• English

Closing Plenary Session at the Conference on Financing for Development

Geneva, 7 December 2000

CONCLUDING STATEMENT BY Ms. D. HÜBNER

EXECUTIVE SECRETARY OF

THE ECONOMIC COMMISSION FOR EUROPE

Excellencies,

Ladies and gentlemen,

Colleagues,

As you know, this year has been good for the European economy. The economic performance in Europe has been actually better than expected, and in case of CIT better that at any time over the last ten years. The factors behind this phenomenon were not only of external character, it was also regional cooperation and progress in reforms. But to make also the long-term prospects look good, a number of challenges must be addressed and the work on building fundamentals, foundations of a market system and development must be carried on. To make this process a sustained one, we need progress with regard to financing for development.

We are not starting from scratch. We already have ten years of experience with financing for development and transition in Europe. History of those ten years brings both good and bad news; some processes have developed better than expected, others worse than we hoped for. That gives us the chance to draw on lessons already learnt.

This chance is given to us also by the so often emphasised diversity of Europe, which was stressed during our debate also with regard to experience with financing for development. This has provided a major advantage of this meeting, i.e. making good practice in financing for development available to others, as well as giving us a chance to learn from mistakes. We had the chance to confront the two different realities – the one of success and the one of problem.

This meeting takes stock of what has been achieved in financing for development; where we failed and where we are now. Now, I hope, we know better "why" we succeeded or failed. This meeting definitely confirmed our willingness, readiness and, to a large extent, also preparedness to work together on financing for development. The most important is that we have embarked on a dialogue on financing for development in our region.

We have also achieved a consensus on many issues related to financing for development in our region; we need more collaboration to make this consensus even broader and to better use opportunities that exist.

There are issues which have prompted interesting discussion on which we need more policy debate. We have agreed that mobilization of domestic resources is a key issue in transition and development, but we need to support national efforts by a conducive and enabling international environment.

We have stressed the importance of institutional environment for the process of financing for development and the essential role of implementation of rules and policies already in place.

We have underlined the complementarity of all available forms and sources of financing for development. Clear message here is that everything matters, not only "how much" but also "how" and "when" financing for development and transition is provided and used. A constructive combination of different sources and their efficient use for development is essential.

We have agreed on the importance of private flows in our region and continuing relevance of public funds playing a catalytic role. Raising extra public funds should not discourage enterprise efforts or savings, or otherwise distort resource allocation.

Instead of maintaining unfair and unproductive subsidies and massive inefficiencies in the production sphere, public resources freed by abolishing them should be used to absorb social costs of transition and should be shifted towards social expenditures, in particular for education and health. In this context, I would like to make reference to the often raised issue of the role of local level with regard to financing for development. State decentralisation reforms allow to catalyse local community to actively participate in development and its financing.

This complex process – financing for development, to be successful must be comprehensive and consistent and well sequenced adjusting to the changing reality in terms of the advancement of the institutional and structural reforms and overall economic performance, as well as stage of development.

We have agreed that we need close regional and subregional cooperation with regard to financing for development to better use available resources, to generate new ones, including innovative ones, but also the other way round - we need the financing for development process to be designed in such a way so as to enhance regional cooperation and accelerate catching up and integration in Europe.

The positive role of conditionality has been discussed and it seems clear that we must learn how to use it, or rather how to take advantage of it. The intellectual debate between donors and recipients allows to convert conditionality that comes from the outside into ownership by the recipient, giving eventually a partnership instead of conditionality. Conditionality can be seen positively as a source of a policy dialogue which itself leads to the ownership sense which in turn generates a greater sense of responsibility and efficiency at the implementation stage.

The change ten years ago has made it possible for Europe to move towards a truly integrated region. This integration process enables Europe to be stronger in the global economy. Our debate showed that all the forms of financing for development are a powerful tool for this integration and mutual prosperity.

In my opening remarks – I have mentioned that diversity, variety – is what best characterizes Europe. Our debate has proven that this variety does not apply only to differences in development but is also reflected in the diversity of forms and sources of financing for development, as well as in the diversity of partnerships, as these partnerships involve a wide range of development actors: governments, local authorities, non-governmental organisations, private sector, international organisations and international financing institutions. Partnerships are a key factor for the dynamics of development in Europe.

These partnerships imply also the need for a continued dialogue for which this meeting is a milestone. We will spare no efforts to facilitate it, building upon the various partnerships and cooperation which are underway within the ECE framework.

Thank you for your attention.