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The international monetary, financial and trading systems in support of development. Presentation at the ESCWA Member Countries Regional Consultation in Preparation for 2008 FFD Review Conference By Aldo Caliari, Center of Concern Doha - Qatar April 30, 2008. Outline. Follow up process
Presentation at the ESCWA Member Countries Regional Consultation in Preparation for 2008 FFD Review Conference
By Aldo Caliari, Center of Concern
Doha - Qatar
April 30, 2008
Process characteristics of Monterrey and its follow up:
>All stakeholders, beyond UN
>Convening and coordination role of the UN: political considerations underpin development policy
>Holistic consideration of all mechanisms for development financing
Evaluation of follow-up since Monterrey:
Agenda-setting power of the Monterrey Consensus, beyond the UN.
Main tools, ECOSOC High Level Dialogue and General Assembly High Level Dialogue, have proved weak.
Need for strong follow up process:
A variety of formats (FFD Commission, FFD Council, upgrade of existing process)
But essential features should be:
1) Periodic and frequent
2) Negotiating power (thus, some instances of existing process would become pre-negotiating)
3) All stakeholders, and at the highest level (“spirit of Monterrey”)
It should be accompanied by (though not consist only of):
By definition, it cuts across all chapters.
Issues: 1) Foreign investment, 2) Domestic investment, 3) Access to international financial markets, 4) erosion and uncertainty of market access concessions, 5) impact on absolute size of market access
Lack of adequate institutional structure to provide exchange rate stability in a credible way (implement para. 54 of MC). IMF proved a failure at this task (multilateral surveillance).
Role of regional financial and monetary cooperation
Need for domestic policy space to manage the exchange rate (IMF bilateral surveillance)
What protecting tools in trade and investment agreements? (Exchange rate safeguards, opt-out clauses)
Issue: Do they take into consideration lessons learned on financial crises prevention and resolution? (East Asia, Argentina, now US)
Treaty provisions that discipline management of:
Issue: shaping trade and investment rules not to increase exports/ attract foreign investment, but to raise levels of domestic capital:
Relative value of market access
Revenue from natural resource extraction
The addition of value (know-how, technology)
The export –investment nexus and debt service
A strategic approach to “Aid for Trade”
Financial instability and trade
Foreign Direct Investment and the BOP
The role of multilateral institutions/aid on governance of the trading system
Export-led strategies in the context of rising domestic currency-denominated debt
Net result after Singapore + 2008 Spring meetings decisions: 2.7 % voting power changed hands
Variables in quota formula: GDP, openness, variability, reserves
Effective voting power not addressed
The broader picture:
Less lending + More surveillance & regulation=can a governance structure so reliant on funding capacity of members be any longer justified?
Standards and codes in the light of current crisis (e.g. Basel II)
Implementation (MC para. 57):
12 G7-endorsed Standard and Codes continue to be part of IMF/World Bank incentives and sanctions
Design (MC paras. 63 and 57):
No progress registered.
Credit rating agencies
Regulation of international finance
The emergence of “new” actors: Sovereign Wealth Funds, Hedge Funds, Private Equity Funds
Design and monitoring of conceptual and operational aspects.
Definition of aid, review of delivery performance, coordination issues.
FFD Review should:
. assess the operationalization of Aid effectiveness mandate from Monterrey Consensus (an assessment of Paris Declaration on Aid Effectiveness and follow up).
. Strengthen the ECOSOC Development Cooperation Forum as a far more adequate venue to hold this discussion
ECOSOC Committee of Experts, since 2004
Difference in outputs with OECD similar body: e.g., Model Convention on Bilateral Taxation
Conclusion: Voice matters
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