The Conditionality Debate Rages On...
By Moreblessings Chidaushe
The Forum on the Future of Aid is an online community dedicated to research and opinions about how the international aid system currently works and where it should go nextorganised by ODI
By Moreblessings Chidaushe
The Group of 20 most industrialised countries met in South Africa on 17 and 18 November. The Finance Ministers and the Central Bank Governors of the G-20, adopted a reform agenda that translates the G-20 Accord for Sustained Growth into concrete policy measures for the countries that make up the G20.
The Meeting was fairly confident of continued global economic growth, but that downside risks to the near-term outlook have increased as a consequence of recent financial market disturbances. However, the meeting perceived that emerging markets were relatively unscathed by this turbulence and that slower growth would also reduce the current pressure on capacity and resources. G20 members agreed that the unwinding of global imbalances was a shared responsibility.
Reducing poverty and inequality remained enormous challenges for the G20 forum. Members discussed the prices of commodities including oil, focussing on biufuels as an alternative energy source. The case of Brazil, a leading producer of bio-ethanol was discussed. Key questions centred on how to develop a better energy mix, and the potential impact of this on climate change.
Another key issue raised was reform of the IMF and World Bank. South Africa, as host of the G-20 this year, pushed the group to focus more on changing voting rights at the IMF and World Bank to give emerging market countries a bigger say in the running of the institutions. The IMF agreed a year ago to give more shares to China, South Korea, Mexico and Turkey as a first step in a larger overhaul of its voting structure. Member countries have yet to agree on a new system that would give more representation to low-income and emerging countries. South Africa said they would work towards a new model of multilateralism in a manner that is systematic and gives due consideration to all involved.
Having taken over as chair of the G20 from Australia, which was host in 2006, South Africa now hands the chair over to Brazil, which takes over next year, followed by the United Kingdom in 2009.
Go to the G20 portal at www.g20.org
Source: Independent online
The Commonwealth Heads of Government meeting in Kampala, took place between 23rd and 25th November 2007. The meeting was held under the banner "Transforming Commonwealth Societies to Achieve Political, Economic and Human Development".The Commonwealth Heads of Government Meeting (CHOGM) was preceded by a Pre-CHOGM meeting of Commonwealth foreign ministers, held on 21st and 22nd November 2007.
Foreign ministers had substantive discussions on issues such as democracy, good office, terrorism, international trade and economic co-operation, financing for development, environmental issues and international disasters. In addition, the ministers received reports from the Commonwealth Foundation, Commonwealth of Learning, the Commonwealth Business Forum, and the Commonwealth Partnership for Technology Management and Civil Society," said Mamoepa.
Governments also focussed their discussions on global challenges including terrorism, conflict prevention, resolution, peace, and consensus building. Heads of Government received reports of the Commission on Respect and Understanding, the Committee on Commonwealth Membership and the Steering Committee on Commonwealth Connects. The Commonwealth Ministerial Action Group on the Harare Declaration also met on 22nd November to finalise its report.
Go to the offical portal at www.chogm2007.ug
Draft Invitation Letter
The meeting of G-20 Finance Ministers and Central Bank Governors, Cape Town, South Africa will take place on 17 and 18 November 2007
The 2007 Work Programme
For 2007, South Africa intends to have a G20 work programme (available from the official website) that contains a mix of legacy issues which have been deliberated within the G20 at some stage since the forum’s inception, and a few new issues. Potential themes are:
1)Global and domestic economic developments
2)Reform of the Bretton Woods Institutions
3)Fiscal elements of growth and development
4)Commodities and financial stability
Each theme is now addressed in turn, apart from the first - Global and Domestic Economic Policies and Principles - for which there was little information available at the time of writing
Reform of the Bretton Woods Institutions
The G20 work programme will focus on both IMF and World Bank reform. Contributions will be made toward resolving challenges in achieving second stage of IMF governance reform. The following issues will be examined:
•The new quota formula
•Purpose of quotas and extent to which access to Fund resources should be a function of quotas or of access policy
•Meaning of economic weight options for best capturing economic weight, periods for assessing economic weight, and approaches to addressing the challenge of data availability
•A detailed assessment of options to achieve convergence on the quantum of increase of basic votes
In addition, the 2007 work programme could include an initial examination of options on the best way to achieve a significant further alignment of quotas with the relative economic positions of IMF member countries when the next round of ad hoc quota increases take place. The work programme will also include some elements of IMF mandated related reform.
Regarding the World Bank, a range of governance and policy/mandate issues could form part of the G20 work programme for 2007. These include the following:
•Accelerating governance reforms in the World Bank, including increasing voice and participation of low-income countries both at Board and senior management level
•Strengthening the World Bank’s role in middle income countries
•Possible selective capital increases
•Possible increases in basic votes
•The proposal submitted by Mexico regarding a multilateral reinsurance corporation located within the World Bank Group
•Improving the selection of the President of the World Bank; and
•Monitoring progress with and obtaining regular updates on the External Review Committee on Bank-Fund Collaboration
Fiscal Elements of Growth and Development
Fiscal Elements of growth and development, or fiscal space, is a new component of the G-20’s work programme. This theme incorporates two main elements: the role of public expenditure and macroeconomic perspectives on fiscal policy and fiscal space
Commodities and financial stability
The G20 will look at ways in which commodity prices in recent years have affected G-20 member economies, and the role played by financial markets and financial regulatory frameworks in accentuating positive economic outcomes and minimising (or exacerbating) negative effects. The economic effects of commodity price changes differ between commodity exporters and importers, and can include positive and negative developments including boosts to exports and growth, rising tax revenues, lower costs of capital, industrial change, financial instability, higher inflation and exchange rate volatility.
This theme will be broken in two parts: 1) overview of commodity price trends, and 2) the role of macroeconomic and financial sector policies in addressing price shocks
2007 African Policy Workshops
Two one-day African policy workshops on policy themes of significant interest to African policy-makers, will be held on the day preceeding each of the two G-20 deputies meetings, at the same venues as the deputies meetings. These workshops will not be held under the auspices of the G-20 and will take place on 23rd March 2007 and 7th September 2007.
The annual summit of the Group of Eight leading industrialised nations (G8) ended on Friday 8th June 2007 in Heiligendamm, Germany. The central theme of the summit was Growth and Responsibility, with globalisation and Africa being key foci of the meeting. Key summit documents can be found here on the official G8 website. Heads of State and Government had reached agreements on key issues from climate protection to Africa policy to the newly launched Heiligendamm Process in which the industrialised countries will enhance their cooperation with the five biggest emerging economies in the form of a continuous dialogue
G8 and emerging economies
Leading industrialised nations can no longer meet many of the challenges they face on their own. The big emerging economies – China, India, Mexico, Brazil and South Africa, have an increasingly important role to play. At Heiligendamm both groups agreed to co-operate more closely and on a more continuous basis in what has becomes known as the Heiligendamm Process. Dialogue with focus on four key areas:
•Promoting and protecting innovation
•Strengthening the freedom of investment by means of an open investment climate, including strengthening the principles of corporate social responsibility
•Determining joint responsibilities for development, focussing specifically on Africa
•Joint access to know-how to improve efficiency and technology co-operation, with the aim of contributing to reducing CO¬2 emissions
The Organisation for Economic Cooperation and Development (OECD) in Paris is to provide a platform for this new dialogue, which will be launched in the second half of 2007. A progress report will be presented at the 2008 G8 Summit in Japan; a final report on the results of the dialogue will be put forward at the G8 Summit in Italy in 2009.
Furthermore, a dialogue forum beyond the Heiligendamm summit would be set on the institutional platform of the Organisation for Economic Cooperation and Development (OECD). Countries intend to achieve tangible results by 2009, for example to protect innovations, to establish fair investment conditions and promote technologies for improved energy efficiency
The G8 for the first time agreed on the need to establish common goals for the reduction of greenhouse gases. However developing countries made it clear that they would feel obligated to the process of reducing emissions if it was a process lead by the UN
The G8 stood by their commitment to increase their official development assistance to Africa to $25 billion each year by 2010. The G8 members’ total ODA is due to increase to US$50 billion a year by 2010. The G8 also agreed to provide an additional US$60 billion a year over the coming years to fight HIV&AIDS, Malaria and TB, especially for prevention programmes and to strengthen health systems in the least developed countries. Germany pledged €4 billion by 2015
The summit helped G8 countries to reach consensus on their positions within international trade bodies and organisations. For example, in the forthcoming Doha Round of the WTO negotiations, the G8 want to ensure that trade between industrialised and developing countries is made easier. In the coming weeks, trade ministers from industrialised and emerging economies will meet to lay the ground work for negotiations with the aim of liberalising global trade and help integrate developing countries into the system
Click on the attachment below to view the calender
2007 High Level Dialogue on Financing for Development, New York
The High Level Dialogue in October 2007 addressed six main areas, which first emerged at the first International Conference on Financing for Development in 2002 – mobilising domestic financial resources, mobilising international resources, international trade, international development cooperation, external debt and the coherence of the international monetary, financial and trading systems. Many speakers during the high level dialogue expressed concern growing economic inequalities, both between and within countries, particularly in the context of the current instability in global financial markets. While the ODA target of 0.7 percent of GDP remained elusive, many were encouraged by increased FDI targetting developing countries. However, the challenge remains to promote FDI in least developed countries or those with less stable governance. Delegates from developing countries acknowledged that good domestic governance, effective and transparent regulatory mechanisms and the rule of law were preconditions for attracting investment. Many agreed much had been done to increase debt relief, but long-term debt sustainability remained a significant issue, particularly for least developed countries.
The 2007 Dialogue had special significance, as it made a major contribution to the preparation of the Follow-up International Conference on Financing for Development to review the implementation of the Monterrey Consensus, to be held in Doha, Qatar in September 2008. In his concluding remarks at the 2007 High Level Dialogue on Financing for Development in New York, the President of the General Assembly informed participants that the General Assembly would shortly begin consultations on a procedural resolution to set out the modalities for the Doha Conference. He also announced that the process would be taken forward by the facilitators - Ambassador Abdelaziz of Egypt and Ambassador Løvald of Norway
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