Letter to PM Re: Financing for Development Conference - March 14, 2002

The Right Honourable Jean Chrétien

The following letter was sent to the Prime Minister with copies to the Finance Minister and the Foreign Affairs Minister on March 14, 2002. It was signed by leaders representing over 100 Canadian development, social justice, labour and faith organizations.

The Right Honourable Jean Chrétien
Prime Minister of Canada
House of Commons
Centre Block, 309-S
Ottawa, Ontario
K1A 0A6

March 14, 2002

Dear Prime Minister,

We are writing to you, as representatives of Canadian non-governmental organizations, to express our dismay at the proposed outcomes of the UN Financing for Development process and Canada’s role in the negotiations leading to it. We call urgently for renewed leadership on the road to Kananaskis.

In the context of falling aid flows, a stagnant world economy and repeating financial crises, the financing of development is a critical question facing all nations, particularly given the Millennium Summit commitments to the eradication of global poverty. The “Monterrey Consensus” document, however, reflects the unwillingness of powerful states to even consider the development of a serious global policy framework for sustainable development. The supposed ‘consensus’ merely repeats the promise that further trade and investment liberalisation will enable the private sector to take care of the world’s poor, despite growing evidence to the contrary. The Financing for Development process could have been a forum to affirm the primacy of human rights in development and to investigate new and innovative approaches to the eradication of poverty; instead it has become an affirmation of the inequitable status quo.

Canada’s role and lack of leadership in the negotiations leading to the document has been particularly disappointing. Canada surrendered principle after principle during the negotiations, raising serious questions about the independence of Canadian foreign policy. The Canadian Parliament passed a motion, just 3 years ago next week, calling for measures to tax currency transactions to prevent systemic financial crises yet Canadian negotiators were quick to cut draft language in the consensus document that would have encouraged countries to enact regulations to control destabilising capital flows. Canada once maintained a proud and inclusive tradition of inviting the non-governmental community onto its delegations, yet not only failed to include NGOs in the FfD delegation, but did not resist the US proposed exclusion of NGOs from the observation of final text negotiations. On the floor of negotiations, the US was accused of blackmail by developing nations for its bullying tactics while Canada, once a supporter of country-owned and led development, remained silent. Hope that the Financing for Development process would initiate meaningful and inclusive dialogue on the central issues for global peace has been undermined with these tactics.

In the past, Canada prided itself on its role as “honest broker” at United Nations negotiations. Once commended for its ability to find a way between disparate positions and broker progressive outcomes, Canada risks becoming a mere echo of the US. By rejecting out-of-hand any new proposals and opting for business-as-usual, the USA, in particular, and with Canada by its side, is undermining four decades of United Nations initiatives in support of comprehensive rights for the poor and the marginalized. As a middle power, Canada has nothing to gain from US unilateralism and everything to win from a functioning system of political multilateralism. Why is Canada retreating from multilateralism in a post-September 11th world that most needs it?

What will the Canadian government do to recover the damaged Financing for Development process, which is already widely viewed as failing? The risks for Canadian credibility are substantial. Michel Camdessus, former IMF Managing Director, said last month, "Let's imagine that Monterrey is a failure, then forget about anything from Kananaskis," he said, "And let's imagine that both Kananaskis and Monterrey are failures. Then be prepared for a disaster in Johannesburg."

It is not too late to salvage the Financing for Development process and the important subsequent meetings its outcome will affect, including the G8 in Kananaskis. Monterrey must not be an end, but a beginning. To do so, Monterrey must not result in rhetoric, photo-ops and handshakes but commitments that go far beyond the “Monterrey Consensus” document in the months ahead.

We consider the following commitments to be the minimum necessary to salvage the Monterrey process and set the stage for real outcomes in Kananaskis. Governments must:

agree to a clear timetable for implementing the 0.7% of GNP for aid target coupled with immediate and sizeable aid increases;

commit to stabilise the international financial system with the goal of preventing future financial crisis. Demonstrate the commitment, in part, through the taxation of currency transactions and through support to countries who chose to regulate investment;

cancel the debt of the most impoverished countries immediately and initiate a process to assess and cancel the illegitimate debts of all developing countries;

establish a fair and transparent arbitration process for indebted countries;

evaluate existing trade and investment frameworks’ impact on poverty eradication with an eye to fundamental reform to meet Millennium Development goals;

commit to the equitable participation of all countries in reformed global economic decision-making bodies, with the United Nations as the primary and coordinating institution. Assign to UN a coordinating role in addressing the lack of institutional democracy in the international financial and trade institutions, namely the World Bank, IMF and World Trade Organization;

commit to approaches to development which include broad participation in economic decision-making from civil society groups, particularly those representing women, the marginalized and the excluded within society;

place economic decision-making within the framework of human rights and environmental treaties and commitments.

With a vision for a renewed relationship between the rich developed countries and the global south and commitments to a modest set of new proposals for poverty eradication and multilateral institutional reform, the Financing for Development process will not have failed. There is still time for Canadian leadership; we remain optimistic.

Sincerely yours,

John Mihevc
Halifax Initiative
(a coalition of 13 social justice, faith, development and labour groups)

Gerry Barr
President – CEO
Canadian Council for International Cooperation
(a coalition of 96 development groups)

Bruce Campbell
Executive Director
Canadian Centre for Policy Alternatives

John W. Foster
Principle Researcher
North – South Institute

Warren Allmand
Droits et Démocratie/Rights & Democracy

Derek MacCuish
Programme Coordinator
Social Justice Committee

cc: Hon. Paul Martin, Minister of Finance
Hon. Bill Graham, Minister, Minister of Foreign Affairs & International Trade