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Wednesday, February 18, 2004

Making Gloablisation Work For All
A conference organised by the UK Treasury, to discuss "Making Globalisation Work For All", has heard speeches by Bono, Gordon Brown MP ( Chancellor of the Exchequer), James Wolfensohn (President of the World Bank), President Luis Inacio Lula da Silva of Brazil, Hilary Benn MP (Secretary of State for International Development), Lord Carey (Former Archbishop of Canterbury) + Cardinal Cormac.

Key themes of the conference have included the need to broaden definitions of terrorism + failed states, and ensure that the Millennium Development Goals are adequately financed.

Interestingly, with the UK due to host the G8 and take over the Presidency of the EU in 2005, Gordon Brown is calling on rich countries to double their annual contributions to international development, and to help establish an International Finance Facility, which will work in the following way:

The Facility would be built on long-term donor commitments to make 'streams' of annual payments to the IFF, earmarked for specific countries.

The IFF would borrow against the security of this committed income stream by issuing bonds in the international capital markets.

Donors would be legally bound to make the payments to the IFF in each 'stream', subject to one or two high-level financing conditions related to the relevant recipient countries.

In this way, the IFF will deliver upfront resources over the next few years when it will have the most impact on achieving the targets.

And the IFF would not be an agency for disbursement. It would disburse funds through existing effective bilateral + multilateral mechanisms.

It would be a temporary finance facility. It would be in existence, raising and disbursing funds, for around 15 years with the repayment phase continuing for around a further 15 years after which the Facility would be wound up.

The IFF will build on existing agreements between developed and developing countries, with developing countries demonstrating that the money will achieve the results intended + developed countries making a commitment to provide long-term, predictable, untied and effective aid as investment to the countries that need it most.

At the recent World Economic Forum it was highlighted that the world is currently spending only one third of the resources that will be necessary in order to achieve the UN's Millennium Development Goals. Last weekend James Wolfensohn also said that the developed world should make trade rules fairer and that the amount spent globally on weapons rather than education + health was "madness", and "We're spending 20 times the amount on military expenditure than we're spending on trying to give homes to people."