Irrelevant or Indispensable?: The United Nations in the Twenty-first Century

6. The Monterrey Consensus: Developing the Policy Innovations

The International Conference on Finance for Development, hosted by Mexico at Monterrey in March 2002, came after nearly two decades of contention between the North and the South on macroeconomic issues in the UN and elsewhere.1 Ever since President Ronald Reagan delivered his stark message at the North-South Summit held at Cancun, Mexico, in 1981, the developed world did not see global finance as a matter for North-South negotiation. The change came from three things—the consciousness of interdependence created by the financial crises of 1997–98, the strong support from several donor countries for the Millennium Development Goals (MDGs) and the concerns about alienation that came with the terrorist attacks of 11 September 2001. The Monterrey Consensus was reached because the UN managed to put together a credible process that used the political space created by these events. Donor support for aid and other concessions has never rested on any deep commitment to the UN Charter. It was a product of strategic competition for influence in the Cold War, a spillover of colonial commitments in a few cases and, in some countries, an extension of welfare state values to the global sphere. That is why the bulk of aid and debt relief was delivered bilaterally rather than through the multilateral system. Even among the multilaterals, there was a strong preference for the international financial institutions (IFIs) whose voting structure gave donors effective control. The classical motivations for development cooperation are not as relevant now. Colonial responsibilities are now largely forgotten, except perhaps in the European Union (EU)-Africa relationship, and the welfare state is in retreat even domestically. The Cold War is over, though nitin desai 6 THE MONTERREY CONSENSUS developing the policy innovations 43 the changing vectors of geo-strategic competition could stimulate the entry of new donors and new motivations. The heightened concern about terrorism after the 11 September 2001 attacks has also introduced a new interest in the links between development and security. The United Nations played a major role in averting the threatened collapse of development cooperation in the early nineties with a series of path-breaking conferences. The core of the agreements reached in these conferences was captured in the MDGs,2 which were crisp enough to cope with the attention deficit disorder on development issues in the media and the higher reaches of government. The impact of the conferences and the goals can be seen in the changing agenda of the G-7/8 meetings, in the growing willingness of the World Bank and the International Monetary Fund (IMF) to align themselves with the UN, and even in the Davos Forum. Thus the UN has helped to define a New Consensus on Development—a set of goals and policy approaches that all countries accept as a basis for international cooperation and national action. The outcome of the Monterrey Conference has to be seen as a part of this New Consensus. Implementing the new consensus will require substantial changes in the way in which development cooperation is managed. In what follows, the tasks ahead are dealt with from the perspective of the Monterrey outcome, under five broad heads: • Maintaining the agreement on goals • Mobilizing international resources • Managing the North-South partnership • Securing coherence • Reforming global economic governance maintaining the agreement on goals The goals of development cooperation are now largely defined by the outcome of the UN conferences of the 1990s. These were essentially an attempt to provide a new type of rationale for development cooperation as a substitute for the old Cold War logic. They defined a substantive agenda for development, a shared understanding of the elements of good policy in a variety of areas like environmental management, poverty eradication, employment generation, social inclusion, education , health, gender equality, women’s rights, and human settlements. They involved both national commitments and a promise of international support. In effect the case for aid, debt relief, and trade conces44 nitin desai sions now rested on the role they could play in attaining globally agreed ends. The development goals enshrined in the Millennium Declaration are a product of these conferences. They were supplemented by the outcome of the Johannesburg summit on sustainable development.3 They represent the most explicit global consensus on the goals of development that we have ever had. They provide a substantive basis for development cooperation shared not just by donors but by the recipients as well. A large...