1 Monterrey Consensus on Financing for Development UN, February 15, 2008 Molly Pollack, Executive Director, ChileGlobal
Mar 26, 2015
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Monterrey Consensus on Financing for Development
UN, February 15, 2008Molly Pollack, Executive Director, ChileGlobal
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Challenges / Goals of Monterrey Consensus
• Goals: Eradicate poverty /Sustained economic growth/ inclusive global
economic system• How: Movilizing and increasing use of
financial resources through– New partnership /developed and developing
countries– Collaboration among all stakeholders– Each country responsible for its economic and
social development: important role of national policies
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And…
• Regional partnerships
• Financing for development should be:– Sustainable– Gender-sensitive– Development focused on people
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What has happened since the MC
• Improvement in macroeconomic and fiscal policies
• Increase in flow of private resources to developing countries, although may not be sustainable .
• International trade has recovered, but new forms of proteccionism emerged
• Official Development Assistance changed its negative trend
• Debt indicators have improved
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Critical comments on the Monterrey Consensus
• Growing power of transnational short-term capital flows instead of promoting long term investments
• The opening of markets could widen gap between rich and poor countries
• Underdeveloped countries have to compete on the global market with wealthy economies that can afford protectionism policies and subsidise their products
• Focus on “human development” is needed• Mechanisms to promote investments in low-income
countries should be implemented.
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Mobilizing international resources for development: FDI and other private flows
• Why FDI is good?
• Help to accelerate transfer of knowledge and technology
• Increase employment generation• Boost overall productivity• Enhance competitiveness and
entrepreneurship• As a result: poverty reduction and economic
growth
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What should stakeholders do?
»Countries• Improve investment climate (business friendly
environment)• Focus on human capital development • Promote public/ private partnerships
» International institutions• Increase support to infrastructure development• Support VC and other lending instruments, export
credits, etc.• Facilitate business contacts• Support public/ private initiatives
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What should business sector do?
• Business should be more socially responsible
– Social and gender sensitive gender– Consider environmental implications of their
undertakings (business culture)– Be transparent, reliable– Respect rules– More willing to networking
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Developments since Monterrey
• Insufficient political will slowed down the required reforms
• Current international economic conditions present the spectre of deflation, volatility in capital markets and exchange rates
• Large and increasing imbalances in the United States economy, and fluctuations in oil prices
• The Global Microcredit Summit’s goal of reaching 100 million poorest families.
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LAC after Monterrey
• Source: ECLA, on the basis of official figures as of April 2007
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Developments since Monterrey (2)
• Opening up to FDI and improved regulatory frameworks have not led to the magnitude of FDI inflows expected
• Still information on stocks of external assets and debt is especially limited.
• Some countries have not implemented parts of their macroeconomic and structural reform programmes
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LAC after Monterrey
• Source: ECLA, on the basis of official figures as of April 2007
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13• Source: ECLA, on the basis of official figures as of April 2007
LAC after Monterrey
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LAC after Monterrey
LATIN AMERICA AND THE CARIBBEAN: COUNTRY DISTRIBUTION OF FDI FLOWS,
BY RANGE, IN 2006:
• Source: UNCTAD, FDI/TNC database
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Total Factor Productivity Comparison by World Region
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Chile after Monterrey
• Introduction of MK1 and MK2 reforms that allowed the complete integration of the domestic stock exchange with the international market and facilitated the development of the Venture Capital Industry
• CORFO and ProChile become crucial in promoting Chilean exports and investments in Chile
• Chile’s attempts to join Financial Action Task Force (FATF)
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Chile After Monterrey
Country agenda coincides with the Consensus
Consensus goalEradicate poverty, achieve sustained economic growth and promote sustainable development as we advance to a fully inclusive and equitable economic system.
The Four Pillars of the Bachelet Government for Development1. Pension Plan Program Reform for All Workers2. Education Improvement3. Strengthening Innovation & Entrepreneurship – A Knowledge
Economy4. Better Infrastructure & Housing for All
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Innovation as a Key Issue for Development: Public-Private Partnership as the Means
– Creation of a National Council on Innovation for Competitiveness• Supra-ministerial
– Coordinates: Inter-ministerial – inter-agency
• Includes a select group of the highest representatives of the public, scientific, academia, and private sector.
• Mandate to develop a country innovation strategy beyond government
• Creative financing: Mining Royalty Fund• Key Cluster Agenda
– working with Chile’s competitive advantages
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Public-Private Partnerships for InnovationHow do we do it?
Fundación Chile Non-profit, privately owned corporation, created in
1976 by an agreement between the Chilean Government and ITT Corporation (USA). In 2005 BHP Billiton became a co founder.
Mission To increase the competitiveness of human resources
and productive sectors and services, by promoting and developing high impact innovations, technology transfer and management for the country.
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Working with Chile’s Key Sectors
Sectors
•Marine Resources•Agribusiness•Forestry•Human Capital•Environment•ICTs
Technologies
•Biotechnology•Environmental Technologies•Fine chemistry•ICTs•Financial engineering•Food technology
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The Outcome
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Measuring Impact: Developing Clusters
Fundación Chile Model = Innovation + Difussion Salmon Program
Industry ProductionYear Tons1983 3472005 383.000
US$ 1.725 M in exports for 2005 20,2% of Chile’s total food exports +35.000 direct and indirect jobs created
Source: (Informe Económico Salmonicultura 2005, SalmonChile)
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Exporting the Fundación Chile Model to Region
Mexico– Fundación Jalisco– Fundación Sonora
Peru– Fundación Perú
…networks + public-private partnerships + competitive advantages
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Networks+Public-Partnerships+Diasporas
• Expatriates played a crucial role in the acceleration of technological change, business creation and investment capital in countries such as Scotland, India, Taiwan, Ireland, Israel, China and others. – Pioneer investors – Helped attract foreign investment to countries of origin at times when
their nations were considered risky– Constitute bridges between residence and home countries for:
• Market connections• Technological transfer • Coaching of local business • Internationalization of local firms
• The acceleration of economic growth and development in Latin America requires a boost in its innovative capacity and an upgrade of the stock of qualified human resources of the region.
• An important pool of talent and human capital of the region is outside its national borders and is constituted by business Diasporas.
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Diaspora for Development:A Public-Private Partnership - ChileGlobal
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What is ChileGlobal?
An active international network of
Chilean business owners and high level
executives
· and those with an affinity for Chile ·
who are interested in contributing and
sharing the success of the Chilean
economy
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Objectives
• To help incorporate the country to the knowledge economy
• To create and promote a mechanism of technology transfer and knowledge exchange, in order to increase network opportunities, access international advice and knowledge for the benefit of Chile while accelerating innovation
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Sectoral Insertion of Members
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Developing an Investment Network
• A network that reaches the entire innovation chain from idea to business– Investing time, contacts, knowledge, and resources
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Spreading the Model: A Proposition for Multilateral Agencies and countries
• Creation of regional talent investment network– Private-public partnership– Innovation-based– Sector focused
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Conclusions and recommendations
• The Monterrey Consensus has played a fundamental role in the orientation of strategies and policies in the global context and part of the goals have been achieved
• The rapidly changing conditions and the experiences obtained make necessary to take these facts into consideration
• Multilateral organizations should promote and support new strategies and successful programs in a massive and regional manner
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Recommendations
• Next steps should be more micro than macro
– Focus on quality rather than in quantity (foreign investment)
– Learn from successful experiences (role of highly skilled diasporas)
– Promote actively public-private partnership, using role models (Fundacion Chile)
– Support strategies for entrepreneurship (VC)– Promote and support successful programs to
incentive entrepreneuship– Promote and support regional networks (ChileGlobal)
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Thank youwww.chileglobal.org