Monterrey Consensus on Financing for Development UN February

Monterrey Consensus on Financing for Development UN, February 15, 2008 Molly Pollack, Executive Director, Chile. Global 1

Haga clic para cambiar / Goals of Monterrey Challenges el estilo de títu 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 2

Haga clic para cambiar el estilo de títu And… • Regional partnerships • Financing for development should be: – Sustainable – Gender-sensitive – Development focused on people 3

Haga clic para cambiar el estilo de títu 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 4

Haga clic para cambiar el estilo de. Monterrey títu Critical comments on the 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. 5

Mobilizing international resources Haga clic para cambiar el estilo de títu 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 6

Haga clic para cambiar el estilo de títu 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 7

Haga clic para cambiar el estilo de títu 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 8

Haga clic para cambiar el estilo de títu 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. 9

Haga clic para cambiar el estilo de títu LAC after Monterrey • Source: ECLA, on the basis of official figures as of April 2007 10

Haga clic para cambiar el estilo de títu 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 11

Haga clic para cambiar el estilo de títu LAC after Monterrey • Source: ECLA, on the basis of official figures as of April 2007 12

Haga clic para cambiar el estilo de títu LAC after Monterrey • Source: ECLA, on the basis of official figures as of April 2007 13

Haga clic para cambiar el estilo de títu LAC after Monterrey LATIN AMERICA AND THE CARIBBEAN: COUNTRY DISTRIBUTION OF FDI FLOWS, BY RANGE, IN 2006: • Source: UNCTAD, FDI/TNC database 14

Haga clic para cambiar el estilo de títu Total Factor Productivity Comparison by World Region 15

Haga clic para cambiar el estilo de títu Chile after Monterrey • Introduction of MK 1 and MK 2 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 Pro. Chile become crucial in promoting Chilean exports and investments in Chile • Chile’s attempts to join Financial Action Task Force (FATF) 16

Haga clic para cambiar el estilo de títu Chile After Monterrey Country agenda coincides with the Consensus goal Eradicate poverty, achieve sustained economic growth and promote sustainable development as we advance to a fully inclusive and equitable economic system. The 1. 2. 3. 4. Four Pillars of the Bachelet Government for Development Pension Plan Program Reform for All Workers Education Improvement Strengthening Innovation & Entrepreneurship – A Knowledge Economy Better Infrastructure & Housing for All 17

Haga clic para cambiar el. Key Issue for Development: Innovation as a estilo de títu 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 18

Haga clic para cambiar el estilo de títu Innovation Public-Private Partnerships for How 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. 19

Haga clic para cambiar el estilo de títu Working with Chile’s Key Sectors • Marine Resources • Agribusiness • Forestry • Human Capital • Environment • ICTs Technologies • Biotechnology • Environmental Technologies • Fine chemistry • ICTs • Financial engineering • Food technology 20

Haga clic para cambiar el estilo de títu The Outcome 21

Haga clic para cambiar el estilo de títu Measuring Impact: Developing Clusters Fundación Chile Model = Innovation + Difussion Salmon Program Industry Production Year Tons 1983 347 2005 383. 000 ü US$ 1. 725 M in exports for 2005 ü 20, 2% of Chile’s total food exports ü +35. 000 direct and indirect jobs created Source: (Informe Económico Salmonicultura 2005, Salmon. Chile) 22

Haga clic para cambiar el estilo de títu Exporting the Fundación Chile Model to Region Mexico – Fundación Jalisco – Fundación Sonora Peru – Fundación Perú …networks + public-private partnerships + competitive advantages 23

Haga clic para cambiar el estilo de títu 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. 24

Haga clic para cambiar. Development: títu Diaspora for el estilo de A Public-Private Partnership - Chile. Global 25

Haga clic para cambiar el estilo de títu What is Chile. Global? 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 26

Haga clic para cambiar el estilo de títu 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 27

Haga clic para cambiar el estilo de títu Sectoral Insertion of Members 28

Haga clic para cambiar el estilo de títu Developing an Investment Network • A network that reaches the entire innovation chain from idea to business – Investing time, contacts, knowledge, and resources 29

Spreading the Model: Haga clic para cambiar el estilo de títu A Proposition for Multilateral Agencies and countries • Creation of regional talent investment network – Private-public partnership – Innovation-based – Sector focused 30

Haga clic para cambiar el estilo de títu 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 31

Haga clic para cambiar el estilo de títu 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 (Chile. Global) 32

Thank you www. chileglobal. org 33