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UN Photo/Evan Schneider
The 2005 World Summit, officially the 60th High-level Plenary Meeting of the United Nations' General Assembly, gathered 151 heads of state from around the world. Held from September 14-16 at UN headquarters in New York, the Summit was the first opportunity for world leaders to review progress in reaching the Millennium Development Goals (MDGs), whose primary aim is to eradicate extreme poverty by the year 2015.
While characterization of the results range from modest to disappointing, ultimately the MDGs were unanimously upheld, including by the United States, whose cooperation had been in doubt. Some progress was made on aid, as rich countries committed to providing 0.7% of their national incomes in official development assistance were asked to fulfill this commitment and announce implementation schedules. In addition, rich countries pledged to improving the quality of aid, though they did not designate indicators of this quality. On debt relief, commitments made by rich countries at the G8 Summit in Gleneagles in July of this year were confirmed, but sources of this funding were not identified. The Summit has been called particularly disappointing for failing to emphasize development in current trade negotiations. More encouraging were developing countries' pledges to improve governance, transparency and accountability.
Microfinance on the Agenda
Microfinance was a prominent item on the agenda of this historic gathering. The most significant recognition of its importance was made in the 2005 World Summit Outcome Document adopted by the gathering, which states:
We recognize the need for access to financial services, in particular for the poor, including through microfinance and microcredit. (paragraph 23(i))
Support for microfinance was also strongly implied in the endorsement by the Summit of the 2002 Monterrey Consensus, which states:
Microfinance and credit for micro-, small and medium-sized enterprises, including in rural areas, particularly for women, as well as national savings schemes, are important for enhancing the social and economic impact of the financial sector." (paragraph II, A, 18)
World Leaders Speak Out
Heads of state from Africa, Asia, Latin America and Europe called specific attention to access to financial services in their statements to the assembly, including those from Bangladesh, Brazil, the Netherlands, Slovenia and Uganda. In addition, the written statement Mr. Tassos Papadopoulos, President of Cyprus, also called for promoting microfinance.
Particularly influential support, not only for microfinance, but for the International Year of Microcredit, came from His Excellency Mr. Mathieu Kérékou, President of the Republic of Benin, who spoke in his capacity as Chairman of Coordinating Bureau of the Least Developed Countries (LDCs), who said:
2005 was declared the International Year of Microcredit in order to stress the crucial importance of access to finance and particularly to microfinance. Access by poor people to financial services is a powerful tool to fight poverty. Microfinance is an important element of the financial sector and must be treated as such. It makes a huge difference when poor people have access to a broad range of financial services, whereby they can invest in income-producing activities and meet their vital needs, such as health, education and nutrition. The work that lies ahead is together to commit to effective action, which will guide us to victory by helping poor people and target groups in our country to overcome destitution and disease. By doing this, we will have done a good humanitarian deed. Finally, our fervent wish is that these present deliberations lead to realistic solutions that reflect the specific nature of the least developed countries - one that will help reverse the persistent tendency of the impoverishment of their people and the marginalisation of their socioeconomic structures.
President José Luis Rodríguez Zapatero of Spain focused on the role of microfinance in facilitating remittances saying: "Remittances amounted to US$80 billion in 2002 and it is estimated that at present they account for more than US$100 billion. They are now the second biggest source of capital for developing countries, ahead even of ODA. We must create the conditions in order to maximize their benefits and therefore reduce the transfer costs so that less money is lost in the process…We want facilitate access to micro-credit facilities for recipient families, so that they may undertake initiatives and projects to enhance development."
His Majesty King Mswati III of Swaziland spoke of a changing economic policy in his country, saying: "In order to address this and other problems, we have since embarked on a new economic approach which emphasizes that while we continue to attract and welcome foreign direct investment, we must at the same time create our own vibrant business community that will spearhead economic growth. To this end, we have already crafted and are implementing the National Small and Medium Enterprise Policy, which emphasizes capacity building through the training and entrepreneurs."
Beyond heads of state, other speakers to highlight microfinance included prominent business leaders, such as Dr. Bamanga Tukur, the Chairman of Nigeria's BHI Holdings Ltd. Who said, "The goals being pursued by the General Assembly and the larger international community are of great importance and relevance to the private sector. In today's global society, business interests increasingly overlap with objectives. Business operations - from micro-enterprises to multinationals - are greatly impacted by health, security and economic development factors."
For more information on the 2005 World Summit, please visit: www.un.org/summit2005/
For more information on the International Year of Microcredit, please visit: www.yearofmicrocredit.org
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