax initiatives, and in Germany, a corresponding network has been founded at the initiative of Kairos Europa, Pax Christi and WEED.
47 On the other hand, if the proceeds from international taxes were to remain entirely in the countries in which they were collected, many countries of the South would often get nearly nothing. If a Tobin tax were brought in, it would yield an estimated 30% of revenue in Great Britain, 15% in the USA and 10% in Japan. The developing countries (excluding Singapore, Hong Kong, Bahrain and South Africa) would get only 1.1% of the revenues (cf. Inge Kaul/John Langmore, Potential Uses of the Revenue from a Tobin Tax, in: Mahbub ul Haq/Inge Kaul/Isabelle Grunberg (Publ.): The Tobin Tax. Coping with Financial Volatility. Oxford/New York 1996, p. 258. 48 The extent to which the respective basis for assessment is reduced, or the volume of exchange rate transactions after the introduction of the Tobin tax, depends upon how ‘elastically’ the relevant economic players react to the introduction of the taxes. 49 Cf., for example, Inge Kaul/John Langmore, loc. cit., p. 258; Margareta E. Kulessa, Die Tobinsteuer zwischen Lenkungs- und Finanzierungsfunktion. In: Wirtschaftsdienst II, 1996; Danny Cassimon, Taxing Excessive Currency Speculation to Prevent Social Crisis and Finance Global Challenges. Antwerp 1999, p. 19 (CIDSE Background Paper, mimeo). 50 The Right Price for Air Travel Campaign, cf. www.milieudefensie.nl/airtravel/ 51 See: www.attac.org
20 At the political level, too, there are signs of a change of heart in certain countries with regard to a tax on speculative currency transactions. The Canadian parliament came out in favour of such a tax in 1999, as well as the Finnish government. In the European Parliament, a special debate was held on this topic in January 200052, and the French and Belgian parliaments as well as the British House of Commons are now addressing this issue. In order to encourage the debate at the intergovernmental level, the NGOs are suggesting that as the first step, a feasibility study on a CTT be commissioned at the UN level. A similar proposal has also been tabled by the Canadian government in the preparatory process for the ‘Copenhagen + 5’ Special Session of the UN General Assembly (Geneva, June 2000).
6. Reform of the international finance system
In the debate about the future of financing for development, the issue is not just how the necessary resources can be mobilised. The central question in recent times has also been in which international institutions the future decisions should be made about the appropriate financing instruments, the quantity and quality of the financial flows and the shape of the political framework conditions. On the one hand, we already have a tightly woven network of international bodies and organisations handling financing and development questions, and on the other, at the latest since the financial crises of recent years, the lack of effective and transparent guidance, control and decision-making bodies in the international finance system has been criticised. Politicians, scientists and international commissions have, since then, been exploring aspects of a new international financial architecture from the most varied points of view53.In this document, we can do no more than pick up a few points from this debate. Also, it is in no way new. For years, governments from the South, civil society organisations and scientists have been calling, with different priorities, for the ‘democratisation’ of the Bretton Woods institutions (BWI) and the reform of the economic and social bodies of the UN, as well as the creation of new institutions, from an Economic Security Council to a World Central Bank54. The drawing up of ever newer ‘governance structures’ for the international economic and finance system has so far proved to be largely fruitless, owing to a large extent to the fact that it has mostly not taken into account the intra- and inter-national interest and power structures.
However, a new element in the current discussion is that the critics of the present financial system, with the IMF and the World Bank as its mainstays, are being joined by more and more protagonists of this very system. The spectrum ranges from the G-7 governments to the US Congress to Harvard economist Jeffrey Sachs and George Soros, who became a billionaire through his stock-market speculations. The proposals for reform from these quarters focus mainly on the stabilisation of the existing financial system, even if some calls for institutional rearrangement would have serious consequences above all for the IMF and the World Bank.
In this connection, particular attention has been focused on the report by the US Meltzer Commission, presented to the public in March 200055. This commission, with the official title of ‘International Financial Institution Advisory Commission (IFIAC)’, was set up by the US Congress in November 1998 under the chairmanship of the economics professor Allan Meltzer to draft proposals for the future role of the international financial institutions. The central demands of the report are:
52The European Parliament had already called upon the European Commission in April 1996 to examine the possible introduction of a Tobin tax. Cf. European Parliament, Resolution on the reinforcement of world-wide currency policy co-operation for improved regulation of the currency and finance markets (A4-0053/96), Point 21. 53 Cf. inter alia: UN Executive Committee on Economic and Social Affairs, Towards a new international financial architecture. New York, 21 January 1999 (http://www.un.org/esa/coordination/ifa.htm); South Centre, Financing Development. Issues for a South Agenda, Part V: Towards a Development-Supportive International Financial System. Geneva: South Centre, April 1999; Stephany Griffith-Jones, A New Financial Architecture for Reducing Risks and Severity of Crisis. Sussex: IDS, March 1999; Stephany Griffith-Jones, Towards a Better Financial Architecture. Sussex: IDS, June 1999; Nancy Alexander, Finance for Development. A Dialogue with the Bretton Woods Institutions, New York: Friedrich-Ebert-Stiftung, 1999; plus the reports mentioned below, from the Financial Stability Forum and the Meltzer Commission. 54 Regarding the decades-old, often fruitless discussion on reform, cf.: Klaus Hüfner/Jens Martens, UNO-Reform zwischen Utopie und Realität. Vorschläge zum Wirtschafts- und Sozialbereich der Vereinten Nationen. Frankfurt: Peter Lang, 2000 (Reihe Internationale Beziehungen Bd. 6). 55 The report plus a range of other papers and positions, as well as information on the activities of the Meltzer Commission may be found on the Internet at: http://phantom-x.gsia.cmu.edu/IFIAC/
21 · The lending operations of the IMF should be limited to the provision of liquidity (that is, short-term funds) to solvent member governments when financial markets close. Liquidity loans would have short maturity and be made at a penalty rate (above the borrower’s recent market rate). The IMF’s Poverty Reduction and Growth Facility (PRGF)56 should be wound up. · Countries with an annual per capita income of over 4000 US dollars should stop receiving any official development resources within five years, and cover their capital requirements exclusively on the international financial markets. In the case of countries with a per capita income of over 2500 US dollars, official development assistance should be restricted. · The World Bank should be transformed into a World Development Agency and instead of loans, should issue only performance-related grants to the poorest countries in Africa, the Near East and Europe. Its tasks in Latin America and Asia should be taken over by the respective regional development banks, which should be reformed in the same way. · Grants for poverty reduction and basic social services in the 80 to 90 poorest countries should be significantly increased if the countries demonstrate that the funding is being used for effective programmes of economic development (whatever that may mean). The US government should make corresponding significant increases in its development budget. · The 41 HIPCs should be given 100 per cent debt relief, provided that they are pursuing ‘effective strategies for economic development’.
Although the demands for complete debt relief for the HIPCs and the withdrawal of the IMF from long- term development finance were welcomed by the NGOs, the report overall was sharply criticised by governments, NGOs and the organisations concerned themselves. German Development Minister Wieczorek-Zeul warned: ‘The ideas from the US Congress call into question (...) the reorientation of the programmes to combat poverty decided upon at the last annual assembly of the World Bank and IMF’57. WEED commented, in its statement on the Meltzer report: ‘With its outspoken market-radical tenor, the commission ultimately backs up a further erosion of official development financing’58. And three members of the commission itself, including the famous head of the Washington Institute for International Economics, Fred Bergsten, called some central demands in the report ‘fundamentally flawed and/or unsubstantiated’, and issued their own counter-report against it59.
So far, there has been less fuss about the reports by the Financial Stability Forum (FSF), which were likewise published in March 200060. The Forum was founded by the G-7 in February 1999, to work out some proposals for the stabilisation of the financial markets and the prevention of financial crises. It is headed by the Director General of the Bank for International Settlements (BIS), Andrew Crockett61. The reports by the Forum contain recommendations on three particularly risky areas of the financial system: offshore centres, (short-term) capital flows, and highly leveraged institutions, such as hedge funds. The Forum’s recommendations mainly confined themselves to alleviating the present risks of the international financial system through technical measures, especially at the national level. Proposals included improved risk management in the official sector and the private financial institutions, greater transparency and improved statistics, extended publicity duties for all financial institutions, including hedge funds, and the application of core standards for a stable financial system. All in all, the FSF is obviously not concerned with reducing the risks of the current financial system through regulatory measures. The existing risks should simply be brought under control by improved management. So there is no effort to find new traffic rules or even speed limits for international
56 The Enhanced Structural Adjustment Facility of the IMF was renamed the PRGF following the decisions at the IMF/World Bank annual meeting in 1999. 57 Cf. epd-Entwicklungspolitik 6/2000, p. 4. 58 Ibid., p. 2. 59 The counter-report can be found on the Internet at: http://www.iie.com/testimony/reform.htm 60 Cf. Financial Stability Forum, Press release: Financial Stability Forum endorses policy actions aimed at reducing global financial vulnerabilities. Basel, 26 March 2000. This press release contains the summaries of the reports of the three working groups of the Forum. The full reports from the Forum and further information can be obtained via the Forum’s Website http://www.fsforum.org 61 The members of the FSF are representatives of the Finance Ministries, Central Banks and banking supervisory bodies of the G-7 States as well as representatives of international finance institutions and control bodies. The Central Banks of Australia, Hong Kong, Singapore and the Netherlands are also involved.
22 capital flows, but at most, brighter street lights to improve visibility, and reinforced guard-rails to keep a crash under control.62
In order to overcome the deficiencies in the international financial system and the structural causes of the recent crises, there is a pressing need for greater transparency in financial transactions and better bank supervision at the national level, although these are in no way the only conditions requiring to be met. Other important elements in the reform discussion would be the following:
· stronger democratic control of the international financial institutions and their consistent transparency vis-à-vis civil society organisations; · equal representation of all States in the decision-making bodies of the international financial institutions; · the transfer of economic and finance-policy decision-making powers away from closed clubs with a limited membership (G-7, Paris Club) towards bodies empowered for the purpose under the Charter of the United Nations, with universal membership and egalitarian codetermination processes; · and equally importantly, the final rejection by the international economic and financial institutions of the neoliberal model of the ‘Washington consensus’ and the consistent angling of their policy towards the primacy of sustainable, i.e. environmentally sound and socially just development.
These demands need to be consistently highlighted in the course of the preparatory process for the UN conference on financing for development, even if their chances of political viability are doubtless very slim at present. Events in Seattle have shown, however, that thanks to public pressure, there is a growing readiness among governments to accept policy changes. The great failing of the EU policy in this field is that so far, they have not formulated any comprehensive proposals for institutional reforms in the international system for the financing of development. The German development minister, Ms Wieczorek-Zeul, did, however, voice some relatively wide-ranging thoughts on the matter in a speech in February 2000:
‘I think that in the long term, it must be a matter of gathering the range of organisations under one consistent umbrella. This could be formed jointly by the World Bank and the UNDP [...] The existing global institutions, in particular the IMF and the World Trade Organisation, but also the many Specialised Organisations in this field, need to be better coordinated together, and might in fact in the long term even be combined. The decision-making powers should not be directed solely towards the economic power of the individual Member States. The interests of the economically weak must also be properly represented’63.
Starting from this line of thinking, the governments should use the Financing for Development process as a basis upon which to formulate proposals for the political reshaping of the international system of development finance.
62 Cf. Peter Wahl/Peter Waldow, Useful Diagnosis - Wrong Therapy. WEED Statement on the report of the Financial Stability Forum. Bonn, April 10, 2000. The statement can be found on the WEED homepage (http://www.weedbonn.org). 63 Heidemarie Wieczorek-Zeul, loc. cit., p. 6.
23 Part III
Towards the UN Conference on Financing for Development
The first preparatory phase
The initiative for an international conference on financing for development originated as long ago as the beginning of the 1990s from the Group of 77 (G-77). As an extension to the sectoral world conferences of this decade, measures should be decided upon in an autonomous conference in order to overcome the chronic shortage of resources in the developing countries. After the USA and the EU had uncompromisingly rejected this plan for years, they were eventually prepared in 1997, with some provisos, to set a process in motion which should lead, by the year 2001, to a ‘high-level intergovernmental forum on financing for development’64.
In order to identify the themes which should be addressed in the framework of the planned conference, the UN Secretariat opened a consultation process at the beginning of 1998, which in addition to governments and international organisations also included NGOs, the private sector and scientists. The General Assembly then set up an Ad Hoc Working Group at the end of 1998, which used the results of these consultations as a basis for the framing of concrete proposals for the themes and format of the conference65. Through these activities, the process gained its own dynamic.
The report by the Working Group proposed the following five key areas for the conference agenda:
· the mobilisation of domestic resources; · international resources: trade, foreign investment and other private capital flows; · international development co-operation, including ODA and debt relief; · increased coherence and consistency in the international monetary, finance and trade system to support development and avoid financial crises and excessive volatility in finance flows; · particular needs of certain groups of countries, including Africa and the poorest countries (LDCs).
In the Working Group’s negotiations, the EU urged that the conference should focus on discussing how the missing resources for the implementation of the decisions from the world conferences could be mobilised. On the other hand, along with the USA, it blocked any explicit reference to ‘innovative sources of financing’ (Tobin tax) and ‘governance’ of the international finance system as themes for the conference. This does not mean, however, that these themes have been definitively swept off the table in the process.
There was agreement among the governments to the effect that the conference should take place at least at Ministerial level, with the G-77 advocating a summit meeting of Heads of State and of Government. The preparatory process should involve not only the Ministries of Development and Foreign Affairs, but also the Ministries of Finance and the Economy. Alongside the UN organisations, the World Bank, the IMF and the WTO are also actively involved in the preparations. Finally, the governments emphasised the important role that should be played in the process by the NGOs and the private sector. Even at the preparatory stage, representatives of major banks and transnational corporations were also involved as well as NGOs.
The official process
The UN General Assembly debated the Ad Hoc Working Group’s report at its 54th Session in the autumn of 1999, and finally decided to stage a high-level intergovernmental ‘event’ on financing for development in the year 200166. As is customary with the UN’s international conferences, a preparatory committee or PrepCom was set up, with representation from all the UN Member States. It held its first organisational meetings in February and March 2000. The first substantive PrepCom (PrepCom 1) is to be held in New York on 30 May – 2 June and 12 – 16 June 2000. PrepComs 2 and 3 are scheduled to be held in the first and second quarters of 2001.
64 Cf. Resolution by the General Assembly A/RES/52/179 of 18 December 1997. 65 Cf. Report of the Ad Hoc Open-ended Working Group of the General Assembly on Financing for Development (UN doc. A/54/28 of 10 August 1999). 66 Cf. Resolution by the General Assembly A/RES/54/196 of 22 December 1999.
24 The political value of the whole process will also depend upon the extent to which the ‘hard’ economic and financial organisations – World Bank, IMF and WTO – are integrated into the process67. The World Bank has signalled its interest in being closely involved, and proposed co-operation on three levels: 1) official meetings between the Bank’s Executive Board and the Bureau of the PrepCom; 2) informal consultations between individual members and groups of Executive Board and PrepCom, and 3) the setting up of a team of World Bank staff for the purposes of the substantive monitoring of the process and direct collaboration by World Bank officials in the UN’s Financing for Development Secretariat. The IMF and the WTO initially reacted cautiously to the initiative of the UN, thereby implicitly indicating that they do not consider the UN to be the right forum for negotiations about international financial issues.
The NGOs, like the private-sector institutions, have been given wide-ranging possibilities for participation. Even organisations which have not yet enjoyed consultative status with the UN are allowed to seek accreditation for the FfD process by 1 January 2001. This also applies in the same way to business sector entities. It is not clear whether in this way the UN is for the first time also allowing individual corporations to take part formally in an intergovernmental conference. As well as participating in the official preparatory meetings, the private sector and NGOs will be more closely drawn into the process by means of additional activities, including two hearings to be staged by the UN in New York in the fourth quarter of 2000, and a series of regional hearings to be carried out by the regional economic commission of the UN in conjunction with UNCTAD.
In parallel to the FfD process, the theme of financing for development will also play a key role in 2000 in other fora. At the Special Session of the UN General Assembly ‘Copenhagen + 5’, to be held in June 2000 in Geneva, the financing of social development is on the agenda. The themes for this include traditional development assistance as well as such things as structural adjustment policy and further debt relief measures. In the Commission for Sustainable Development (CSD), which is responsible for the Rio follow-up process, the focus in the year 2000 is on trade and investments, as well as financing issues in the context of Agenda 21. The Third United Nations Conference on the Least Developed Countries will also look at questions of trade, financing for development, and social services. If efforts at tying these various processes together are successful, the involvement of further social groups from the social and environmental sector will provide added dynamism for the international financial debate.
Against this background, the Financing for Development process can certainly develop a mobilising effect. Experience from the MAI campaign, the French ATTAC movement for a Tobin tax, the protests on the fringes of the WTO Ministers’ meeting in Seattle, and also the extensive world-wide resonance of the Jubilee 2000 Campaign, shows that in many countries the social potential is in place to increase pressure on governments for reform specifically in the case of the ‘hard’ international financial questions. The UN conference on financing for development could evolve into a new common strategic field of action for all these movements.
67 Regarding the modalities described below for the involvement of all relevant stakeholders in the FfD process, cf. UN doc. A/AC.257/6 of 23 March 2000.
25 Part IV
Information
Official sources of information
UN The preparatory process for the UN conference on financing for development can be tracked via the United Nations Website. The Financing for Development page includes information on the most recent developments in the negotiations, the positions of governments, NGOs and economic representatives, as well as reports and materials from the UN Secretariat. http://www.un.org/esa/analysis/ffd
UNCTAD The UNCTAD Website gives pointers on conferences and papers dealing with the theme of development financing. The search engine on the UNCTAD X page lists several papers and positions by UNCTAD X on the subject. http://www.unctad.org/en/enhome.htm
UNDP In its publications, the Office of Development Studies of the UNDP deals from various perspectives with questions of development financing and the future of the financial markets. Its Website gives information on publications and events in this connection. http://www.undp.org/ods/index2.html
World Bank The positions of the World Bank Group as well as a lot of working papers on aspects of development financing can be found on the Net at: http://www.worldbank.org/
IMF Information on the activities of the IMF can be found at: http://www.imf.org/
BIS The Bank for International Settlements has placed information on the Net at the following address: http://www.bis.org
South Centre The South Centre, an intergovernmental ‘think tank’ of the developing countries with its headquarters in Geneva, has placed a stack of interesting papers and studies on trade and financing questions on the Net, some of which can be downloaded as pdf files. http://www.southcentre.org/publications/index.htm
OECD The OECD plans a series of publications and events, of which the results should be brought into the FfD conference. One focal point is ‘The Development Finance Agenda: mobilising resources for private sector-led growth’. Information on the development-related activities of the OECD can be found on the Internet at: http://www.oecd.org/dac/
Campaigns and initiatives
Debt campaigns Information on international and national networks of NGOs working in the international debt campaign can be found on the Jubilee 2000 page: http://www.jubilee2000.de
26 Finance market campaigns Information from the ATTAC movements in France and a growing number of other countries can be found on the Net at: http://www.attac.org/indexen.htm
Through the collaboration of Kairos Europa, pax christi, share e.V. and WEED (Fehler! Verweisquelle konnte nicht gefunden werden.), a German network for the democratic control of the finance markets is being set up at the moment. You can find the Website at: http://www.share-online.de/Finanzmaerkte/
NGO resources The Third World Network, a grouping of Southern NGOs and individuals, looks at development policy issues from the point of view of the South. Its Website contains a wealth of materials and positions on a broad sweep of economic, commercial, financial and environmental themes. In addition, the list of the network’s publications can be accessed here. http://www.twnside.org.sg/
The Global Policy Forum in New York offers masses of articles, position papers and background information and more on development policy-related issues. The main thrusts of its work include the financing of the UN as well as global taxes. This is a real Aladdin’s Cave! http://www.globalpolicy.org/
Research institutes The International Institute for Sustainable Development in Canada runs a mailing list on financing for development. It disseminates the latest developments, discussion contributions and position papers, mainly from the NGO scene. To get on the mailing list, simply e-mail with the content/regarding join FFD_L [+] your name to the following address: [email protected] http://iisd.ca
The Institute of Development Studies at the University of Sussex (IDS) has set up an IDS Globalisation Team, which concentrates among other points on questions of the international finance system. Its home page lists a series of research papers, which can be directly downloaded in pdf format. It includes several discussion papers by Stephany Griffith-Jones. Fehler! Verweisquelle konnte nicht gefunden werden.
Literature
Nancy Alexander, Finance for Development. A Dialogue with the Bretton Woods Institutions, New York: Friedrich-Ebert-Stiftung, 1999. Bundesverband deutscher Banken, Argumente zum Finanzmarkt. Schuldenerlass – Und dann? Berlin, September 1999. Danny Cassimon, Taxing Excessive Currency Speculation to Prevent Social Crisis and Finance Global Challenges. A proposal for discussion. Brussels: CIDSE, January 1999. Anthony Clunies Ross, A Tax on Foreign-Exchange Transactions. Report of a Consultation held by CIDSE in collaboration with the University of Antwerp (UFSIA). Brussels: CIDSE, February 2000. Thomas Fues, Die Bedeutung der Armutsbekämpfung im BMZ-Haushalt (13. September 1999), Bonn: Deutsches NRO-Forum Weltsozialgipfel/Arbeitsgruppe 20:20, 1999. Keith Griffin/Terry McKinley: New Approaches to Development Co-operation. New York: UNDP 1996 (ODS Discussion Paper Series No. 7). Stephany Griffith-Jones, A New Financial Architecture for Reducing Risks and Severity of Crisis. Sussex: IDS, March 1999. Stephany Griffith-Jones, Towards a Better Financial Architecture. Sussex: IDS, June 1999. Philipp Hersel, Eine Bestandsaufnahme der Debatte um ‘Debt Sustainability’. Arbeitspapier zur Diskussion in der VENRO-AG ‘Internationale Finanzinstitutionen’, 12.1.1999 on behalf of Kindernothilfe and Misereor. Bonn: VENRO.
27 Klaus Hüfner/Jens Martens, UNO-Reform zwischen Utopie und Realität. Vorschläge zum Wirtschafts- und Sozialbereich der Vereinten Nationen. Frankfurt: Peter Lang, 2000 (Reihe Internationale Beziehungen Bd. 6). Joshua Karliner, A Perilous Partnership. The United Nations Development Programme’s Flirtation with Corporate Collaboration. San Francisco: The Transnational Resource & Action Center, 1999. Inge Kaul, Towards a Paradigm of Embedded Financial Liberalization. Interlocking the Wheels of Private and Public Finance. Bonn: SEF December 1999 (SEF Policy Paper 13). Inge Kaul/Isabelle Grunberg/Marc A. Stern, Global Public Goods. International Co-operation in the 21st Century. Oxford/New York 1999. Inge Kaul /John Langmore, Potential Uses of the Revenue from a Tobin Tax. In: Mahbub ul Haq/Inge Kaul/Isabelle Grunberg (Publ.) Margareta E. Kulessa, Die Tobinsteuer zwischen Lenkungs- und Finanzierungsfunktion. In: Wirtschaftsdienst II, 1996. Alex C. Michalos, A Handful of Sand in the Wheels of Financial Speculation. University of Northern British Columbia, March 2000 (mimeo) [[email protected]] OECD Shaping the 21st Century: The Contribution of Development Co-operation. Paris, May 1996. OECD/DAC, 1999 Development Co-operation Report. Paris, 2000. Roger Riddell, Aid in the 21st Century. New York: UNDP 1996 (ODS Discussion Paper Series No. 6) South Centre, Financing Development. Issues for a South Agenda. Geneva, 1999. Mahbub ul Haq/Inge Kaul/Isabelle Grunberg (Publ.): The Tobin Tax. Coping with Financial Volatility. Oxford/New York 1996. UN Executive Committee on Economic and Social Affairs, Towards a new international financial architecture. New York, 21 January 1999 (http://www.un.org/esa/coordination/ifa.htm) UNCTAD, The Social Responsibility of Transnational Corporations. Geneva: UNCTAD, October 1999. UNCTAD, Trade and Development Report, 1999. UNCTAD, World Investment Report 1999. UNDP, Human Development Report 1999. Barbara Unmüßig/Miriam Walther, Armutsbekämpfung mit dem IWF? Eine kritische Einschätzung der Kölner Schuldeninitiative. Bonn: WEED, February 2000. Peter Utting, Business Responsibility for Sustainable Development. Geneva: UNRISD, January 2000 (UNRISD Occasional Paper 2). WEED, Schuldenreport 2000. Bonn, (anticipated) May 2000. Heidemarie Wieczorek-Zeul, Die globale Herausforderung beantworten: Von Entwicklungshilfe zur globalen Strukturpolitik – Rede anlässlich der internationalen Konferenz der Bundeskanzler-Willy- Brandt-Stiftung und der Stiftung Entwicklung und Frieden ‘Gerechtigkeit wagen: ein unerfülltes Versprechen! – Anforderungen an einen Brandt-Report für das 21. Jahrhundert’, 12 February 2000 in Bonn. World Bank, Global Development Finance 2000. Washington, D.C., April 2000.
Information on the author Jens Martens is a member of the Executive Board of World Economy, Ecology & Development Association (WEED), where he coordinates the programme field UN/EU-North-South Policy. He is author of various publications on international environment and development policy and UN reform. e-mail: [email protected]
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