[APWW-Meet] Financing for Development Review Process

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Women's Consultation on Financing for Development
Church Center, New York, June 16-17 2008


Formal Submission to the Financing for Development Review Process


Preamble

1. In 2002, heads of State and Government gathered in Monterrey, Mexico
and adopted a set of actions addressing the inter-connected challenges
of financing for development around the world, particularly in
developing countries. These agreements known as the Monterrey Consensus
had the aim of mobilizing increased and predictable resources toward
achieving the internationally agreed development goals, including the
Millennium Development Goals (MDG). The review of the Monterrey
Consensus takes place this year amidst evidence showing that women's
empowerment and welfare indicators are the weakest among the MDG
targets. Moreover, gender equality which is now widely regarded in
official circles as a cross-cutting issue suffers from a lack of
conceptual clarity and clear monitorable targets which exacerbates what
has been a persistent gap between official rhetoric and action.=20

2. Much more needs to happen to address the national, international and
systemic challenges of financing development spawned by an environment
of intensified and unregulated trade and financial liberalization
processes that often bear unpredictable negative consequences for
productivity, growth, employment, poverty eradication and income
distribution goals. The current financial, food and climate change
crises are stark realities in a volatile environment marked by confusing
market competition processes. A gender analysis raises further questions
on the connection of these trends and volatilities to (a) women's wages,
employment and unpaid labor, (b) state of social reproductive and social
protection capacities, resources and services, and (c) within-country
and within-household sharing of financial risks and shocks. Gender
inequality is embedded in asymmetrical social structures and systemic
processes that underpin the uneven spread of financial risks and
widening economic disparities which are experienced most acutely by
those most disadvantaged especially women. For example, empirical
evidence show that women in developing countries who work for very low
wages in the large informal sector also carry a disproportionate share
of financial risks as household finance managers in a context where
there is inadequate or non-existent publicly provided social welfare and
protection for the poor.=20

3. This set of proposals that substantively address women's
inter-linking concerns in the Monterrey Consensus was discussed and
adopted at a women's consultation meeting convened by the Women's
Working Group on Financing for Development in New York on June 16 and 17
2008. The women's consultation, attended by 50 women and men was
supported by UNIFEM and the Financing for Development Office in DESA as
well as benefited from intensive interaction and collaboration with the
larger Doha NGO Group of Networks, a process that enabled women's issues
and gender equality concerns to be recognized by a larger constituency.
Thus, our proposals align with but also enhance several key
recommendations found in the draft Civil Society Key Recommendations for
the Doha Draft Outcome Document.

Key Recommendations for Forward Actions

Chapter 1: Domestic Resource Mobilization

The Monterrey Consensus highlighted domestic resource mobilization, both
public and private, as the principal source of financing for
development. It called for an enabling national environment where
macroeconomic policies and regulatory frameworks that support growth,
employment, poverty eradication, redistribution, equality and human
development coexist in interaction with participatory and accountable
governance systems and processes. Central in this commitment is the
issue of domestic policy space and how the international institutional
environment supports or undermines the capacity of national governments
to achieve development.
1. Promote Participatory and Gender Responsive Budgets

The greater allocation of domestic resources toward gender equality is
critical to achieving MDG3 and signals a country's commitment to gender
equality and good governance through investments of their own resources.
The Monterrey Consensus had already stressed the critical need for
reinforcing national efforts in building capacity for gender budget
policies and practice while the 2005 High Level Dialogue emphasized that
domestic resource mobilization should encourage gender-responsive
budgeting to ensure that relevant commitments to gender equality,
poverty eradication and social welfare and protection are resourced. To
be efficient effective and accountable, Public Finance Management
systems and practices need to be supportive rather than undermining of
participatory and gender responsive budgeting.=20

Toward this end, resources should be allocated for the following:=20

(1)	training of government bureaucrats on the use of participatory
and gender responsive budgets;=20
(2)	collection and utilization of gender disaggregated data,
including time-use surveys that measure women's unpaid work and its
contribution to the national economy to make visible women's actual
economic contribution and gender-responsive poverty measure in the
National Accounts System (ECLAC Quito Consensus 2007); and=20
(3)	meaningful and regular participation of women's rights advocacy
groups and representatives of civil society in participatory and gender
responsive budget processes.=20

Gender budget practices may also be applied to the planning and
implementation of ODA funded projects and programs both on the part of
donor and recipient countries.

2. Strengthen the national commitment to and enforcement of Decent Work

National enforcement of policies and regulation that promote decent work
is a strategy that simultaneously responds to poverty reduction, gender
equality and equitable growth. It promotes good governance and the rule
of law by ensuring that the rights of a large majority of citizens
(workers) such as their right to a living wage and collective bargaining
processes are protected by law. Related to this, we welcome a recent
report that criticized the World Bank's Annual Doing Business Report
which ranks countries on whether or not they have a favorable business
environment, and that gives low rankings to countries attempting to
promote the decent work principles.

Policies to create decent work should fully account for rapid changes in
labor markets and opportunities as governments begin to put in place the
necessary adjustments toward a properly sequenced and managed trade
liberalization that enhances rather than weaken domestic productive
capacity. Efforts are needed to immediately reach the large numbers of
women in Export Processing Zones and in informal work.

We recommend special attention be given to women workers in the
following aspects:

(1)	need for quality jobs for women workers=20
(2)	training that improves women's options across different sectors
of the labor market
(3)	access to finance for women entrepreneurs, especially in small
and medium enterprises
(4)	provision of health insurance including access to reproductive
health care services
(5)	provision of maternity benefits and access to affordable child
care, and
(6)	protecting the rights of women workers to self-organization and
self-representation in social dialogues

3. Utilize progressive and fair taxation schemes including tax rebates
and tax relief for the poor and women

Progressive tax regimes can optimize revenues, while easing the income
disparities that have marked growth in many countries (UNIFEM 2007). In
this light we support progressive fair and efficient taxation, including
taxation of transnational corporations, addressing more forcefully the
problem of tax evasion and tax havens, and strengthening world-wide tax
cooperation and setting up an International Tax Organization, all of
which have been proposed and endorsed widely by CSOs and citizens'
groups.=20

In addition, we recommend the following additional tax measures:

(1)	tax rebates to women in recognition of their contribution to the
society, their historical discrimination in land ownership as well as
their unequal sharing of family responsibilities
(2)	tax relief for the poor and for single household heads a
majority of whom are women who either care for the very old or the very
young

Chapter 2: Foreign Direct Investments and Private Capital Flows

The Monterrey Consensus for the most part valorized the increase in the
volume of private and public capital flows to developing countries, the
changing composition and the differentiated impacts of various kinds of
capital flows, as well as, their changing geography. While largely
recognizing the opportunities for financing development from these kinds
of flows, governments also acknowledged in a preliminary and generalized
way the need to "mitigate the impact of excessive volatility of
short-term capital flows are important and must be considered. Given
each country's varying degree of national capacity, managing national
external debt profiles, paying careful attention to currency and
liquidity risk, strengthening prudential regulations and supervision of
all financial institutions, including highly leveraged institutions,
liberalizing capital flows in an orderly and well sequenced process
consistent with development objectives, and implementation, on a
progressive and voluntary basis, of codes and standards agreed
internationally...." (Monterrey Consensus, para 25).=20

We join in the effort by our colleagues in civil society in putting
forward the call for a multilateral mechanism that would subject
investors and transnational corporations to more lawfully binding norms
and standards. In the meantime, investor behavior continues to pose
problems to developing country governments that have difficulty dealing
with the effects of wage competition and the global tax race to the
bottom. In a situation of liberalized financial markets that continue to
exhibit tendencies toward crisis, these governments need to deal with an
increasingly riskier environment as they seek opportunities for sourcing
finances for development through private capital flows while ensuring
stability of growth for their economies.

Given the current context of yet another financial crisis, the time to
act is now. The present financial turmoil showed that existing national
regulatory mechanisms even within developed countries as well as
international economic surveillance and information exchange systems are
inadequate and unable to respond to the increased emergent risk-taking
practices of banks and other non-bank financial institutions and to the
growing speculative behavior of investors and traders in an environment
of increasing volatility and risks. Financial crises have employment and
earnings effects, as well as indirect effects on welfare and poverty
reduction that ultimately reach women and men differentially, with women
who are care providers often taking on the burden of risk sharing and
adjustment in the household.=20

In the spirit of supporting the call for binding norms for transnational
corporations in the United Nations, we propose the joint
recommendations, as follows:=20

1. Convene within the United Nations and at the soonest possible time,
an inter-governmental meeting addressed to how governments can
efficiently and in an effective way manage their competition for FDI and
other capital flows

2. Strengthen at the national sphere the rule of law and citizen's
access to information and the legal system in order to compel investors
and traders to behave as "good citizens".


Chapter 3: Trade

The framework of rapid and intensified trade liberalization that is
espoused by the World Trade Organization and which is driving some
regional and bilateral free trade agreements has been criticized for its
anti-development elements. Trade is not an end in itself - it must serve
pro-people and inclusive development, the realization of human rights
and the right to development for all, and the achievement of a caring
economy and environmental sustainability. A gender perspective of trade
is a holistic one, supportive of the broader framework of international
conventions and multilateral commitment for the common good.=20

Trade affects gender equality through employment and income
opportunities or losses, as well as shifts in the costs of basic goods
and services. There is as yet no mechanism to monitor the extent to
which current trade policies have worked to reduce gender inequalities,
but trade liberalization, which is normally accompanied by lower revenue
collection from tariffs, can slow investments in public services and
shift tax burdens towards labor in ways that limit women's productivity.
Some industries favored by trade improve women's employment prospects as
a general principle, but others, including some high-tech sectors that
offer better wages, may not benefit women because of persistent gender
biases that reduce women's chances of cultivating appropriate skills.
This is seen in the widely criticized practice of export oriented
industries of regarding women as low-cost inputs into production (UNIFEM
2007).

1. Actively apply special and differential treatment and less-than-full
reciprocity as principles for trade negotiations.

In the current trade liberalization climate, countries are unable to
protect their industries some of which had traditionally produced
incomes and supplied affordable basic services for women. Particularly
in the area of food and agriculture, women are the majority producers of
the world's staple crops. As small producers, they lack access to land,
markets, credit, and other inputs. This could be remedied through
targeted domestic support for small producers.

As countries grow in their ability to integrate into the global economy,
the international environment must support their newly emerging
capacities. All international trade agreements should make allowances
for countries to address varying national development circumstances.
Policy options might include the identification of specific industries
for support; the encouragement of foreign direct investment that
supports development targets; some amount of trade protection through
reasonable tariffs and related measures that help domestic producers
develop their capacities; and the upgrading of skills and technology so
that a country's competitive advantage is not based solely on low-cost
labor and other inputs, but also on technological and human development
(UNIFEM 2007).=20

2. Support and strengthen women's meaningful involvement in
multi-stakeholder oversight processes and mechanisms related to trade
agreements and reforms at all levels.

Women are consistently not involved in a meaningful way in trade
negotiations processes nor is a gender perspective included in the
analysis and understanding of the potential impacts of trade agreements
and trade-related adjustments. Civil society and parliamentary oversight
must be incorporated into regular trade impact reviews at all levels o
that there could be monitoring of the social and gender impacts of
trade. The effort to draw up a list of indicators that are sensitive to
uncovering contradictions in relation to social targets and commitments
in trade must also be funded and supported.=20

Chapter 4: International Financial and Technical Cooperation

Although the overall share of ODA in the financing landscape is smaller
than private financial flows and trade, in poorer countries, ODA is
essential for achieving the internationally agreed development goals,
the MDGs included. There is recognition that aid flows are highly
volatile and threatens the continuity of development programs, for
instance, on gender equality. It is in this light that we welcome the
emergence of South-South Cooperation and other innovative sources of
financing for development.

Recognizing that donors allocate ODA when they fund specific projects,
and recipient governments determine the allocation of donor financing
given as direct budgetary support or sector support, we recommend to:

1. Ensure additionality and predictability of aid flows

Women worldwide are the most affected by poverty and structural
adjustment programs, with the privatization of education and health
services and of other resources & services essential to social
reproduction having a more severe impact on women. Projects that support
women's empowerment suffer a shortage of funds and must be strengthened
if progress is to be made. Moreover, gender and social transformation
takes place over a long period of time and must receive sustained
support to become possible. This is true not only of developing
countries where aid flows are highly concentrated in but also of certain
sectors and regions within middle income countries which must also be
reached by traditional and new donors.

With this in sight, donor governments must immediately meet its pledge
of 0.7% of their GNP as official development assistance to developing
countries. In addition, donors and recipients should scale up the share
of ODA for gender equality and women's empowerment to reach 10% by 2010
and 20% by 2015, ensuring that there are year-to-year increases by some
agreed upon level. They should avoid ODA distorting practices such as
inflating their ODA statistics by arbitrarily including various types of
costs or shuffling funds from an old to a new item without any real
topping up of finances or counting debt relief as part of ODA.
=20
As well, the increase in ODA should not lead to a cycle of debt for the
recipient country. Rather the major increase in ODA should be felt in
the grants component of aid rather than in the loan component.

2. Remove conditionalities and strengthen mutual responsibility,
accountability and transparency of donors and recipient countries

ODA must not be used to exercise power over recipient countries through
the use among others of conditionalities. Neither should ODA be linked
to trade negotiations. Instead, ODA must be used to develop the capacity
of the recipient country's economy to generate and mobilize its own
resources, to promote development while reducing structural inequalities
including gender inequality. In short, ODA should be a contribution that
truly supports national economic and social development within a
framework of a vibrant and robust democratic society and transparent and
accountable governments propelled by their own empowered political
actors.

To ensure that the benefits of additional financing benefit gender
equality, social justice, and inclusion, ODA processes must uphold the
mutual responsibility and obligations of governments to fulfill the
internationally agreed development norms, goals, targets and actions
which have been identified in the Beijing Platform for Action,
Convention on the Elimination of All Forms of Discrimination Against
Women, International Convention on Population and Development, Education
For All, among others, without resorting to impositions and
conditionalities within the narrow framework of aid giving.=20

Mutual accountability should ensure equal partnership between donors and
recipients and facilitate governments of both donor and recipient
countries to be accountable to various publics, women included.
Negotiations on ODA must country-driven rather than donor-driven, and
should be democratic and inclusive in its processes and practices, as
well as, subject to a multilateral and multi-stakeholder review forum
such as the ECOSOC's Development Cooperation Forum.

3. Develop gender-sensitive indicators, tools and methodologies for the
evaluation of the quality and development effectiveness of aid=20

In support of mutual responsibility and accountability for gender
equality on the part of both donors and recipients, monitoring and
evaluative tools and methodologies need to be developed to assess the
extent to which aid allocations address  or do not address the
achievement of redistributive, social and gender goals. The
categorization of gender, along with human rights and environmental
sustainability, as cross cutting issues have led to difficulty in
tracking outcomes within basket funds and sector-wide programming. The
development of gender-informed tools and methodologies must be carried
out in a participatory process and should involve both traditional and
emerging donors and across several aid modalities. Moreover such
exercise should take place across all levels, with resources being
allocated to enable women's rights advocates meaningfully participate in
national, regional and international processes. The United Nations
system in particular its various agencies and entities charged with the
promotion of women's rights and gender equality must be the location of
this process at the multilateral sphere.

Chapter 5: Debt

The inclusion of debt into the Monterrey Consensus provided an
opportunity for the international community to commit to new principles
related to the long-time problem of debt burden among developing
countries. Nevertheless, the concrete agreements centered on a limited
debt write-off mechanisms through the HIPC whose underlying weakness may
be found in the unbalanced emphasis on financing and on required policy
conditionalities rather than on the development dimension of external
debt.

1. Undertake a more critical round of review and redefinition of the
Debt Sustainability Framework that should involve not only national
governments but also civil society including women's rights
organizations=20

Current strategies for debt relief are only oriented to resolve fiscal
and financial and not development problems.  Most countries are still
suffering from the huge burden of debts and the impact of losing much
needed resources to debt service. There is an urgent need to expand and
deepen debt cancellation to cover not only low income countries and
middle income countries burdened with debt. The revised Debt
Sustainability Framework must be a framework that gives centrality to
human development goals and human rights, which includes gender equality
and women's empowerment.

2. Loans and debt cancellation must be de-linked from conditionalities

Policy conditionalities that have accompanied loans as well as debt
cancellation programs (ex HIPC) have had  negative effects on women, the
poor and marginalized, livelihoods and economies, and on the
environment.  The impacts of these conditionalities negate the positive
outcomes of debt cancellation.

Donors must not unilaterally determine where to use funds freed from
debt cancellation, such as, for instance, to support gender equality
programs. A transparent, accountable and democratic process of deciding
on where to utilize the funds must include in-country CSOs throughout
the whole process, women's rights organizations included. Such a
process, at the same time, obligates financial transactions to recognize
and uphold the mutual responsibility and obligations of governments to
protect human rights, ensure gender equality and women's empowerment,
and promote environmental sustainability.=20

3. In the UN, a political dialogue must be initiated to deal with the
question of odious / illegitimate debts.

There is growing recognition of the problem of odious and illegitimate
debt, the shared responsibility of lenders and borrowers in the
emergence and perpetuation of this problem, and the justness of the call
to cancel odious and illegitimate debts. Norway has led the way when it
cancelled debt that it recognized as illegitimate. This had been
followed by other initiatives such as the World Bank Roundtable and UNDP
discussions on illegitimate debt as well as UNCTAD's paper on
illegitimate debt.=20

Comprehensive country debt audits are encouraged to address among others
the question of illegitimacy of debt.  There is also need to develop a
common platform for Principled and Responsible Financing to be upheld by
both lenders and borrowers.

Chapter 6: Systemic Issues

Gender disparities reflect and are related to the structural imbalances
in the global economic system, which are expressed as the development
gaps between North and South, the marginalization of groups of peoples
from core growth processes and their low levels of participation and
decision-making in global economic governance. Addressing these
inequities is an important step towards responding to the needs of
people, women and men, on the ground.

The framework for enhancing the coherence and consistency of the
international monetary, financial and trading systems in support of
development requires a commitment to bringing into the rubric of the
United Nations entities such as the Basel Committee where developing
countries are not represented but whose actions and decisions have an
impact on financial markets, as well as, to prioritizing the promotion
of social objectives and policies over narrow financial objectives. =20

Toward this end, we recommend:

1. Continue to ensure that FFD follow-up mechanisms, consultative
processes, and opportunities for technical inputs in all of its
multi-stakeholder arenas are effective spaces for consistent and regular
inputs on gender equality by women's rights organizations and networks
and gender equality experts. =20

Global instability and financial crises have a disproportionately
negative impact on women, hence, the need to prevent and manage the
occurrence of crises informed by gender analysis. The FFD's
multi-stakeholder approach is uniquely situated to bring in women's
organizations and networks and gender experts for the identification of
innovative policy approaches and solutions that explicitly address the
gender dimensions of macroeconomic and exchange rate coordination
(especially of large economies), the development of financial codes and
standards, and the regulation of private sector activities. Discussions
can also include exploration and development of mechanisms to
collectively provide resources for programs and institutions (including
national women's machineries) that meet social objectives and gender
equality.=20

Strengthening the institutional links and arrangements within the UN
system to support women and women's organizations in all levels of
planning, monitoring and evaluation of development processes at the
national and international settings is needed to bolster the
implementation of commitments under the Monterrey Consensus (para. 4 and
para. 64). Coherence and consistency is also needed between the
Monterrey Consensus and the Beijing Platform for Action.

The FFD's multi-stakeholder approach and strong participation from civil
society including women's rights organizations and networks may be
replicated elsewhere in the UN system. For instance, the Development
Cooperation Forum which is a multi-stakeholder platform with a more
flexible agenda may be used for more frequent information exchange on
best practices and dialogue for peer learning and that can provide the
boost for the exploration of new approaches on participatory and
gender-sensitive international, regional, and national economic
governance mechanisms.

As such, all UN entities on gender equality and women's empowerment
should strengthen their capacity to link with issues and areas not
traditionally identified with gender equality. Efforts should not remain
small and sporadic. This will open up new thinking and strategies on
promoting gender equality and women's empowerment in the context of
building new consensuses around development and global governance within
the United Nations system.

Chapter 7: Emerging Issues

1. Financing to address the food and climate crises should not be in the
form of loans.=20

The food energy and climate crises render peoples of the South, and
women who dominate the food sector, more vulnerable to the accumulation
of new loans. Governments should not offer or enter into loan-financing
for seed purchases and similar food and agriculture programs, or
loan-financing of climate mitigation and adaptation mechanisms.

Staying Engaged for Gender Equality
=20
The Women's Working Group on the FfD commits itself to keep fully
engaged in all follow-up processes and to build bridges between
commitments and actions on development, trade, finance, debt and
systemic issues and women's rights and gender equality commitment and
goals which are consistent with the holistic agenda of the Monterrey
Consensus. Engendering the financing for development process cannot be
realized without a holistic approach that looks at the inter-connections
among trade and finance in all its different form - aid, investment,
debt and domestic savings.





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