Developing countries express concerns about financial crisis’ impact on development cooperation

Final Press release

High-Level Symposium
Development Cooperation Forum (DCF)

World economic difficulties are not an excuse for reneging on development cooperation commitments – but much rather a reason to step up efforts to help the poorest countries and the most vulnerable populations– said participants in a two-day United Nations Symposium co-organized and hosted by the Government of Luxembourg to prepare for the United Nations Development Cooperation Forum (DCF).

The Luxembourg Symposium heard a powerful statement by the Finance Minister of Liberia expressing the commitment of Liberia to become aid free by the end of the next decade.

Along with Liberia, other developing countries expressed their country’s determination to develop and become independent from aid. “Aid is a “must” to bolster the efforts of developing countries to chart their own development course” said United Nations Assistant Secretary-General Thomas Stelzer.

While meeting aid commitments is critical, maximizing the impact of aid is equally important. The concept of “smart aid”, that leverages ODA to mobilize other forms of financial flows, was a central piece of the opening statement by the Minister for Development Cooperation and Humanitarian Affairs of Luxembourg.

Aid may impact on the Millennium Development Goals (MDGs) not only by supporting social programmes but also indirectly by catalyzing other sources of development finance, be it microfinance, fiscal revenues or investment, are two dimensions.

Participants said that, if aid is used to catalyze other sources of development finance, it must be ensured that such flows have maximum impact on the MDGs and the lives of poor and vulnerable people. There is no consistent evidence that Foreign Direct Investment (FDI) have a positive impact on poverty for example.

The Luxembourg Symposium stressed the importance of supporting the capacities of developing countries to deal with various financial flows to support their national development strategies.

It also underscored the role of the international community. Its responsibilities go beyond aid. Policies in the area of trade and investment for example too often undermine development cooperation goals.

The conclusions of the Luxembourg Symposium will serve as a basis for the debates at the UN Development Cooperation Forum in New York at the end of June 2012. They are also timely in light of the High-level forum on Aid Effectiveness which will be held in Busan in November-December 2011.

Some 150 representatives from governments, international and regional organizations, UN system, civil society, academia and the private sector attended the Luxembourg Symposium, which was opened by the Minister for Development Cooperation and Humanitarian Affairs of Luxembourg and the United Nations Deputy Secretary-General.

http://www.un.org/News/Press/docs//2011/dsgsm582.doc.htm (DSG's statement)
also include Luxembourg opening statement (pdf attached)