BSP Crisis+ +90+Minutes+270109

8/6/2019 BSP Crisis+ +90+Minutes+270109

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Presentation byHans dOrville, ADG/BSP90 minutes to convince27 January 2009


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qua rup e g o a cr s sunfolds

In the prime of globalization, we areexperiencing an accumulation of fourinterrelated crises, mutually feedingon each other: Climate change crisis

oil and energy (price) crisis

Food (and hunger) crisis

Financial and economic crisis


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A quadruple crisis

unfolds The consequences of these crisis -

individually and even more so combined -for development and all stakeholders

involved (people, governments, civilsociety, private sector, NGOs, multilateralagencies) may be devastating.

Hence there is an urgent need to developeffective strategies to prepare for alleventualities and to compensate andcounter any negative fall-out.


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The new global s(l)(h)owdown Profound and deepening financial and economic

crisis affecting all countries - the impact of realglobal interdependency -, requiring injection of(hundreds of) billions of US$ by Governments a) intobanking sector to maintain liquidity of banks anduphold their ability to provide credit - and b) toprovide economic stimulus programmes of a

Keynesian nature Real estate/housing market meltdown - with many

foreclosures and personal bankruptcies

Stock and commodity market crash (krach) andshrinking confidence/trust in economy


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The new global s(l)

(h)owdown 2 Deep and long global economic recessionlooms for ALL countries - with highunemployment, shrinking tax receipts, lowerexports and trade, gyration in value of

currencies, decreasing tourism income,reduced consumption levels - and the specterof deflation

Oil and commodity prices are in a steep fall,affecting the income of many oil-producing(developing) countries - while lessening theburden for the majority of the developingcountries, which had absorbed e.g. in manyAfrican countries all ODA inflows


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e e ca mens on

The global financial crisis has spread like wildfire

across the world because one single model ofglobalization, i.e. liberalizing market economywithout regard to diversity, different stages ofdevelopment, needs etc. was pursued.

The deliberate pushing aside of alternative

models and approaches points to a moral andethical deficency, which policy-makers wouldhave to account for.

Kofi Annan recently denounced as incrediblyshort-sighted - as well as immoral for wealthycountries to use this financial crisis to droppromises to help the poorest (IHT)


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Developing countries, the most defenseless - andoften times innocent bystanders - face a perfect

storm (WB) and for them the crisis may translate into lower government budget allocations to social AND

productive sectors;

Less (discretionary) funds for activities in ED, SC, CLT and CI

Lesser prospects for attainment of IADGs/MDGs by 2015

rising poverty levels - indeed more than 100 millionpeople have already been pushed back into poverty sinceonset of crisis (WB President Zoellick)

More demand for official development assistance (ODA) andforeign direct investment (FDI) flows

More demand for multilateral and NGO/foundation funds More recourse to South-South cooperation


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For industrialised countries, this may translateinto Lower ODA earmarking and allocations, abandoning

commitments made only recently (e.g. 2005 G-8Gleneagles commitment to double aid to Africa by2010) - at present, US$ 30 billion short;

overall, more pronounced trend towards lower ODA

Less ODA for select sectors, especially those notprotected by specific international pledges oragreements

Less availability of discretionary funds and hencelower/stagnant levels of extrabudgetarycontributions to multilateral organisations

Lack of readiness to subscribe to new multilateral

initiatives


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For the private sector, this may translate into

Lower economic growth Less trade with developing countries irrespective of

trade barriers and custom levels

Lower levels of FDI flows

Less loans for investment and trade in developing

countries Lack of interest in new public-private partnerships

requiring private sector funding

Overall, reduced confidence in market forces

Lower volume of donations to NGOs and charities Lower programme funds earmarked by foundations?


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The multilateralfallout

Global collisions and contradictions arise;difficult to resolve - e.g., lower budgetallocations by developing countries makesthem look towards UN agencies which bythemselves my be hit by lower budgets - or

promote trade while credit dries up doing more with less: demand by

developing countries for assistance willincrease while contributions to agenciesare likely to decrease (zng or worse)

It may also mean more focus on upstreamadvice


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The multilateral fallout

2 Can there be additionality even for (UN) reformframeworks and how long will currentcommitments hold (e.g. MDG-F and its newwindows; support to One UN Funds; no country

left behind in EFA who has a credible nationalEFA plan)? How will IMF loans and the related

conditionalities affect UNDAFs and OneProgrammes/Funds (e.g. Pakistan)?

Will UN reform efforts at the country level beaffected - if additional donor funds are notforthcoming to One or UNDAF Funds?


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The multilateral fallout3 Will governments and multilateral agencies be able

to maintain their professed commitment to fightclimate change and environmental degradation - orwill that be sacrificed for straightforward economicsurvival action and other more immediatepriorities??

Will any sectoral priorities be sacrificed or pushedback?

Overall - will there be a need to redefinemultilateralism - towards more collaboration?

Danger: excessive focus on new, more transparentand accountable financial architecture, without

regard to the level of real needs of people andinfrastructure needs


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G-20 Summit Washington15 November 2008 - signal

of hope? The G-20 Declaration of the Summit on Financial Marketsand the World Economy on 15 November 2008 outlined aroadmap for future action to stabilise and reform financialmarkets, to preserve an open global economy, to promotetrade, to provide credit and liquidity and to restarteconomic growth and overcome recession

Major focus was on strengthening transparency andaccountability curbing speculation in currency, financialand commodity markets; enhancing sound regulationnationally and internationally; promoting integrity infinancial markets; and reinforcing international cooperation

But the summit also emphasized in the concluding section

on a commitment to an open global economy - thoughalmost as an afterthought and with rather weak and littlecompelling language or conviction - on:


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- summ - a s gna ohope? A commitment to free market principles which are

essential to economic growth and prosperity and havelifted millions out of poverty; The importance of rejecting protectionism and not

turning inward in times of financial uncertainty; The impact of the crisis on developing countries,

particularly the most vulnerable;

The importance of the MDGs, the development assistancecommitments the participants have made

Urge both developed and emerging countries toundertake commitments consistent with their capacitiesand roles in the global economy

Reaffirm the development principles agreed at the 2002Monterrey Conference on Financing for Development,which emphasized country ownership and mobilizing allsources of financing for development.


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The lacunae in the G-20message

Sadly, no word about preventing a rollback in the volumeof development finance, the need for investment ineducation and health precisely at the present juncture tobuild the foundations for future development andprosperity, or underlining the critical role of andproviding the necessary resources to other multilateral

organisations than the Bretton Woods institutions..We are left simply with a statement that the summitteers

are confident that through coordinated partnership,cooperation and multilateralism (of an undefined type),the world will overcome the challenges before it and

restory stability and prosperity in the world economy.


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World Bank calls for aid

boost The World Bank President called on donors

to boost financial aid to developing nationswhich find themselves at the mercy of a

crisis that is not of their making Empowering developing and emerging

countries and economies is imperative

Helping nations pursue economic

development and long-term prosperityshould be the goal of development finance.


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Doha Follow-up International Conferenceto the Monterrey Consensus -

28 November - 2 December 2008It adopted a voluminous Outcome Document containing

the Doha Declaration on Financing for Development,now to be submitted to the UN General Assembly forendorsement.

Highlights of this Declaration:

a) the reconfirmation by and large of the MonterreyConsensus (insofar not breaking any new ground);

b) the emphasis, especially at the insistence ofdeveloping countries, on the need to remaincommitted to the current ODA targets, irrespective ofthe fallout of the present crisis;

c) in addition to the traditional supply side concerns ofdomestic resource mobilization, ODA, debt relief andtrade a strong focus on innovative financingapproaches;


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d) a strong section on gender equality and the economics ofgender;

e) an explicit focus on social investment, including educationnot least driven and inspired by UNESCOs successfulHigh-level event; and

f) a decision to hold a UN conference at the highest level onthe impact of the current financial and economic crisis ondevelopment.

g) On the margins of the Conference, the President of theGeneral Assembly also launched a Commission ofExperts on Reforms of the International Monetary andFinancial System.

h) If anything, the continued absence of scientific, cultural

and communication issues on the agendas and theoutcome documents of conferences like the one in Doha isa source of dissatisfaction and we may need to reflect howto remedy this deficiency.


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Financing Education inConflict-Affected Areas to

Achieve EFA Goals From UNESCOs perspective, most significant

was the High level Side Event: FinancingEducation in Conflict Affected Areas to Achievethe Education for All Goals. It was organized by

ED and NYLO and held under the auspices ofFirst Lady Sheikha Mozah. The list of participantsfurther included the UN Secretary-General, thePresident of Burundi, the Vice-President of ElSalvador, the President of the UN GeneralAssembly, numerous Development Cooperation

Ministers and Heads of bilateral agencies (e.g.Netherlands, USA) as well as senior officials, NGOleaders and senior colleagues from the UN system(World Bank, UNICEF, UNFPA) and regionaldevelopment banks (Asian Development Bank).


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Education in Conflict-AffectedAreas - contd

The discussion resulted in the Doha

Statement on Financing Education in

Conflict Affected Areas. This event laid an

excellent foundation for the upcoming spring2009 discussion by the UN General Assembly

on the very subject.


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High-level Group on EFA, 8thMeeting - 16-18 Dec 2008, Oslo

The OSLO DECLARATION ACTING

TOGETHER, was adopted by the participating

Ministers, leading officials of multilateral and

bilateral agencies, senior representatives of civilsociety and private sector organisations, gathered

at the invitation of the Director-General of

UNESCO and of the Minister of Environment and

International Development of Norway


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Oslo Declaration -contd

The HLG noted that it took place in the context of aglobal economic slowdown spurred by a financial crisisunprecedented since the 1930s. The Declaration statedthat It will be imperative to protect and insulate theworlds poorest children, youth and adults from the

worst effects of the crisis, as they carry the leastresponsibility for these events. The crisis should notserve as justification for any reduction in nationalspending and international aid to education. Instead,steadfast support for achieving the internationally

agreed development goals, including the EFA andMillennium Development Goals (MDGs), is more vitalthan it was before the crisis.


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Reaffirming the centrality of education for development

(3.) we reaffirm that education is a fundamental human right, to berespected at all times. It is one of the most effective tools forachieving inclusive and sustainable economic growth and recovery,reducing poverty, hunger and child labour, improving health, incomesand livelihoods, for promoting peace, democracy and environmentalawareness. Education empowers individuals with the knowledge,values and skills they need to make choices and shape their future.Universal access to quality basic education and better learningoutcomes are the drivers to achieve the IADGs, including the MDGs.As reaffirmed at the September 2008 United Nations MDGs summit,sustained investment in education and health is essential for reachingthe MDGs.


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(4.) We therefore agree to better plan and coordinate global advocacyefforts for all six EFA goals. We task the EFA convening agencies and

interested EFA partners to furtherdevelop a joint EFA advocacy plan ofaction and present its first results to the next meeting.

(5.) Educational strategies need to be integrated within broader anti-poverty and national development policy frameworks. The fact that childmalnutrition and ill health remain a major obstacle to educational access

and achievement for the poor highlights the intricate connections amongeducation, health and social conditions. It underscores the need forstronger inter-sectoral policy coordination.

(6.) We request the EFA convening agencies, to engage with relevant UNagencies such as the WHO and the WFP as well as interested EFA

partners in order to better coordinate education, health and nutritioninitiatives in integrated programmes, targeting young children in poorcommunities in countries far from EFA. We commit to support suchinitiatives that should be country driven and backed by development

partners.


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The UNESCO perspective

As exemplified by the Oslo Declaration, criticalneed for specific and effective advocacy formaintaining or increasing ODA flows in time offinancial downturn with all relevant partners(education, climate change).

Multi-sectoral coordination, especially at thecountry level, will be essential to attain IADGs

Concentration+prioritisation in the face of lowerresource prospects and growing needs

Need for even more sharpened and results-oriented35 C/5


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The UNESCO perspective 2

Need for more imagination and creativity indelivery: focus on less costly initiatives - andreorientation towards (cheaper but effective)

upstream initiatives - enhanced visibility Whither the UNESCO budget level: can zrg be

obtained for the 35 C/5? How can we preservecurrent levels of extrabudgetary resourcescritical for outreach and impact?

Need for a revision of 34 C/4??


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Specific action by

UNESCO Urgent need for sustained monitoring of trendsin the spheres of competence of UNESCO: In developing countries as regards budget allocations

to education, the sciences, culture and

communication and information and continuation ofmulti-donor programmes and projects

In industrialized countries, flows of ODA, sectorallybroken down (data by OECD), and of extrabudgetaryresources to UNESCO and other multilateralorganizations

In case of negative trends, launch global alerts anddesign proactive counter-strategies

2


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2 Strengthen critical areas where UNESCO can

make a difference: Advocacy for EFA and preservation of national

budget allocations to education Accelerate education for sustainable development

- in creative and effective ways to inducebehavioral changes with long-term effects

Build capacities for operating national scientificknowledge basis - we must become more adept atquickly translating scientific evidence/innovationinto policy changes and practices

Inure policy initiatives and investments instrategically important sectors like education,

science, culture as well as communication andinnovation

Preserve resources for culture as a critical elementof sustainable development and education

S ifi ti b


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Specific action byUNESCO 3 We must mobilise our efforts in packaging and

sharing knowledge and information as well aspolicy advice that can help countries to cope withthe multiple crises

Paradoxically, this will also need an immediateinfusion of resources - not a cutback

It is not charity, it is investment in the worldsimmediate future - the crisis has alreadyundermined our global economic security

Action in the social sectors is critical for futureglobal stability and prosperity: investments indevelopment assistance and the social sector must

be defined by their long-term return, not theirshort-term cost


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The crises: moment forglobal reflection and

stocktaking Almost exclusive emphasis on macroeconomicsand on supply side of development: ODA flows,FDI, debt relief

Insufficient focus on sectoral demand side, like

resources required for EFA, SC, CLT, CI oragriculture, health, industrial development, labor

No effort is apparent to link supply and demandsides of the equation - need for closercoordination between Bretton Woods institutions

and UN system organizations


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The call for vulnerabilityfunds WB President Zoellick proposed in IHT of 24 Jan.

2009 the creation of vulnerability funds, to befed by developed countries with an amount of0.7% of their respective stimulus packages toassist developing countries that cant affordbailouts and deficits

The funds should be taken from the dedicatedbailout/stimulus packages

This would translate for US to an immediatecontribution of US$ 6 billion

WB+Japan launched programme to recapitalisebanks in developing countries


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Focus of vulnerability

funds Creation of safety net programmes Food-for-work programmes Seed and fertilizer projects

Maternal and child nutrition projects School meal programmes Cash for work programmes Road work and drainage INVESTMENTS IN HEALTH, EDUCATION

AND NUTRITION MUST BE MORE THANTEMPORARY POVERTY RELIEF: THEYARE INVESTMENTS IN HUMAN CAPITAL


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Vulnerability funds -

contd Investments in infrastructure,

including financing for low-carbontechnology projects

Support small- and medium-sizedenterprises and microcreditinstitutions


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A moment for stocktaking -and action This all then calls for effective strategies and

solid calculations for the various sectoral areas -a challenge and a survival necessity/opportunityfor UNESCO

The only available sectoral estimate of US$ 11billion annually for EFA may well be outdatedand too low, as it was produced some 10 yearsago

Where do we stand with estimates forscience/water/oceans; culture; communicationand information??

Next steps: sensitisation


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Next steps: sensitisation- awareness - advocacy -

coalition building

CEB/HLCP will - with UNESCO part.-discuss the

issue at its next session 26-27 February 2009,

Geneva

As agreed by the Intersectoral Platform for

Anticipation and Foresight, on 2 March 2009,

BSP/FOR (Foresight Programme) will organize adaylong workshop session on the The GlobalFinancial and Economic crisis its parameters

and potential impact on multilateralism

Workshop 2 March 2009


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Workshop - 2 March 2009

The Director-General will open the conference, at which several well-

known international experts will speak on the following four panelsubjects:

THEIMPACT OF THE GLOBAL FINANCIAL AND ECONOMIC CRISIS ONDEVELOPING COUNTRIES, IN PARTICULAR IN AFRICA, AND THE PROSPECTSFOR ATTAINING THE INTERNATIONALLY AGREED DEVELOPMENT GOALS,INCLUDING THE MDGs

INVESTING OUT OF THE CRISIS IN EDUCATION, SOCIAL SERVICES, SCIENCE

AND KNOWLEDGE THE POTENTIAL IMPACT OF THE GLOBAL FINANCIAL AND ECONOMIC CRISIS

ON WOMEN AND GENDER EQUALITY

WHAT IMPACT OF THE GLOBAL FINANCIAL AND ECONOMIC CRISIS ONCLIMATE CHANGE AND PROSPECTS FOR A GREEN ECONOMY?


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We will remain in the

eye of the storm Calm inside Heavy storm outside

Debris all around us

And then: what will be the fallout for us? How can we react and counter any

potential negative impact?

How can we anticipate the expectation ofMember States, the needs of developingcountries and proactively deliver?

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