[*PG1] Monterrey Consensus and International Economic Law Matrix

Issues / Actions Monterrey Consensus International Economic Law Dynamics of Interaction and Reinforcement
Core Conceptual Issues Accepting the concept of a new kind of partnership between developed and developing countries anchored on mutual responsibility and accountability;
Sharing mutual responsibility: achievement of measurable improvements in sustainable growth and poverty reduction.
Prompting the cooperative law of nations—which binds states to adhere to principles of cooperation for common interests—to play a proactive role and realize its potential;
Providing a legal mechanism to enforce accountability of both rich and poor nations;
Giving a concrete expression to the well-recognized, mutual duty to cooperate in economic development.
Opportunities provided by international consensus, as well as by pragmatic and moral forces, should be exploited;
IEL will immensely gain as a discipline because it will have a worthwhile mission to perform—with direct impact on welfare of mankind, enriching its contents and improving its utility—and will thus command greater loyalty of a larger number of nations.
Core Leading Actions Ensuring proper follow-up to implementing the agreements and commitments reached at the Monterrey Conference. Facilitating transformation of commitments into operational norms and informing decision-making processes. The role to be played by IEL would not be merely instrumental—concerned with the pace of implementation alone—but it would also influence and inspire the process with its concept of a world community and collective responsibilities. IEL should move beyond accelerating the “pace” to a point of “breaking the path” itself.
[*PG2]Foreign Direct Investment / Other Private Flows Increasing the volume and geographical coverage of FDI and other private flows to developing countries. Facilitating provision of risk guarantees at subsidized cost, more easily obtainable and more reasonably priced;
Devising innovative legal structures and processes for more efficient, simpler, and cheaper co-financing for venture capital arrangements and other lending instruments between source countries and multilateral institutions;
Helping developing countries to liberalize foreign investment regimes;
Assisting in the evolution of a comprehensive, balanced, and fair multilateral investment treaty in accordance with principles of rule of law.
The response of IEL to the challenge of ensuring greater private capital flows and their wide dispersal among developing countries will hopefully result in universalizing a liberal investment regime in the same manner that GATT/WTO has universalized liberal trade policies.
International Trade Reaffirming a commitment to trade liberalization and a rule-based, nondiscriminatory multilateral trading system. Helping developing countries to gain and consolidate better access to markets;
Assisting developing countries in negotiations by providing a set of standards based on the rule of law, inter alia, to prevent the misuse of legal processes.
A multilateral trading system enshrined in GATT/WTO has been erected on legal foundations. The international community looks to IEL to assist it further by way of additions and improvements to the existing structure.
[*PG3]ODA: Substantial Increase in ODA Increasing ODA substantially to enable developing countries to achieve internationally-agreed development goals;
Ensuring that recipient and donor countries and international institutions make ODA more effective, e.g., by harmonizing operational procedures, better donor coordination, improving targeting to the poor, and enhancing recipients’ ownership;
Ensuring that developing countries act on their commitments to adopt sound policies, establish good institutions, fight corruption, and promote good governance.
Helping to adopt a new paradigm for ODA that seeks to transform the charity of nations into a binding obligation of the world community. A synergy of spirit of Monterrey and that of cooperative law of nations—based on recognition of right to development, clear duty of states to cooperate to eradicate poverty, and factual acceptance of entitlement to assist based on need—can transform voluntary charity of nations into an obligation of the world community embedded in international law.
Resolution of External Debt Problem Calling for further improvement in the enhanced HIPC initiative;
Pleading for additional resources for the HIPC Trust Fund;
Stressing need to address external debt problems of non-HIPC countries.
Helping to further strengthen legal structure of debt relief providing, inter alia, debt cancellation mechanisms, debt education, and debt health swap instruments. External or domestic debt, in the ultimate analysis, turns into a legal matter. Debt relief must thus take place through legal processes and mechanisms. An effective solution may break the vicious circle when there is (a) willingness from creditors to recognize the futility of giving new loans so that borrowers may use them to repay the old ones, and (b) a capability in the legal system for writing off such bad debts. Here, an interplay between the Monterrey Conference’s keenness to find a solution to debt problems and the capacity of IEL to supply innovative and creative solu[*PG4]tions would prove fruitful.
Adoption of an International Debt Workout Mechanism Calling for developing an international debt workout mechanism to restructure unsustainable debt in a timely and efficient manner;
Promoting fair burden sharing and minimizing moral hazard.
Helping to establish a legal framework, allowing a qualified majority of sovereign creditors to approve a restructuring agreement that would provide for a stay on creditors’ litigation, safeguards to protect creditors’ interests during the stay, a mechanism to induce new financing, and a judicial panel to arbitrate disputes and oversee the process. The model envisaged by the IMF for restructuring unsustainable debt is very similar to that of a domestic bankruptcy court. The international financial community’s demand for a solution will be met by a response from IEL through extrapolation of domestic legal experience to the international arena.
Innovative Sources of Financing Exploring innovative sources of financing. Setting up appropriate legal mechanisms and processes to make innovative financing possible. Introducing an innovative system of financing will be a challenge for IEL and will cross the operational divide between development thinking and practice.
Improving Global Economic Governance Strengthening the leadership of the U.N. for development;
Enhancing coherence, governance, and consistency of the international system;
Improving international financial architecture;
Enhancing participation of developing countries in international dialogues, norm setting, and decision-making processes.
Giving effect to measures aimed at improving global governance, for which IEL is indeed indispensable. Here again, it is the mutually reinforcing process between development aspirations and legal framework and spirit that makes a powerful combination for effective improvement. IEL would not only provide the necessary instruments, but it would also furnish models of good governance in various spheres of life for adoption and emulation.