Monterrey Consensus on
Financing for Development
UN, February 15, 2008
Molly Pollack, Executive Director, ChileGlobal
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Challenges
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
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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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LAC after Monterrey
•
Source: ECLA, on the basis of official figures as of April 2007
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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
FactorelProductivity
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 goal
Eradicate 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 Development
1. Pension Plan Program Reform for All Workers
2. Education Improvement
3. Strengthening Innovation & Entrepreneurship – A Knowledge Economy
4. Better Infrastructure & Housing for All
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Innovation
as el
a Key
Issue
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
for Innovation
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.
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Working with Chile’s Key Sectors
•Marine Resources
•Agribusiness
•Forestry
•Human Capital
•Environment
•ICTs
•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 Production
Year
Tons
1983
347
2005
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
theel
Model:
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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 you
www.chileglobal.org
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Talent Network for Innovation Mexico City, Septiembre 2007