1. Robert Shelburne: Remittances
The Follow-up International Conference on Financing for Development: The ECE Perspective and the European Experience in Promoting Regional Development Robert C. Shelburne Senior Economist, Office of the Executive Secretary Economic Commission for Europe
Robert Shelburne: Remittances

2. The Doha Conference The Doha Outcome Document
Despite the tremendous difference in country viewpoints and needs, and the necessity for a global consensus, the Doha outcome is a quite substantive document
If the principles in it are fully implemented, more rapid progress in achieving sustainable and inclusive economic development is almost certain

3. European Integration and the Doha-Monterrey Principles
The Principles in Doha-Monterrey closely resemble the European regional approach to economic cooperation and development
Southern, Eastern enlargement of the EU was characterized by:
Rapid expansion of trade & investment due to liberalizations
Significant public financial & technical assistance
Fundamental redesign of the domestic economic, political, & legal institutions to make them development friendly
Evolving intergovernmental institutions to give proper political weight to new members and adjust activities to changing economic realities
Thus the principles that have been successful in promoting development & integration in Europe are the key pillars of the Monterrey Consensus
In Europe, however, these were all formally part of one comprehensive package and there was no cherry picking of a favorites
Thus Monterrey represents a proven framework; there is no reason to believe that if fully implemented globally it can not be equally successful

4. New Developmental Issues of Regional Significance for European Emerging Markets Since Monterrey
Importance of Remittances
Integrating Climate Change into Development Policy
The Financial Crisis and the European Development Model

5. Remittances Are Significant for the Transition Economies Remittances as a % of GDP Note: World Ave=0.6; Anything over 5% is Really Large

6. Robert Shelburne: Remittances
The Major Financial Inflows into the ECE-11: Remittances (13%) Dominate FDI (6%) and Aid (3%) All emerging economies:Remittances(1.5%),FDI (2.8%),Aid (.8%)
Remittances amounted to 13% of GDP while aid amounted to only 3% in 2006 (FDI=6% so tot=22%). In the Monterrey Consensus FfD document, the word remittances appears only once in one sentence while three pages or 1/6 of the document deals with ODA. More could be said about regulation of migration flows, protection of workers, lowering transfer costs, and using remittances to promotion development and poverty alleviation
For all EM aid+fdi+rem= =5%

7. New Issues Since Monterrey: Climate Change
The need to address climate change will fundamentally alter the development process & needs to be integrated into it at the earliest stages
The experience of European transition economies suggests that it is not efficient to develop first & then address environmental problems
Using the latest technology minimizes resource use, allows better integration into production sharing networks, improves public health, reduces environmental rehabilitation costs, increases export opportunities, lowers long-run adjustment costs, allows long-run planning for infrastructure needs and land-use policy
Climate change has not been given that much attention in the Doha document but the issue remains on the global agenda
The financial crisis must not be used as an excuse to delay addressing this issue

8. New Issues Since Monterrey: The Financial Crisis Especially Important for the ECE Region
It started in the US with its mortgage-backed securities backed by subprime loans: Extensive new regulations will be required
Western European banks owned a large slice of these assets and experienced large first round effects: Banking problems exposed the inadequacy of cross-border financial supervision
Eastern, Central and South-east Europe are emerging economies that will be especially hard hit given their development model which relies on extensive net external borrowing

9. The Financial Crisis and the Eastern European Development Model
One of the key objectives of the Monterrey Consensus was to create an international environment where developing countries could obtain additional net resources for development from private capital inflows
This would allow a country to investment and consume at higher levels than would be possible otherwise
This is in addition to the benefits of just getting FDI & having to export capital through international reserve accumulation, i.e., China or Russia when there is no net transfer
This requires running persistent current account deficits
Having an international monetary system that is able to transfer saving from advanced to developing economies is essential, yet this has proven time and again to be quite problematic

10. The Financial Crisis and the Eastern European Development Model, continued
Many emerging/developing countries have decided that despite the advantages of this, the current design of the international monetary system is such that it is too risky
The former transition economies were almost unique amongst emerging (as opposed to the least developed) economies in attempting to take advantage of net external capital inflows
The channel that facilitated this was often intra-bank capital inflows

11. World Current Accounts, 2008 Tan Surpluses, Green Deficits, Dark Green >5%

12. Projected Current Account Deficits in Emerging Europe

13. Current Accounts in Major Regions of Europe
SEU: Southern EU, NMS-12: EU new member States, SEE-7: South-east Europe, CIS5-European CIS, EEM-European Emerging

14. Long-term Debt in Emerging Europe: A Shift to Private Debt

15. Foreign Bank Ownership Is Quite High In Many European Emerging Markets

16. Foreign Bank Ownership: Does It Promote Stability or Contagion?
Source:EBRD

17. Financial Crisis and Eastern Europe: What Are The Implications?
The tightening of international credit markets will make financing current accounts quite difficult: significant slowdown and financial difficulties are likely
The extent of their difficulties will significantly determine how much the international monetary system will need to be reformed
One objective of Monterrey was to make the IFIs more growth oriented in crisis situations
So far, in IMF assistance to Eastern Europe, the IMF does seem to be placing more emphasis on maintaining growth instead of insisting on the rapid correction of imbalances
However, if this is to be the approach, more resources will be required:
Increased IMF funding
Bilateral currency swap agreements
Regional assistance such as EU-ECB aid to Hungary, or as the Chiang Mai Initiative will be required
ODA is needed more than ever, it should be considered as part of the globally needed fiscal expansion

18. Summary
Monterrey-Doha are substantive guidelines for promoting sustainable, inclusive development
They emphasize what has already proven to be a successful formula in Europe
From a European perspective, remittances, climate change, and improving the global financial architecture are of increasing importance