(12 August 2011) Authorities from various Latin American and Caribbean countries and high-level international experts called for the international cooperation system to provide a comprehensive answer to the challenges of development, which is not only aimed at meeting the needs of low-income countries, but which also considers the different needs and weaknesses of medium-income countries.
During the Latin America and the Caribbean Regional Consultation on Financing for Development, which took place on 10 and 11 August at ECLAC headquarters in Santiago, Chile, government representatives and distinguished specialists considered measures and political proposals to increase the funding sources and mechanisms for development, as well as to revise the allocation criteria among countries. This is more important within the framework of the present situation characterised by a high degree of uncertainty.
In 2010, the official development assistance (ODA) from donor countries was approximately 0.32% of the gross national income (GNI).
The countries stressed the importance of increasing funding resources for development. The need to increase ODA in order to reach the goal of 0.7% of GNI, agreed to at the International Conference on Financing for Development (Monterrey, Mexico, 2002), and Goal 8 of the United Nations Millennium Development Goals on developing a global partnership for development, were also highlighted.
ODA flows to Latin America and the Caribbean only reached 7% of global participation in 2009, while Africa and Asia received 37% and 30% of these funds respectively.
The meeting, held by ECLAC in collaboration with the Government of Chile, current holder of the Pro Tempore Secretariat of the Rio Group, discussed the situation of medium-income countries, with particular attention given to the needs and opportunities which arise in the new global economy.
The delegates at the meeting concluded that classification by income does not take into account the heterogeneity of medium-income countries, which includes most of the Latin American and Caribbean nations.
Despite the positive development in economic and social terms, the countries of the region must still bridge significant gaps and the resources generated within the countries are not sufficient to do so. The representatives agreed that an international system is required which is able to assist the countries in their development efforts, in a comprehensive, transparent and legitimate manner. The delegates and panellists also discussed the importance of domestic funding mechanisms, in particular the need to make tax reforms and to re-establish the development bank in the region.
Likewise, they discussed exploring new funding mechanisms, such as taxes on carbon and global financial transactions, and measures in force, such as the air-ticket solidarity levy. Developing trade through cooperation mechanisms and financing for development was also highlighted as important.
The participants of the Regional Consultation indicated that South-South cooperation and triangular cooperation are fundamental and do not replace ODA. They also suggested creating special common funds and cooperation programmes, as well as strengthening regional financial integration through a plan in compliance with this objective.
"The concept of development must not only focus on low-income countries. This is a wide concept which concerns the majority of the emerging economies and those known as medium-income countries," said the Executive Secretary of ECLAC, Alicia Bárcena, at the opening of the meeting.
"The current levels of ODA are not sufficient," she said, and added that, "the allocation criteria, both for ODA and public and private funding flows, which rank according to average income, are not appropriate as they do not grasp the natural complexity of development."
Ms. Bárcena explained that the medium-income countries are heterogeneous and that the international cooperation system must be able to deal with the development needs, including numerous criteria and variables, in a comprehensive manner.
According to the Executive Secretary of ECLAC, the criteria for funding allocation for development must include the weaknesses and specialities of the countries of the region, their structural challenges and gaps to be closed in their economies, such as the disparity in inequality and social protection, education and job training deficits, productivity problems, lack of investment, difficulties in accessing stable funding flows and the limitations of the tax system.
- Words by the Executive Secretary of ECLAC, Alicia Bárcena (in Spanish)
- Presentation by the Executive Secretary of ECLAC, Alicia Bárcena (in Spanish)
- Document "Financing for Development and Middle Income-Countries: New Challenges"
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