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Mozambican PM warns against aid cut due to financial crisis

Mozambican Prime Minister Luisa Diogo has appealed to leaders of the rich countries not to use the current international financial crisis as a justification for reducing aid to the developing world.

Speaking in Doha, at the plenary session of the United Nations Conference on Development Finance, at the weekend, Diogo insisted that official development aid should not fall victim to the financial crisis.

She said over the past two years, there had already been an overall decline in the money spent on foreign aid by the developed nations.

If this decline continued, she warned, a lack of resources would make it impossible for poor countries to maintain the economic growth rates they have achieved to date.

Diogo urged the United Nations to lead the international community in adopting appropriate measures to alleviate the consequences imposed by the crisis, particularly in non-oil producing countries.

Referring to the Monterey Consensus on development aid, adopted in Mexico in 2002, Diogo recognized the efforts that had been made since then to mobilize resources for development, to promote international trade as an engine of development, to reduce foreign debt, and to find solutions to the problems inherent to the international financial system.

But six years after the Monterey consensus, assessment of its implementation showed uneven progress.

Diogo pointed out that Africa had fallen increasingly behind in the targets agreed at Monterey.

On top of this failure came the added costs of the energy, food and financial crises, and the challenges posed by climate change.

Diogo said that despite these adversities, Mozambique had been able to improve its business environment, create incentives for local and international investors and sustain an economic growth rate of around seven per cent a year.

Diogo challenged the rich countries to show the political will to meet the UN target of allocating sums equivalent to at least 0.7 per cent of their GDP to official development aid.

To date only five donor countries have reached or surpassed this target – Sweden, Luxemburg, Norway, Holland and Denmark.

Speaking to journalists later, Diogo said Mozambique had benefited from increasing volumes of foreign aid in recent years.

“In 2007, we received 1.6 billion US dollars, this year we are receiving 1.7 billion, and in 2009 we envisage receiving more than 1.8 billion,” she said.

But the Premier noted that the inflows did not meet the needs of the country’s development programmes, and should therefore be increased.

The annual rise in the aid channeled to Mozambique, in Diogo’s view, showed that the industrialised nations are continuing to support those countries that show they are serious in their programmes and are committed to the well-being of their peoples.

“Mozambique has helped itself through its seriousness in implementing reforms, programmes and projects,” she said. “That’s why we are recording an annual growth rate of seven per cent. We said at the conference that we need more resources so that we can continue presenting better results”.

Diogo was confident that that the Doha meeting will result in a consensus favourable to developing countries, and that will touch on the need for the rich countries of the world to continue efforts to provide more development aid.

Speeches on the opening day of the Conference were unanimous in declaring that the international financial crisis must not be used as a pretext to interrupt debt relief initiatives or halt direct foreign investment, a theme that was central to the intervention made by Diogo.


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