Rethinking Bretton Woods | Fri, May 20, 2005
Center Focus readers have read in earlier editions about the International Conference on Financing for Development (FFD), which took place in Monterrey, Mexico in 2002. Since that time, the Rethinking Bretton Wood Project has been actively engaged in monitoring and advocacy around this process and has continued to provide updates to our constituencies. The Financing for Development conference follow-up provides a key space to address the roots of global economic inequities, and to work for alternatives in global governance. Still, much of what was hoped for in 2002 has not yet been achieved.
Why is Financing for Development important?
The FFD is significant in that it offers several unprecedented features. First, it has convened all major institutions that impact development policy under UN auspices: the World Bank, the International Monetary Fund, the World Trade Organization, UNCTAD, and UNDP. Second, it has provided a political space to address the full range of sources of finance in an integrated and holistic way: mobilization of domestic resources and of international private resources, trade, debt, and public overseas development assistance. Third, by dealing with ""systemic issues,"" the FFD has enlarged the official public debate beyond the content of the policies to assess the power and governance arrangements that influence their design. Dealing with power and governance in the context of development is essential.
Consistent with the vision that the 2002 Conference represented a starting point for a dialogue rather than a final product, the FFD review follows a three-tiered process. This includes an annual meeting of the Economic and Social Council of the United Nations that brings together representatives from the UN, the Bretton Woods Institutions and the World Trade Organization to offer joint recommendations. In addition, the General Assembly of the UN meets with these institutions biennially. The second biennial meeting will take place on June 27th and 28th of this year. The last tier would consist of a follow-up conference to be scheduled no later than 2005. Overall, FFD and its review process have fortified the role of the UN in economic policy-making dialogues, an arena where the UN had increasingly become marginalized.
One important aspect of the FFD follow-up has been the fact that the UN has convened issue-based Multi-Stakeholder Consultations. These have helped to fill in gaps in the official meetings, which are generally too short to achieve much progress. They also create a forum between official meetings for different institutional stakeholders to further the work of identifying alternative policy recommendations, discuss the merits and feasibility of various proposals, and anticipate obstacles to their implementation. They have the potential to lead to consensus-building among civil society and institutional representatives.
There are four ongoing consultations which feed into this year's FFD review. Two of them (broadly focused on sovereign debt issues and on the design of domestic financial sectors, respectively) are being convened directly by the UN.1 The World Economic Forum is carrying out a third on ""obstacles to development.""A fourth consultation has been entrusted to the New Rules for Global Finance Coalition, in collaboration with the UN Office on Financing for Development. As a civil society-led consultation, this initiative provides an innovative channel for bringing important reform ideas and ideas for building momentum back onto the agenda. Proposals include ways to increase the participation of developing countries in the design of international economic policies, and to establish a rules-based framework for the settlement of sovereign debt disputes. This consultation will also allow for discussion of measures to regulate cross-border financial flows to ensure that they support social and development goals. These are complicated issues, but they are at the core of global governance rules.
The Center of Concern continues to play a leading role in civil society efforts to advance the Systemic Issues agenda of the FFD review. Aldo Caliari sits on the committee of the New Rules Coalition that is convening the multi-stakeholder dialogues as essential tools for building alternatives. The Center is also an active member of the CIDSE2 network, an influential actor in the lead-up to and follow-up process to the conference.
Aldo Caliari directs the Center's Rethinking Bretton Woods Project.