April 22, 2002
The Center for Latin American Issues
The Monterrey Summit:
Achievements and Implications for the Americas
A panel discussion and luncheon to consider the
accomplishments of the
International Conference on Financing for Development, Monterrey, Mexico
Luncheon Keynote Speaker:
The Honorable John Maisto
Special Assistant to the President
and Senior Director for Western Hemisphere Affairs,
National Security Council
P A N E L I S T S
|Adolfo A. Franco
for Latin America and the Caribbean,
U.S. Agency for International Development
Principal Deputy Assistant Secretary of State for Economic and
Business Affairs, U.S. Department of State
|Lionel A. Hurst
of Antigua and Barbuda
to the Organization of American States
Deputy Chief of Mission
Embassy of Mexico to
the United States
Moderator: Mr. Euric Bobb
Chief of the Office of the Presidency,
Inter-American Development Bank
Some fifty heads of state and government leaders, as well as diplomats,
environmentalists, labor representatives, and NGO officials attended the
March 18-22 Monterrey Summit on Financing for Development at the
Inter-American Development Bank. A follow-up commitment to the UN’s
Millennium Summit in 2000, the Monterrey conference focused on official
development aid and other means of helping poor nations.
|The Monterrey Summit Colloquium panelists:
Ambassador Lionel A. Hurst,
Mr. Shaun Donnelly, Mr. Euric A. Bobb, Mr. Adolfo A. Franco, and
Minister Mario Chacón (seated left to right).
The U.S. view of the Monterrey Summit was given by Adolfo A. Franco,
Assistant Administrator for Latin America and the Caribbean of the U.S.
Agency for International Development, and by Shaun Donnelly,
Principal Deputy Assistant Secretary of State for Economic and Business
Affairs at the U.S. State Department. In a speech at the Inter-American
Development Bank on March 14, President Bush had called the fight against
poverty a moral imperative and made it a U.S. foreign policy priority.
Bush proposed a new compact for global development, which increases the
accountability of both the developed and the developing countries. The
president announced also that the U.S. will increase its core development
assistance by 50% over the next three years, a $5 billion annual increase
over current levels. These additional funds will be set aside in a new
Millennium Challenge Account that will fund programs for improving the
economies and the standards of living of developing countries.
Franco noted that one result of the Monterrey Summit was that the
industrialized countries have committed to increase their official
development assistance, provided that recipients foster the environment
necessary for the aid to be successful. Thus, financial aid will be linked
to sound policies. Franco outlined the commitments countries must
demonstrate in order to receive the funds. First, recipient countries must
have good governance, rooting out corruption, upholding human rights and
adhering to the rule of law, all of which are essential conditions for
successful development. Second, countries must promote the health and
education of their peoples, investing in schools, health care, and
immunization to provide for healthy, educated citizens who become agents
of development. Third, countries must follow sound economic policies that
foster enterprise and entrepreneurship, opening markets, adopting
sustainable budget policies, and supporting development to unleash the
enterprise and creativity of their peoples for lasting growth and
Franco stated also that private capital is the key to development. The
World Bank reports that countries that are integrated into the world
economy grow substantially faster than those that are not. Again, sound
policies are necessary: the evidence shows that where nations adopt sound
policies, a dollar of foreign aid attracts $2 of private investment.
Donnelly said that the U.S. is pleased with the results of the Monterrey
Summit, which laid a good basis for, and fits thematically with, upcoming
meetings on trade, health, agriculture and sustainable development, all of
which are intricately linked. A new vision of financial development
emerged from the Monterrey conference. The consensus does not focus merely
on development, but envisions a broader partnership in which all segments
of society – governments, the private sector, environmental groups, labor
unions, NGOs – will play a role in development.
Financial development has two sides. On the one hand, there is official
multilateral and bilateral aid. Both donors and recipients will have more
responsibility, the donors measuring success and results, and the
recipients providing good government, improving the health and education
of their citizens, and following sound macroeconomic policies. On the
other hand, exports, direct and portfolio investment, and remittances are
essential for economic development. Again, these development components
are contingent on sound economic policies.
For its part, the U.S., with its new Millennium Challenge Account, is
committed, among other things, to expand the fight against AIDS, to bring
computer instruction to young professionals in developing nations, to
assist African businesses and their people to sell goods abroad, to
provide textbooks and training to students in Islamic and African
countries, and to apply the power of science and technology to increase
harvests where hunger is greatest. The goal is to provide developing
nations the tools they need to seize the opportunities of the global
|Mr. Adolfo A. Franco (on the right), USAID, speaks on
the U.S.’s perspective of the outcomes of the Monterrey Summit Also
pictured, Mr. Euric Bobb, IDB.
||Mr. Shaun Donnelly, U.S. Department of State, explains
the new vision that resulted from the Summit.
Lionel A. Hurst, Permanent Representative of Antigua and Barbuda to
the White House and to the Organization of American States, discussed the
Monterrey Summit from the perspective of small countries. He noted that,
since 1992, inadequate resources have been committed to combating poverty.
Capital is to development what air is to health, and developing countries
must import large quantities of capital in order to grow. But,
unfortunately, most developing countries are net exporters of capital.
Thus, Monterrey was of great importance to the Caribbean countries because
of the increased resources that will be provided them. Hurst is pleased
that the U.S. has increased its financial aid contributions and that the
Monterrey Summit made special considerations for small states.
Hurst offered Antigua and Barbuda as an example of what can happen when a
developing country receives sufficient official assistance. Antigua and
Barbuda’s illiteracy has been eliminated; in the last three decades, its
per capita income has increased by 30 times, from $350 per capita per year
to nearly $10,000; and infant mortality is down to U.S. levels. Hurst
agues that Haiti is a continuing problem and that, if the country receives
the massive assistance it requires, it can experience the same positive
results as did Antigua and Barbuda.
In his closing remarks, Hurst emphasized the importance of energy. Energy
is to development what oxygen is to life itself. Some 200 million people
in the Americas earn less than $1 per day. Hurst argued that there are not
enough fossil fuels in the world to provide the energy needed to propel
200 million people out of poverty. Thus, if Monterrey is to deliver on its
goal to reduce poverty, enormous resources must be dedicated to finding
alternative energy sources.
|Ambassador Lionel A. Hurst, Antigua and Barbuda,
voices his concerns for the smaller nations of the region.
The Mexican government, the host of the Monterrey Summit, views the
conference as a tremendous achievement, said Mario Chacón, Deputy
Chief of Mission of the Mexican Embassy to the U.S. The Summit organizers
tried hard to avoid having a typical North-South confrontation at the
event. They attempted to foster an environment in which all parties could
work together to find common solutions. In this regard, the Summit was
A consensus emerged from the Monterrey Summit. For the first time, rich,
poor, and emerging countries accepted a rule of conduct. Recipients of
official aid must reform economically, socially, and politically. They
must follow the rule of law, fight corruption, and respect human rights,
as well as manage their budgets responsibly, fight inflation, and operate
with financial transparency. In addition to providing increased official
development assistance, donor countries must also help through trade,
avoiding subsidies and promoting direct investments in productive areas.
For Chacón, Monterrey is part of a process that must continue; especially
its emphasis on a country’s developing through self-reliance and making
better use of its own and others’ resources. Chacón cited Mexico as an
example of the success that can be achieved through sound policy and
self-reliance. In addition to its participation in NAFTA, Mexico has free
trade agreements with thirty-one countries. Mexico has also pursued tough
public finance policies, improving its tax collection and budgeting its
resources responsibly. Finally, the country continues to strengthen its
democratic institutions. Mexico’s free trade relationships, sound fiscal
policies, and democracy building have combined to foster growing
prosperity in the country.
Minister Mario Chacón,
his country’s concerns
At the luncheon that followed the morning panel discussion, Ambassador
John Maisto, Special Assistant to the President and Senior Director
for Western Hemisphere Affairs of the National Security Council, addressed
the issue of U.S.-Latin American relations in broad terms, with specific
reference to the Monterrey Summit. Following the presentation, there was
an extensive exchange of questions and answers. Per our agreement with
Amb. Maisto, his comments were off the record.
Ambassador John F. Maisto, National
Security Council, poses with Dr. James Ferrer, Jr., CLAI, after being
named a Fellow of the Center.