Remarks by Angel Gurría, OECD Secretary-General
UN MDG Summit, New York, 21 September 2010
Ladies and Gentlemen:
It is a great pleasure for me to participate in this event. The meeting of the Leading Group on innovative financing for development provides unique opportunity to consider progress until now and the way forward.
Since we made our historic commitment to end poverty by 2015, gains have been uneven. Absent a major push in the next five years, we will fail to meet our commitment to the world’s poorest. The financial and economic crisis is not an excuse. While we focus much of our attention on the crucial task of consolidating the economic recovery, we should not lose sight of the major challenges to development. Raising inequality will not jeopardise future growth and prosperity exclusively in the developing world. It will threaten the global economy as a whole.
Renewed interest for innovative financing
The global economic downturn has contributed to a renewed interest for innovative financing. Eight years after Monterrey, the richness and dynamism of innovative financing is impressive.
New players - emerging donors, philanthropic organisations, special purpose funding initiatives, innovative financing instruments and sovereign wealth funds, have created new sources of development finance. In addition to official development assistance (ODA) commitments, innovative financing has a great potential to mobilise new revenues, new actors and to address market failures. But we need to ensure that this mobilisation stays away from any temptations to “repackage” ODA and contributes to more and better aid.
Towards more effective financing for development: the importance of international co-operation
The efficient and fair mobilisation of additional and innovative sources of financing for development depends more and more on enhanced international cooperation.
Take tax matters. We must strengthen our collective efforts against tax havens, weak transfer pricing regimes, and illicit financial flows in developing countries. They represent billions of dollars that could otherwise have gone to support development. This is an important area of OECD work and I am happy to report that significant progress has been made over the last 18 months. Since April 2009, over 325 tax information exchange agreements have been signed and over 160 tax treaties have been negotiated or re-negotiated.
Innovative sources of financing are not limited to tax solutions. In 2007, the OECD launched the Principles for Private Sector Participation (PPP) in Infrastructure. We work with a number of developing countries to assist with implementation and monitor policy recommendations.
Together with the African Development Bank, we have also put together a Capacity Building Programme for PPPs in Africa. It helps governments make use of innovative financing for infrastructure, such as syndicated loans, municipal bonds and pension funds, among others. Such instruments involve specific risks. Therefore, together with Italy’s G8 presidency, we complemented this Programme with an Initiative for Risk Mitigation in Africa.
It is important to note, however, that for the innovative financing agenda to be effective, it needs to be embedded in a broader framework for development. In this respect, the G20 commitment to narrow the development gap and establish a dedicated Working Group is an important step forward. Alongside other International Organisations, the OECD is providing technical advice to member countries as they design Action Plans to be adopted at the G20 Summit in Seoul.
Ladies and Gentlemen:
In conclusion, let me stress that the OECD welcomes the work of the Leading Group on Innovative Sources of Financing for Development. We stand ready to bring support and advice, in particular in tracking development funding, aid effectiveness and taxation. More work in these areas is key to ensure maximum impact of innovative financing.
Today we are witnessing a historical convergence of interests among countries at different stages of development. Let’s take this opportunity. Together we can harness the full potential of innovative financing to move the development agenda forward and meet our commitment to the world’s poorest.
The OECD and the Millennium Development Goals: Addressing key challenges in development