asdfSpecial High-level Meeting of ECOSOCwith the BWIs, WTO and UNCTAD                                                     ...
Theme 1: Promoting sustained, inclusive and                  cial protection for workers. Longer-term private invest-equit...
Special High-Level Meeting of ECOSOC with the BWIs, WTO and UNCTADand monitoring approaches and conditions for delivery.  ...
•      What policy measures are critical at the systemic           In the World Economic and Social Survey 2011, UN- level...
Special High-Level Meeting of ECOSOC with the BWIs, WTO and UNCTAD      Institutional investors, particularly pension fund...
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Newsletter on the Special high-level meeting of ECOSOC with BWIs, WTO and UNCTAD (New York, 12-13 March 2012)

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The Economic and Social Council will hold its Special High-level meeting with the Bretton Woods institutions, the World Trade Organization and the United Nations Conference on Trade and Development on 12–13 March 2012 at United Nations Headquarters, New York. The overall theme of the meeting will be “Coherence, coordination and cooperation in the context of Financing for Development”.

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Newsletter on the Special high-level meeting of ECOSOC with BWIs, WTO and UNCTAD (New York, 12-13 March 2012)

  1. 1. asdfSpecial High-level Meeting of ECOSOCwith the BWIs, WTO and UNCTAD Financing for Development (12–13 March 2012, UN Headquarters, New York) UN IT E NS D N ATIO Newsletter March 2012In this Issue Special High-level meeting of ECOSOC with the Bretton Woods institutions, the World TradeOverview 1Theme 1: Promoting sustained, Organization and the United Nations Conferenceinclusive and equitable economic on Trade and Developmentgrowth, job creation, productive (12–13 March 2012, UN Headquarters, New York)investment and trade 2Theme 2: Financing of sustainabledevelopment 4 T he Economic and Social Council will hold its Special High-level meeting with the Bretton Woods institutions, the World Trade Orga- nization and the United Nations Conference on Trade and Development on 12–13 March 2012 at United Nations Headquarters, New York. The overall theme of the meeting will be “Coherence, coordination and coop- eration in the context of Financing for Development”. The UN Secretary- General will address the meeting. Following a short opening plenary with brief statements by the President of ECOSOC and the heads of relevant intergovernmental bodies, the meeting will consist of informal thematic debates on the following topics: 1. “Promoting sustained, inclusive and equitable economic growth, job creation, productive investment and trade”; 2. “Financing of sustainable development”. The thematic debates on the above topics will be held consecutively on each day in an informal plenary setting of the whole, in order to fa- cilitate greater engagement of all participants and to promote an open exchange of views and experiences among all stakeholders, including civil society and the business sector. At the closing of the meeting, the Presi- dent of ECOSOC will make concluding remarks. A full summary by the President of ECOSOC will be issued as an official document. More information is posted on the FfD website at www.un.org/esa/ffd/ecosoc/ springmeetings/2012/index.htm. For further Information The meeting will have before it a note by the Secretary-General on Please refer to the Financing for “Coherence, coordination and cooperation in the context of Financing for Development Web site at www. Development”, which will provide background information and suggested un.org/esa/ffd/ecosoc/springmeet- points for reflection in order to inform discussion on the selected themes. ings/2012/index.htm. Financing for Development Office, 2 U.N. Plaza (DC2-2170), New York, N.Y. 10017 Email: ffdoffice@un.org, Fax: 212-963-0443, Website: www.un.org/esa/ffd
  2. 2. Theme 1: Promoting sustained, inclusive and cial protection for workers. Longer-term private invest-equitable economic growth, job creation, ment from overseas, especially foreign direct investment (FDI), can also play an important role in furtheringproductive investment and trade development. FDI can be a channel to diff using skills,The declining prospects for economic growth, especially knowledge and technology through the creation of link-in the developed countries, continue to threaten the ages between foreign affiliates and local firms.fragile recovery from the world financial and economic Proper policy interventions can considerably en-crisis. At the same time, global labour markets showed hance the potential for a trade-employment nexus.little improvement in 2011. Whereas unemployment re- Depending on each country’s circumstances, a balancedmained elevated in most developed economies in 2011, mix of economic, industrial, labour market, educationit has been particularly high in the countries facing debt and social policies can help maximize the contributiondistress and limited fiscal space. Youth unemployment that trade can make to employment and growth. For ex-rates are exceptionally high worldwide. Many workers in ample, developing countries should use available policydeveloping countries continue to face social challenges space to create dynamic comparative advantages, as wellsuch as unemployment, poor pay, vulnerable job condi- as invest in long-term support of science, technology andtions and lack of access to any form of social security. languages in formal and informal education, togetherOverall, according to ILO estimates, the world must with infrastructure development. Moreover, they shouldcreate 600 million jobs over the next decade to compen- enhance their role in global value chains by generat-sate for jobs lost during the crisis and meet the needs of ing incentives for technology transfer and assimilation,a larger global population complementary productive capacity and infrastructure. Domestic policy interventions are needed, espe- Likewise, developing countries should provide in-cially in terms of short-term stimulus, debt resolution formal firms with business services and access to capital,and orientation towards jobs creation. Timely and ap- as well as training and marketing support. They shouldpropriate policy interventions and reformed regulatory pay attention to the potential trade-off between securingframeworks can help support public and private invest- immediate commercial interests and losing policy spacement in job creation. Public spending measures, both through regional and bilateral trade and investmentin the form of active and passive labour market policies, agreements, in key areas such as intellectual propertytailored to the country’s specific socioeconomic context, rights, capital account management and debt restructur-can be very effective, including the extension of unem- ing.ployment benefits and work sharing programmes, wagesubsidies as well as enhancing public employment ser- Stable, predictable and durable long-term Officialvices, public works programmes and entrepreneurship Development Assistance remains crucial for sustain-incentives. Moreover, modernized, equitable and effec- able growth and employment in many developing coun-tive tax systems can help maximize government revenue tries. There are shortfalls in meeting aid commitmentsfor growth and employment promoting investment. and selectivity and volatility in aid delivery. In the cur- rent aid architecture, there is incoherence in policies and A well-functioning and effective domestive pri- policy coordination across institutions and stakeholdersvate sector is crucial for economic growth and job cre- because of the lack of focus on common goals. ODAation. Efforts to set in place an enabling legal and regu- should function as a catalyst for other financial flowslatory framework in developing countries should also be in poor countries and specific areas for the “right” kindaccompanied by equally critical measures to strength- of development. Policy interventions that are not di-en the availability of finance, especially to small and rectly connected to poverty reduction can contribute tomedium-sized enterprises (SMEs), to fund an effective that objective by supporting productive capacity build-physical infrastructure, and to more directly promote ing. There is a growing tension between “results-based”entrepreneurship through investing in education, skills delivery of resources and delivery based on “needs” as-and research in key sectors of the economy. Moreover, sessments to support “national ownership” and “policyit is important that legal and regulatory reforms do not space”. A complex and fragmented development financecompromise the broader social and environmental goals architecture is emerging with a multitude of actors andof regulation, including the need to ensure adequate so- new public-private partnerships setting up new delivery2
  3. 3. Special High-Level Meeting of ECOSOC with the BWIs, WTO and UNCTADand monitoring approaches and conditions for delivery. of nationally supplied reserve assets. Finally, there is aIn this context, the Busan High-level Forum on Aid Ef- need to strengthen the framework of global economicfectiveness in November 2011 put a renewed emphasis governance in support of growth and employment. Thison development effectiveness and the global partner- includes enhanced coordination, cooperation and coher-ship for development. Innovative sources of finance and ence across the UN system. Efforts should also be madeSouth-South and triangular cooperation can play an im- to ensure that there continues to be adequate engage-portant role in meeting development needs. ment between the UN and the G20 and complementar- ity of policy efforts between the UN, IMF, G20 and With regard to external debt, policy intervention other multilateral stakeholders.could strengthen the nexus between external borrowingand capital formation and help avoid external borrow- Some questions for discussion:ing to finance consumption booms and asset bubbles. • What type of coordinated policy actions are need-An appropriate cost-benefit analysis of debt-financed ed to sustain the fragile global economic recovery andgrowth-oriented projects may be the way forward for promote job creation?debt management and borrowing decisions. High levels • What policy interventions and regulatory frame-of debt in relation to GDP and exports are to be avoided works could support public and private investment inas they may decrease the net contribution of new bor- job creation?rowing to growth. Increasing attention needs to be givento the Principles of Responsible Borrowing and Lending, • What are effective ways to facilitate the flow ofreleased by UNCTAD in May 2011 as part of global long-term foreign investment to developing countries?efforts to strengthen the nexus between debt, trade, in- • What are the possibilities for setting in place a sys-vestment and growth. Debt distress and defaults have a tem of industrial relations that serves to promote invest-detrimental effect on growth and employment as borne ment and productivity while also ensuring decent work-out by the history of debt crises. It is reasonable to look ing conditions?for a balance among new resources, breathing space and • What policy measures could strengthen the avail-debt restructuring through differing tools of crisis pre- ability of finance, especially to SMEs, promote invest-vention and management. Countries need to agree on a ment in infrastructure and foster entrepreneurship?set of principles for resolving debt crises that provide for • How can the international community enhancea fair burden-sharing between public and private sectors the role of transnational corporations and global valueand between debtors, creditors and investors. chains in job creation and stability? • What global technology policies could enhance the Global economic growth and job creation continue trade and employment nexus through transfer and ca-to be hampered by shortcomings in the international pacity building?financial and monetary system. Major steps in thecontinuing effort to strengthen international financial • What steps are needed to reform the developmentregulation have been the introduction of the Basel III architecture and strengthen international financial co-framework and progress on the regulation of systemi- operation to better meet development challenges?cally important financial institutions and the shadow • How can the international community enhancebanking system. Moreover, in recent years, the question policy coherence and coordination among institutionalof how to manage volatile cross-border capital flows has stakeholders?received increased attention. Indeed, some countries re- • What measures can be taken to enhance the nexuscently introduced capital controls to contain the surge between debt and growth at the national and interna-in short-term capital flows. Many developing countries tional levels and keep debt sustainable?rely on reserve accumulation of US dollars as a mecha- • How can the international community promotenism of self-insurance against liquidity crises. Therefore, a fair burden sharing in resolving debt crises and debtthere are proposals to gradually strengthen the role of sustainability?SDRs as a reserve asset in combination with a range Financing for Development Office, 2 U.N. Plaza (DC2-2170), New York, N.Y. 10017 3 Email: ffdoffice@un.org, Fax: 212-963-0443, Website: www.un.org/esa/ffd
  4. 4. • What policy measures are critical at the systemic In the World Economic and Social Survey 2011, UN- level to promote growth and employment? What should DESA estimates the annual incremental investment be the short-term and long-term priorities? requirements for achieving sustainable development• How can the international community ensure objectives across a number of key sectors at about 3 per complementarity of efforts among the United Nations, cent of World Gross Product (WGP) up to 2050 (equal BWIs, G20 and other multilateral stakeholders? to over $1.9 trillion in 2010). About at least $1.1 tril- lion will be needed per year for incremental investmentsTheme 2: Financing of sustainable in green technology in developing countries. Given thedevelopment magnitude of financing requirements for a sustainable economy transition, financial resources need to be raisedPromoting sustainable development represents a key pol- from the entire range of private, public and mixed sourc-icy priority. The United Nations Conference on Sustain- es, and through multiple channels and instruments. Theable Development (Rio+20), to be held on 20-22 June key policy challenge is to create the necessary domes-2012, will focus on two themes: (a) a green economy tic and international conditions to unlock substantialin the context of sustainable development and poverty amounts of new and additional financing.eradication; and (b) the institutional framework for sus-tainable development. The key objectives of the Confer- The private sector is likely to provide the vast ma-ence are to secure renewed political commitment, assess jority of resources needed to move towards the greenprogress and implementation gaps and address new and economy. In order to support the three pillars of sus-emerging challenges in the area of sustainable develop- tainable development, it remains important to imple-ment ment major international commitments regarding finan- cial flows to developing countries. The public sector will The concept of greening the economy is viewed remain crucial to increase investments in sustainable de-as a means to achieve sustainable development. A green velopment. A strategic approach would be to use publiceconomy enables economic growth and investment funds in part to steer and leverage private sector finance.while increasing environmental quality and social in-clusiveness. The existing challenges in financing the Government policies at the national level are im-transition to a green economy as well as the measures portant in scaling up financing of sustainable develop-and policies that are needed to scale up financing are of ment. In general, “green technologies” need to becomecentral importance. Transitioning to a green economy cost-competitive with established technologies. Morerequires major structural and technological changes in broadly, the national innovation system (NIS) approacha number of key sectors such as infrastructure, industry, emphasizes the importance for an innovative economyagriculture, housing, transportation and energy. A wide that is based on interactive learning, information ex-range of policy measures can be used by countries to change, and coordination among firms, universities, re-encourage and support this move. Relevant public poli- search centres, policymakers and other actors. A greencies can go a long way to foster sustainable development. sustainability-oriented NIS (G-NIS) would integrateOne important element is mobilizing sufficient finan- the public-goods nature of many green technologies intocial resources, which may involve redirecting available the NIS framework.resources as well as raising new and additional financing. Green technologies should be treated as infant Some indications show that the bulk of current industries, with appropriate support, including publicfinancing for sustainable development is from pri- sector investments in infrastructure, subsidies and ac-vate sources. The public sector is estimated to provide cess to credit. Governments can help leverage private in-a smaller yet indispensable part of sustainable develop- vestments into green technology through targeted creditment financing. Mixed sources of financing, such as enhancement measures that help boost returns throughsovereign wealth funds, are of increasing importance. In subsidies, risk mitigating measures and other measures.addition, innovative financing mechanisms and facilities Consumer-targeted measures, such as green stickers andsupporting the implementation of multilateral environ- labelling systems, can play an important complementarymental policies and agreements have been instrumental role to encourage demand for green technologies.in providing funds for sustainable development purposes.4
  5. 5. Special High-Level Meeting of ECOSOC with the BWIs, WTO and UNCTAD Institutional investors, particularly pension funds, ing some of the existing funds, including the Clean In-could possibly generate significant benefits from invest- vestment Funds (CIFs). By some optimistic estimates,ing part of their assets into green growth initiatives. the volume of climate finance may already be as high asGovernments in general, and regulatory and supervisory $96.9 billion per year. Prompt delivery of the pledgedauthorities in particular, can promote green investments funds in ‘fast start’ finance for 2010-2012 is required in aof pension funds through supportive policies and mea- way that generates momentum for actions on the ground.sures. Greater efforts should be made to provide stron-ger incentives for the private sector involvement into A mix of public finance, carbon market financesustainable development activities. This can be achieved and private finance would need to be leveraged bythrough a combination of taxation, emissions trading development banks, as well as innovative sources of fi-and regulation. These efforts need to be complemented nance. As a complement, public instruments can helpby the public sector to provide effective risk-mitigation to leverage private finance. In addition, a number ofor revenue-enhancing instruments to attract private in- important sectors of the global economy are currentlyvestment. In this respect, there is considerable scope for untaxed, despite the externalities they generate. One keygovernments and multilateral institutions to use their sector in this regard is the international maritime andown resources to leverage financial flows from the pri- aviation sectors. Other promising ways forward to scalevate sector. up financing could involve some form of intervention in the global financial sector, either a financial transac- Attention needs to be given to ways encouraging tion tax, a currency transaction tax or an internationalforeign investment that generates and disseminates financial facility.technologies that mitigate greenhouse gas emissions.UNCTAD proposes a global partnership that will, Some questions for discussion:among other things, galvanize low-carbon investment • What are the main challenges in financing thefor sustainable growth and development. Microfinance transition to a green economy in various countries?could also be an avenue for raising private finance for • How should the private and the public sector worksustainable development, with several institutions al- together to mobilize the necessary resources for sustain-ready extending loans for clean energy products. Con- able development?siderable scaling up is nevertheless required with, amongother things, significant investments in human capital • How can developing countries effectively main-and infrastructure. There is also a need to consider ways stream green sustainability-oriented national innova-in which public-private partnerships can provide tion systems (G-NIS) into their national developmentmeaningful support to stimulating private financing in strategies?green economy projects at the national level. • What are the most effective government policies to “crowd in” private green investment? Measures at the international level to scale up • How can governments and multilateral organiza-financing for sustainable development should facilitate tions most effectively leverage private finance into cli-the free or low cost access to technology. This includes mate change mitigation and adaptation activities?global financial technology funds that create knowledge • How can financing be scaled up while at the samemade available as a public good, public sector purchase time streamlining the financing architecture to maxi-of relevant technology also made freely available, tech- mize its impact?nical assistance in building technology capabilities, and • How can multilateral development banks andhuman capital formation. other development financing institutions play a catalyz- ing role in channelling funds from public and private The proliferation of financing mechanisms in- sources into green investment?creases the challenges of coordinating and accessing fi-nance. The establishment of the Green Climate Fundunder the UNFCCC raises the question of consolidat- Financing for Development Office, 2 U.N. Plaza (DC2-2170), New York, N.Y. 10017 5 Email: ffdoffice@un.org, Fax: 212-963-0443, Website: www.un.org/esa/ffd

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