Equity and Justice Working Group Second UN Conference on Development Financing Review the progress Monterrey to Doha

Overview on first UN Conference on Development Financing Monterrey consensus: Following decisions have undertaken in 2002 global summit, - Domestic resource mobilization and supply - Foreign Direct Investment - Trade and Debt - Finance and Technical Support International financing, development financing, trade structure will be considered as in interlinking process.

Overview on first UN conference on Development Financing Virtually the Monterrey consensus was ambigious. Because the developed countries, - Didn’t give their specific commitment to increase the development assistance as mandatory. - No specific declaration was given for debt cancellation of poor countries. - Didn’t gave any commitment about international financial governance, financial support to poor countries and other structural reform etc.

The trend of development Financing during 2002 to The EU government has given a commitment in 2005 that, the ODA will be 0.7% of there GNI by Paris declaration on “aid effectiveness” -Harmonization, country ownership, managing for results and mutual accountability of the development financing in developing and least development countries. -Review of Accra in 2008 has hardly produce any tangible committeement.

An overview of Doha conference on development Financing Objectives of this conference: -Take necessary steps to achieve the Millennium Development Goals (MDG) declared by the UN. - Review the first conference on development financing in Monterrey.

Bangladesh: An overview in achieving the MDGs -Bangladesh is one of the poorest country where near 1100 people living per square kilometer and per capita income is US$500. -Child mortality rate is 74/1000 live birth and will take time at least 2022 to achieve the target based on existing rate of progress. - Maternal mortality rate is 365/ and will take time at least 2028 to achieve the target based on existing rate of progress. -Poverty rate is increasing which makes the uncertain situation in achieving the MDGs target.

Bangladesh: An overview in achieving the MDGs - There are 2.5 million families have gone down the poverty line recently due to price hike of food and fuel and natural disaster. Overview of national budget The development budget has been reduced at BDT 9000 million comparing the fiscal year Revenue expenditure has been 300% of development budget. - Debt servicing cost is of total national budget -Due to the increasing nature of debt servicing, increasing amount of budget to the safety net, and also the increasing nature of revenue budget, allocation in human development budget is being decreasing.

National Budget:

Achieving the MDGs: Under development and poverty reproduction Causes of poverty Reproduction: - Poor countries like Bangladesh have been forced to implement the donors prescription of development policy like PRSP where market liberalization, import liberalization, commercialization / privatization of public services etc. - Unplanned use and repatriated the natural resources by multinational companies under the name of so called foreign direct investment. - Irresponsible implementation / financing of development (e.g. Jamuna Bridge, Khulna Jessore Drainage Rehabilitation Project-KJDRP) by the donors, causing suffering and also loses of national resources.

Achieving the MDGs: Under development and poverty reproduction Result of 1st PRSP Implemented of IMF, WB’s conditions: - Emphasized contractionary monetary policy - Implementation of structural Adjustment Policy - Government has denationalized the State Owned Enterprises. - Import liberalization is done and import tax has been from 300%. Implementation of fiscal policies: - Broadening the tax base and also planned to bring the agriculture under tax net - Government has decreased her budgetary allocation in service sectors like health, education and also promoting the private sector investment in those sectors.

Achieving the MDGs: Under development and poverty reproduction The proposed development policy in second PRSP ( ) Policy Matrix-01: Macro Economic Management Policy Issues: - Government has to keep the budget deficit within a level of 5% of GDP. - Debt liability of the government shall not exceed 60% of GDP and outstanding of external debt shall not exceed 40% of GDP.

Achieving the MDGs: Under development and poverty reproduction Our concern: - The 2 nd PRSP didn’t specify the issue on what will be the exact monetary policy to be follow by government. This important policy issue has cautiously avoided and given a scope to donors (IMF, WB) the unexpected intervention of controlling our policy. - Adopting the policy of external debt stock provides the legality to government to borrow the external loan from donors. Because the 2 nd PRSP didn’t clear the government borrowing strategy for expected development outcome. - This Macro economic management policy ultimately impacted the increasing of budget deficit and also unimplemented the pro poor issues as previous.

Achieving the MDGs: Decreasing trend of ODA

-Official Development Assistance has been 33% in comparing with the level of 1999 in Bangladesh. -Government borrowing trend is increasing and it has proposed in second PRSP to government borrowing up to 60% of GDP. - To achieve the MDGs target in Bangladesh needs 7.5 billion US$ where she gets only 1.5 billion $ yearly. Achieving the MDGs: Decreasing trend of ODA

-At present Bangladesh government has to expense at least 18% of its revenue budget as debt servicing cost. - Debt servicing cost and expenses will be increased more if government follow the second PRSP target of borrowing the loan as 60% of GDP. But - Bangladesh didn’t considered for debt cancellation by donors for her existing level of debt to export ratio (as defined by World Bank and IMF) Achieving the MDGs: Debt Cancellation

Why Bangladesh demands her debt cancellation and increase of Official Development Assistance ? - Historically Bangladesh is exploited - Bangladesh is exploited and repatriated the resources through set up of British colonial regime during last 250 years. - Our country is still paying 1.5 US$ to rich countries in against of 1$ ODA. Achieving the MDGs: Debt Cancellation

Why Bangladesh demands her debt cancellation and increase of Official Development Assistance ? Achieving the MDGs: Debt Cancellation Climate Change and Disaster risk ! Bangladesh will be a worst victim of Climate Change and natural disaster impact e.g. -By 2050 Agriculture production will be decreased at least 30% from present status. -If sea level rise due to climate change there are 15-17% of coastal area will be inundated and near about 22 million of people will turn as homeless and environmental refugee. - Due to cyclone SIDR Bangladesh had to face a loss of 1.7 billion US$ according donors assessment but received only 350 million $ which is only 20% of total damage.

What’s Bangladesh expectation from Doha conference ? Achieving the MDGs: Debt Cancellation -Bangladesh will be considered as HIPC and There should be a declaration of debt cancellation by donors. - Bangladesh will be compensated by rich countries due to their role of carbon emission and climate changing activities. -Bangladesh will demand the reparation along with audit on the resources those were repatriated historically by colonial regime. -Reform and reconstruction of IMF, WB through a participatory and democratic process. All development finance and official assistance would be based on equity and justice, but not will be a pressurized or any conditinalities.

So this is time for not only for Climate Justice and it is also time for Reparation and Debt Cancellation

Thank You All