| Introduction: Carolyn Reynolds of the World Bank's EXT Civil Society Team began the video conference by welcoming participants at each of the regional locations and stating that the purpose of the video conference was to discuss the Bank's FfD involvement in FfD and preparations leading up to the Monterrey Conference. After explaining the methodology which would be used, she then asked each location's CSO chairperson to briefly introduce themselves and the participating organizations. After each regional chairperson spoke and introduced the CSO participants at each site, she then introduced Enrique Rueda-Sabater and Jaime Biderman of the Bank's Financing for Development Group. Enrique Rueda-Sabater spoke on how the Bank sees the FfD process and why it has been a worthwhile endeavor over the past two years. He began by emphasizing that FfD is primarily about assuring the means to reach the Millennium Development Goals (MDGs). Since everyone agrees on the Goals (and particularly about the "synthesis" goal of poverty reduction), the contribution of the FfD process is to offer a comprehensive way to think about the means. The Conference in Monterrey also offers a great opportunity to create momentum on the key areas in which action is required to ensure that the means are compatible with the goals. Presently, the level of resources is too low. He outlined three key elements of the required means: i) country policies; ii) opportunities, particularly through open markets for developing country exports; and iii) resources—particularly overseas development assistance (ODA). He noted that sound domestic policies consistent with the poverty reduction goal are pre-requisites to all else, while open markets are crucial because they create opportunities for growth, as well as provide motivation for private sector activity, and ODA flows are still critical for poor countries. Overall, these means are now incompatible with the Millennium Development Goals (MDG), and therefore action is required on all fronts if these development goals are to be achieved. Jaime Biderman elaborated on the issue of country policies. He said there was an implicit "compact" in the Monterrey Consensus. He emphasized the importance of good macro economic and sectoral policies in such areas as education, health, and transportation as a pre-requisite for an increase in resource allocation from the developed countries. He pointed out that without sound sectoral policies, as well as macro policies in developing countries, the developed countries will not feel compelled to increase the levels of ODA. 1st Round of Questions Addis Ababa
A representative of Save the Children remarked on the draft FfD outcome document and how its language is vague in terms of the importance of CSO participation, and that in general, the document lacks firm commitments. He asked what the Bank will do to push for more specific commitments? Rome
On behalf of the of the four CSOs, Mr. Sergio Marelli of the Federation of Christian Organizations, asked a joint question regarding Enrique's statement on the three key elements of the required means: policies, open markets, and resources. Mr. Marelli observed that there could be two possible solutions to the problem: more ODA, or firmer commitments by governments. Which way will the Bank proceed? Bogotá
Marta Segura of the Colombian Confederation of NGOs commented on the prevalence of corruption throughout the development aid system and stated that this issue is crucial and should be addressed at the Conference. Brussels
Mr. Bogdan Vandenberghe of Broederlijk Delen addressed the issue of international tax cooperation and to the Currency Transaction Tax (Tobin tax). NGOs regretted that the initial proposal in the draft document on an International Organisation on Tax Cooperation appears to be "watered down" and unable to properly address and eventually strengthen the tax system. He went on to ask what the implementation process will be post-Monterrey. Washington
Mr. Aldo Caliari of the Center of Concern questioned the US government's proposal to move 50 percent of IDA allocations to grants, and how the Bank views this idea. He also asked about the process of follow-up on Monterrey, and how the Bank's Development Committee will take up the issue. Enrique Rueda-Sabater first chose to address the Bogotá comment on corruption. He agreed that corruption and the lack of transparency are critical issues to be addressed and that they had featured prominently in the FfD discussions, but he noted that unfortunately there is no easy solution and we should continue to seek ways of improving governance. He believes this is an area where CSOs are in a position to play a vital role. CSOs can continue to push for transparency at all levels and the Bank is open to receiving suggestions from them on how to assist in the fight against corruption and to learn from their experience. He expects this topic to be spotlighted in Monterrey. His second response was to the Washington question on IDA and grants. He said that this is an issue to be decided by donor governments. Although it is key to ensure that all financial flows to poor countries increase and have appropriate concessionality, he does not believe that this necessarily implies that IDA should switch to grants. With regard to the statement from Addis Ababa about an apparent lack of commitment due to the vague-wording of the draft FfD document, he explained his view that the "Monterrey Consensus" document represented a very useful, comprehensive platform on which to build specific actions to meet the Millennium Goals. These actions need not be the subject of an agreement in Monterrey but the Conference will provide a key impetus for them to be taken up in appropriate institutions and fora. With regard to the questions posed in Rome and Brussels, he stated that Monterrey is not expected to be a fundraising meeting per se and we should not expect a new agreement on ODA contributions; however, it can be seen as a first step in a process of raising ODA levels over time. FfD also offers a strong link between ODA and the Millennium Development Goals and we expect the Monterrey conference to step up the campaign on resources to meet the Goals. As for a currency transaction tax, he said that a pragmatic approach was needed. The wording in the Monterrey document reflects the fact that there is no consensus among governments on the issue of a Tobin tax. Focus on this issue could be a dangerous distraction from more achievable goals, such as an increase in ODA. Jaime Biderman added to the Addis Ababa comment that principles and commitments are an important step. However, the question now is how to implement the goals agreed upon in the document. The agreement on the document is a milestone in the campaign to implement the means to reach the NGOs. He went on to say that the Bank is already engaged in the areas within the Monterrey Consensus, but now everyone, including the Bank, needs to scale up their assistance and redouble their efforts towards poverty reduction. Monterrey is a platform to begin to discuss implementation of reaching the Goals. Carolyn Reynolds suggested that all participants review the March 6 speech called "Partnership for Development and Peace" made by World Bank President, James Wolfensohn, which clearly illustrates that the Bank is engaged in the beginning of a campaign to win more funding for development. In this speech, he reiterated his previous call for a doubling in development aid over the next five years. She said that the Bank will continue this advocacy after Monterrey. Enrique Rueda-Sabater said that the Bank's Development Committee will take up the substance of the issues laid out in the Monterrey Consensus document. In particular, the Development Committee will examine the Development Effectiveness Report soon to be issued by the Bank (now available on the Bank's external website) which makes the case that development aid does work, we have learned a lot about where it works best, and where the problems lie. He went on to say that "We" refers to the international community at large, not only the Bank.
2nd Round of Questions Addis Ababa
Mr. Fikre Zewde of Action Aid addressed the issue of the incompatibility of committed resources and the ambition of the MDGs. He posited that if there were a genuine commitment by the donor countries, sufficient resources would be available. He spoke of the amount of money the US is now committing to the war on terrorism, while 1 billion people still live in poverty throughout the world. He also questioned the need for appropriate country policies as a pre-requisite to an increase in the allocation of resources. He feels that the donor countries must be more realistic in their demands and also must consider what the recipient countries want. He asked how they can be assured that the aid will be effective. He then called on Washington to make a strong commitment. Rome
Mr. Paolo Dieci of CISP commented that since the report establishes a link between ODA and economic growth, how will this issue be addressed in Monterrey? Bogotá
Mr. Bernardo Toro of Fundación Social observed that no part of the FfD draft explicitly designates a place for CSOs in FfD's future. This is despite the fact that the Bank recognizes the important work CSOs do in terms of transforming macro level initiatives into micro level actions. Brussels
Mr. Françis Lemoine of Eurodad observed that both the Bank and the International Monetary Fund have been silent on the debt issue with respect to the FfD process. He then asked if this silence means that they consider the Heavily Indebted Poor Countries Initiative (HIPC) and the Paris Club negotiating setting to be sufficient frameworks to deal with the debt overhang. He also asked for their comments on the idea presented in the Monterrey consensus paper that debt sustainability assessments should also take into account the financing needs to reach the MDGs Washington
Ms. Emira Woods of InterAction asked what the level of CSO participation would be at the Development Committee at the Spring Meetings. She also requested that the issues of untying aid and donor coordination be addressed. Jaime Biderman initially addressed the question from Bogotá. He echoed that the Bank does recognize the importance of CSOs in the development process, but he added, it must be understood that the Bank's relationship is primarily with the relevant country governments. The Bank does work with CSOs at the international, country and project levels, and at all levels there is considered to be significant potential for pro-development alliances. He then addressed the question from Addis Ababa: Who determines what policies are appropriate? He responded that the Bank is a knowledge broker, while the governments are responsible for implementing the appropriate policies themselves. The Bank's comparative advantage is in knowledge and experience and we share with governments our assessments of what works and what doesn't through policy dialogue. Policy conditionality without government ownership is not likely to succeed, but it is important to focus on sound policies and related reforms because in the absence of these, our research and experience shows that many development projects fail. Enrique Rueda-Sabater responded to the Bogotá question by saying that it provided a lot of food for thought and that there probably was a lot of potential for local CSOs and their umbrella organizations to be involved more by donor agencies and international institutions. He agreed that CSOs are not utilized enough and that we must find the right way to utilize their expertise. With regard to the question from Addis Ababa, he agreed that while the reference to transaction costs of aid is somewhat abstract, and reflects the fact that this language had to be agreed on by many governments, nevertheless the language does reflect recognition of the issue that aid could be much more effective if its delivery were subject to less rigidities. He suggested that this is one example of where the Monterrey document can provide a basis for specific action. One useful approach in this regard would be for every recipient country to document the transactions costs (including "tied" procurement) of the aid they receive. In reference to comments from Rome, he suggested that the PRSP process can be very effective in this regard. It is important to be country specific, and to focus on the bottlenecks to making progress in key social services and, more generally, to growth and poverty reduction. He believes it is these bottlenecks where resources need to be directed. Speaking on the HIPC Initiative, he said that while it is a very important initiative for the countries affected by unsustainable debt, debt relief is only one aspect of providing sufficient resources for countries to meet the Millennium Goals. HIPC is dealing with the "peaks" in terms of debt burden and we need to keep the focus where it belongs, on increasing the net flows to poor countries, and not worrying so much about any one of the components in isolation. Addressing the InterAction question, he replied that the reality of the Development Committee meetings is that, because of their ministerial level, they are under tight time constraints and this imposes constraints on what can be done. However, all Development Committee documents are posted and publicly-available on the website in advance of the meeting, and suggested that CSOs consider engaging in discussion with their respective governments in advance, in order to influence the positions their ministers will take at the meeting. He emphasized that the Development Committee has a strong representation of developing countries—the Chairperson is a developing country Minister (now Trevor Manuel of South Africa).
3rd Round of Questions Addis Ababa
Mr. Getahun Tafesse of the Economic Association of Ethiopia pointed out how the Bank always tries to implement its own policies and how this is not succeeding. He then asked what kind of guarantee can be given that the PRSP strategy will be effective, and questioned if it might be better for countries to develop their own strategies. He also felt that donor agencies should make a distinction between government and CSO stakeholders. He stressed that NGOs/CSOs should also be a central focus. In his final comment, he claimed that fulfilling the MDGs is a very unrealistic aim for many developing countries. In fact, for some developing countries he believes they will be impossible to achieve, citing Ethiopia as an example. He sees the MDGs linked with PRSPs, in that the countries should be able to revise these initiatives to better fit their own realities. Rome
No comments due to temporary loss of video link. Bogotá
Ms. Angelica Velasco of Diálogo Mujer spoke about the gender issue and how these should not be forgotten in the FfD process. She asked if whether a compromise had been made within the FfD document that de-emphasized the issue of empowering women? Brussels
Ms. Isabelle Hoferlin of Social Alert raised the issue of economic and social rights, and the privatization of basic services. She regretted that the section on Global Public Goods (GPGs) was stricken from the Monterrey document. Washington
Mr. Aldo Caliari of the Center of Concern commented on open trade policies by saying that the Bank and Fund tend to give "aggressive advice" on trade liberalization. He cited paragraph 30 of the Monterrey Consensus document, which encourages open trade policies, while acknowledging the problems that may arise from it. He criticizes the document for lacking a commitment to resolving these problems. He then asked if the Bank will be taking a more cautious position on trade in the future? Enrique Rueda-Sabater began his comments by acknowledging that gender issues are a crucial dimension of development. He suggested that other processes are better suited for focusing on the issue of gender than FfD, which does not focus on sectoral or thematic issues outside its development financing scope. In terms of PRSP, he said that it should not be thought of as a "Bank judging policy", it is in fact an instrument to enhance ownership and put aid recipient countries at the center of donor-supported programs. It can be seen as a way of resolving the inevitable tension between the pursuit of ownership and the fact that donors have views on what kinds of programs they want to support. In addition, the MDGs now provide us with a clear sense of direction as well as discipline through the focus on outcomes—which is also a key element of the PRSP approach. Other points made referred to ODA's excessive reliance on government channels, but this may be less of an issue than it seems because many donor governments are open to using other aid delivery channels. The Bank, which needs to work through governments, has been urging governments to involve CSOs in the implementation of the majority of projects. On privatization, he said that Monterrey will not focus on this issue, however, it is important to keep in mind that the emphasis on this issue has come from the fact that in many poor countries subsidies to inefficient state enterprises were a huge financial burden and a hinder to development. Finally he addressed the point made on the lack of GPG language in the document and said, that he was not aware of the reasons for its last-minute removal from the document. GPGs had been discussed throughout the FfD preparatory process—with full support. The Bank also attributes great importance to GPGs and the Development Committee has focused on this issue in recent meetings. Carolyn Reynolds suggested that the participants look at the Bank's Globalization Research Report which was published in December 2001. She said that this report's messages represent a shift in the Bank's messages on economic liberalization. Jaime Biderman referred back to the discussion on PRSPs and pointed out that there would be a PRSP discussion during the side events at Monterrey. PRSP is a potentially powerful instrument for governments, as it should clearly set out the goals and discipline the process of donor assistance, enhancing government ownership and partnership. With regard to privatization, it is clear that in the past some public projects have failed to provide services to the poor—for example in the area of water supply—and that is why new options and mechanisms may be needed such as private concessioning. The private sector is not a panacea, and the best options for each country situation will be different, but we should try everything at our disposal.
4th Round of Questions Addis Ababa
Mr. Fikre Zewde challenged the Bank's fundamental assumption: "The Bank is not able to force recommendations on governments," and said this should be reconsidered. Also the question of the Tobin Tax was raised. Rome
Mr. Sergio Marelli of the Federation of Christian Organizations raised the issue of global governance. They felt this should be a key point and that a mechanism for it should be devised. Since the Bank is a key player in the international community, they proceeded to ask what approach the Bank will take on the subject of global governance in Monterrey. Bogotá
Mr. Gricerio Perdomo of the Columbian Confederation of NGOs raised the issue of democratization and its link to poverty reduction. Brussels
Ms. Eva Hanfstaengl of CIDSE raised an issue similar to Rome's comments, by asking how the recommendations in the last chapter of the Monterrey Consensus Paper might be fulfilled referring to better coherence between the UN, World Bank and the IMF and how the ECOSOC might reformed to become a more efficient instrument, and what the Bank's contribution might be? Washington
Mr. Don Crane of ACDI/VOCA called for a campaign targeting legislators to double development aid. He stated how he and other US NGOs had met with John Taylor of the US Treasury on this issue, and concluded that we are facing a challenge in raising the additional resources to meet our goals. Jaime Biderman strongly agreed on the need for good governance as a step in meeting the Millennium Goals. He said that governments must be able to formulate and implement good policies, deliver services, and be transparent. As for taxes on international transactions such as the Tobin Tax, he agreed with Enrique that at this time it is important to concentrate on the existing mechanisms to mobilize resources, instead of expending energy in looking at these new mechanisms . As for the issue of global governance, he believes the key is to focus on what can be done to benefit developing countries: Find pragmatic and innovative ways of enhancing the participation of developing countries; Enhance coordination between international organizations
Instead of favoring major systemic reforms, we should use the existing institutions and find ways to improve them. He pointed out that the Bank is in some ways actually more representative of the voice of the developing countries because the most populous countries, such as India and China, are well represented. In contrast, at the UN these same countries only receive one vote. In addition, he highlighted how the IDA 13 Replenishment Consultations have included participation by recipient countries.
Carolyn Reynolds added that over time, the Bank has broadened and deepened its relations with CSOs and now is working to enhance the capacity of governments to engage with NGOs/CSOs through avenues such as providing advice and training in participatory approaches. She pointed out that the objective of the PRSP process is to broaden participation of civil society in determining a country's development priorities. Enrique Rueda-Sabater explained that the governance of different institutions reflects their different mandates and purposes. There is no point on pursuing a blue print for the governance of all institutions. For example, the UN is a community of nations organized around the representation of governments or States, regardless of their demographic size. The Bank is a financial intermediary and has a governance structure that reflects this role, which includes the need to be able to mobilize resources from developed countries. The fact that developing countries with large populations, and large economies, are better represented in the World Bank than in the UN also reflects this role. His point was that there needs to be a mix of different dynamics within the system of international organizations that responds to the different needs and mandates. He finished by thanking the civil society participants for their insightful questions and thoughtful comments and assured them that their viewpoints were valuable to the World Bank's team on FfD as it heads into Monterrey and beyond. Carolyn Reynolds thanked all of the participants for their ideas and time, and announced that a summary report of this video conference would be sent to the participants and posted on the Bank website.
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