Financing development

Article by M. Charles Josselin, Minister Delegate for Cooperation and Francophony published in Le Monde newspaper

(12/4/2001)

 

ODA

"Come on France, just a bit more effort!" That's the exhortation of people who know that violence in the world is fuelled by growing inequality. It's mine too. So I salute the commitment of those who want to "put the pressure on". Nevertheless, I can't leave unchallenged the assertion in "Le Monde" of 21 November that French official development assistance (ODA) has dropped by one third under the Jospin government.

In fact it was between 1994 and 1998 that French ODA fell sharply, from 0.56% of GDP (excluding the Overseas Territories) to 0.34%. The Jospin government halted that trend, common to most of the developed countries. With 0.32% in 2000 and 0.33% predicted for 2001, France is the leading contributor in terms of percentage of GDP out of the seven major industrialized countries (G7). Her contribution is also well above the OECD average (0.22%), while the United States gives 0.1%.

Does that mean we should leave it at that? I don't think so. Indeed, the Council of European development ministers has mandated the Commission to work with each member State on a timetable for reaching the target of 0.7% of GDP. I have also stressed that as well as pursuing this objective we need both to increase the aid's effectiveness and search for new mechanisms linked to the concept of global public goods. So I am firmly convinced that we must follow two paths: actively seek new methods of providing aid and increase ODA.

As the World Bank and the bodies preparing for the Monterrey Conference on Financing for Development (March 2002) have noted, global aid will have to be doubled if mankind is to reach by 2015 the targets for reducing poverty adopted at the UN Millennium Assembly.

A purely quantitative approach, however, comes up against the problem of the recipient countries' absorption and aid implementation capacity. On its own it can't be enough, because to be legitimate the aid has to be effective.

GLOBALIZATION/GLOBAL PUBLIC GOODS

At the same time, we have to meet the current challenges posed by globalization and the emergence of issues of concern to both South and North to do with the provision of global public goods: health, knowledge, the environment, financial stability and security.

The government has contributed to creating new types of financial mechanisms to address these concerns: World Fund against AIDS, Tuberculosis and Malaria, to which the Prime Minister has announced that France will contribute EUR 150 million over three years; a substantial increase, by 2005, of our contribution to the World Environment Fund; an unprecedented effort to write off the debts of the poorest countries (HIPC initiative) which in 2000 the government decided was to be in addition to the aid already allocated. So France is going to make the highest contribution (EUR 10 billion for cancellation of eligible countries' debts) to help combat poverty, far more than the effort required at multilateral level.

But we must go beyond that. Realization of the need to ensure the existence of these world public goods calls for a proactive and innovatory response. The terrorist attacks of 11 September haven't reduced the legitimacy of the criticisms of globalization. On the contrary, they have strengthened our duty to address them.

INTERNATIONAL TAX

This is why the time has come to lay down the principle of an international tax, linked to a State's ability to contribute - and thus enabling contributions to be genuinely shared - designed to limit the excesses of globalization and finance provision of global public goods. Discussions have begun on the taxable base: speculative financial movements, carbon emissions (as Mr Zedillo and M. Delors are suggesting) and arms exports. We must make progress on this path, with a twin goal: to ensure greater stability and fairness in the world.

ODA

More ODA is nevertheless necessary. Initially, basing themselves on the convergent analyses of the World Bank and Zedillo Report, the OECD countries should at the very least double their global ODA effort, raising it from an average of 0.22% to O.44% of GDP, the first stage towards the goal of 0.7% which we are all committed to achieving.

Looking ahead to the Monterrey Conference, I think that the OECD countries should therefore set themselves a twin objective: to develop new forms of financing adapted to the challenges we are facing as a result of globalization and double their ODA effort, which for some countries involves a substantial effort, and for France means providing around an extra 1% of GDP - something she must agree to if she is to be true to her values and her vision of a more mutually-dependent, stable and fairer world, in short, one fit for everyone to live in./.