BuaNews (Tshwane)
9 September 2008
New York — The rising costs of food, fuel and finance has resulted in reduced development aid to emerging economies, says Finance Minister Trevor Manuel.
This is despite the military expenditure rising.
Speaking at the launch of informal consultations on the follow-up to the 2002 United Nations (UN) International Conference on Financing for Development, Monday, Mr Manuel said: "The road ahead appears far less hospitable than the one in our rear-view mirror.
"We will walk the second half of the journey to 2014 in the shadow of three intertwined crises of food, fuel and finance."
The outcome of the conference, known as the Monterrey Consensus, has become a major reference point for international development cooperation since its adoption.
Mr Manuel highlighted that the development of emerging markets has taken a back seat to military expenditure in recent times, in contradiction to what was agreed upon in 2002.
"Looking at where the money goes, we might not like the answers. World military expenditure is estimated by the Stockholm Institute to have been $1.3 trillion in 2007. Compare this to the $104 billion spent on Oversees Development Aid (ODA).
"Military expenditure amounted to 2.5 percent of world Gross Domestic Product (GDP)."
UN Secretary-General Ban Ki-moon reported last week that his Millennium Development Goals (MDGs) Gap Task Team, ODA from Development Assistance Committee [DAC] members represents only 0.28 percent of their aggregated national income.
Aid flows to developing countries dropped by 4.7 percent in 2006 and a further 8.4 percent in 2007.
The Stockholm Institute, said Mr Manuel, reports that military expenditure increased by 3 percent in 2006 and by 6 percent in 2007.
"These cold facts suggest that since Monterrey we have done the opposite of what we said we would do, that we have chosen war instead of peace," he highlighted.
Economic growth lifted so many out of poverty since the turn of the century and placed the attainment of MDG 1, to eradicate extreme poverty and hunger, within our reach, he said.
"The three F's [food, finance and fuel] will cut directly into the incomes of the poorest and put pressure on the resources available for social security, education and health care.
"This in turn will threaten to undermine the coherence and consistency of the international monetary, financial and trading systems in support of development," he noted.
To this extent, he said, the food and fuel shocks and global financial turmoil were a call to action; a message from providence urging us to respond with the necessary haste and foresight.
"We must translate the dangers into a spur towards a renewed sense of urgency and global partnership," he said.
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