I have the honour to speak on behalf of the European Union.
The Candidate Countries Turkey, Croatia* and the former Yugoslav Republic of Macedonia*, the Countries of the Stabilisation and Association Process and potential candidates Albania, Bosnia and Herzegovina, Montenegro, Serbia, as well as Ukraine, the Republic of Moldova, Armenia and Georgia, align themselves with this statement.
Since the substance covered by the two agenda items Macroeconomic Policy Questions and Financing for Development are so closely intertwined, this statement deals with both of them. The European Union will however comment in more depths on Trade and Development when that sub-item is introduced to the Second Committee later this month.
As the European Union and other delegations highlighted in the General Debate of the Second Committee last week, we are meeting in times of serious global and interconnected challenges. We confront a financial crisis, an economic recession, food and energy insecurity, climate change and gender inequality. The European Union fully supports the global initiatives to deal with these challenges, including the policy framework launched by the G20. As part of these initiatives, the EU is taking comprehensive, timely, targeted and coordinated action to support developing countries, especially the poorest and most vulnerable. The UN Conference on the World Financial and Economic Crisis and its Impact on Development in June this year highlighted the importance of a global partnership for sustainable development to respond to the crisis. The EU looks forward to the process of following up this conference.
Global challenges require truly global responses. The experience, analysis and views of all countries should be brought to bear in order to achieve equitable and sustainable development. The Second Committee plays an important role in this regard. Here we can listen to and learn from countries from all regions and of all sizes and levels of development.
The agenda items Macroeconomic Policy Questions and Financing for Development are usefully discussed in the context of the Monterrey Consensus. This Consensus, which was reaffirmed and developed by the Follow-up Conference in Doha, is a landmark agreement for development as it lays the foundation for the global partnership within which the international community should work to achieve the internationally agreed development goals, including the MDGs. Now, when the achievement of these goals is at risk, the implementation of the Monterrey Consensus is more important than ever. We all share a responsibility to implement this global partnership. The European Union reiterates its firm commitment to the implementation of the Monterrey Consensus.
An effective intergovernmental follow-up process is essential for the implementation of the Monterrey Consensus. The EU therefore welcomes the steps to strengthen this follow-up process that ECOSOC agreed on this summer. We look forward to engage in the High-level Dialogue on Financing for Development on 23-24 November. This Dialogue should be used to review progress in the implementation of the Monterrey Consensus and the 2008 Doha Declaration, to identify obstacles, challenges and emerging issues and to propose concrete recommendations and actions.
A key principle in the Monterrey Consensus is that every country has the primary responsibility for its own development. The importance of good governance, rule of law, respect for human rights, gender equality and women´s empowerment, sound macroeconomic policies, effective national development strategies, as well as eradicating corruption cannot be overemphasized for the mobilization of domestic resources for development. The European Union will step up its support to partner countries in these regards, for instance in their efforts to strengthen public financial management and the tax and customs systems and to create an enabling business environment. A dynamic and socially and environmentally responsible private sector is necessary for generating sustainable economic growth. The EU supports increased international cooperation on tax matters and in the fight against illicit capital flight, including tax evasion and fraud. Efforts should be made to enable developing countries to benefit from this increased international cooperation. In this context, we support the expansion of the OECD Global Forum on Transparency and Exchange of Information, including the participation of developing countries.
Many of the measures to increase domestic resource mobilization also have a positive effect on international private flows of resources to developing countries. Such measures and risk mitigation are particularly urgent now when we see a significant drop in private flows. According to one of the reports of the Secretary-General, foreign direct investments, bank lending and portfolio flows to developing countries have contracted sharply in the wake of the global financial crisis. And remittance flows, which account for a large share of GNP in many developing countries, are projected to decline in 2009 across all developing regions. The EU encourages all countries to reduce the cost and improve the safety of transfers of remittances.
As I mentioned earlier, the European Union will go into more details on the link between trade and development when that agenda item is introduced to the Second Committee. But since trade is a key element of financing for development, I want to state today that the EU remains fully committed to swiftly reaching an ambitious, balanced and comprehensive Doha Development Round agreement, which should be of real value for developing countries, particularly the poorest. Success in the Doha Round would also bring an important contribution to recovery from the current economic turbulence. The EU calls on developed countries and developing countries in a position to do so to provide duty- and quota-free market access for Least Developed Countries, as the EU is doing with its Everything but Arms initiative. The European Union will continue implementing its 2007 Strategy on Aid for Trade. We welcome the commitment by G20 countries in Pittsburgh to refrain from raising barriers to trade and to bring the Doha Round to a successful conclusion in 2010.
To ensure a fair and sustainable recovery for all, the European Union strongly reaffirms its commitments to achieve a collective ODA target of 0.56% of GNI by 2010 and 0.7% of GNI by 2015. The EU´s ODA increased in 2008 to almost 50 billion Euros and accounts for about 60% of ODA worldwide. The EU further reaffirms its commitment to channel at least 50% of collective EU aid increases to Africa and to meet the target of 0.15% to 0.20% of GNP to the LDCs. The EU gives high priority to improving the effectiveness of its aid. We are in the process of elaborating joint approaches to division of labour, use of country systems and technical cooperation to accelerate the implementation of the aid effectiveness agenda. We expect other donors, including new donors, and partner countries to actively implement the Paris Declaration and the Accra Agenda for Action. The Union furthermore welcomes the success of the pilot phase of the implementation of the innovative sources of financing and stresses the importance of further developing and implementing innovative sources of financing.
Noting that the European Commission has recently estimated that the total net incremental cost of taking action on climate change in developing countries could amount to 100 billion Euros by 2020, the European Union reiterates its commitment to contribute its fair share of scaled up international public support for actions to tackle climate change in developing countries. This must work alongside other sources such as domestic finance and carbon market-based financing. We are continuing to consider the financing mechanisms required to monitor and deliver this scale of finance. Significant change will be needed, but we would like, as far as possible, to build on existing instruments and institutions.
The international community has made significant progress in debt relief in recent years. But the positive trend is at risk due to the global financial and economic crisis. As highlighted in one of the reports of the Secretary General, an increasing number of developing countries are now at a higher risk of debt distress. The EU will continue to support the existing debt relief initiatives, in particular the Heavily Indebted Poor Countries Initiative and the Multilateral Debt Relief Initiative, and to apply in its lending decisions the Debt Sustainability Framework recently reviewed by the IMF and the World Bank. We also support the Evian approach of the Paris Club as a flexible tool to ensure debt sustainability in times of financial crisis. The EU supports discussions on enhanced forms of sovereign debt restructuring mechanisms, based on existing frameworks and principles, including the Paris Club, with a broad creditors and debtors participation and ensuring comparable burden-sharing among creditors with a central role for the Bretton Woods Institutions in the debate.
The financial crisis has demonstrated the need to improve global economic governance and the functioning of the international financial system. The EU welcomes recent decisions to strengthen regulation, supervision and monitoring of the financial system. We support the ongoing reforms of the Bretton Woods Institutions to increase the voice, quota and representation of underrepresented countries, based on objective criteria that reflect changes in the world economy. The EU also supports staff diversification in the Bretton Woods Institutions and a merit-based and transparent process for the selection of the head and senior management of both the IMF and the World Bank.
The European Union stands ready to further discuss all the issues raised today in this statement, and others, in the Second Committee and at the High-level Dialogue on Financing of Development in the weeks to come. We look forward to learn from others, to clarify the views of the EU and to collectively achieve progress on the challenges the world faces today.
* Croatia and The former Yugoslav Republic of Macedonia continue to be part of the Stabilisation and Association Process.