Vatican Conference Lends Support to Gordon Brown's

UNCLAS VATICAN 003318

SIPDIS


SENSITIVE

DEPT. FOR EUR/WE (Levin); EB/ODF

E.O. 12958: N/AA
TAGS: EAID EFIN VT UK
SUBJECT: Vatican Conference Lends Support to Gordon Brown's
International Finance Facility


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SUMMARY
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1. (U) A July 9 Vatican seminar on "Poverty and
Globalization: Financing for Development gave an implicit
Holy See blessing for UK Chancellor Gordon Brown's
International Finance Facility (IFF). Brown sold the IFF
as an innovative finance mechanism that could increase
funding to meet the UN Millennium Development Goal of
halving extreme poverty by 2015. The Pope, in a letter to
the conference, called for increased foreign aid and
welcomed the IFF as "an innovative solution" to this end.
The high-level conference also brought together Cardinal
Cormac Murphy-O'Connor, Archbishop of Westminster, Inge
Kaul, UN Development Program, Jack Boorman of the IMF, as
well as representatives from the World Bank, International
Cooperation for Development and Solidarity, the UN
Executive Coordinator for Financing for Development, and
the Catholic Agency for Overseas Development. End Summary.

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Finance Facility Receives Papal Blessing
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2. (SBU) In an effort to push for movement on the Holy
See's priority global development goals debt reduction
for highly indebted poor countries and new financing for
development the Pontifical Council of Justice and Peace
brought together leading voices in international finance to
provoke discussion on what the Pope termed "creativity in
charity." According to Council sources, the conference was
the brainchild of Cardinal Murphy-O'Connor and was designed
to offer UK Chancellor of the Exchequer Gordon Brown a
platform to drum up support for his IFF proposal.


3. (U) The Pope warmly obliged by welcoming the IFF as part
of a "search for innovative solutions." In a letter read
to the Conference, the Pope emphasized the Holy See's
strong support for the millennium goal of halving the
number of people living in poverty by the year 2015.
Citing the Holy See' "preferential option for the poor" -
he urged development-goal advocates to show creativity in
pursuing new sources of financing so that "ever more
effective ways may be found of achieving a more just
distribution of the world's resources." While
acknowledging that considerable progress has already been
made in reducing the debt burden for poor countries, the
Pope emphasized that "more is needed if developing
countries are to escape the crippling effects of
underinvestment." Significantly, the Pope balanced his
call for increased foreign aid with a caution to recipient
countries of their "obligation to demonstrate transparency
and accountability" in the use made of international
assistance.

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Kickstarting Millennium Development Goals
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4. (U) A central motivation behind the Vatican's engagement
is the mounting concern that, at current trends, the
Millennium Development Goals will be, as Gordon Brown
characterized them, "another set of promises set, reset,
and reset again and then only betrayed." In his
presentation, Brown offered a bleak assessment of prospects
for meeting education, health, mortality, and poverty
goals. The IMF's Jack Boorman echoed Brown's concern
noting that if MDG goals are to be met or even approached,
"substantially more financing will be needed." According
to Cardinal Martino, Head of the Holy See's Council for
Justice and Peace, the Vatican hopes that the Pope's
support of the project will spark greater international
support to reach the Millennium Development Goals.

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Brown Calls for "New Compact"
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5. (U) Beyond building support for the IFF, Gordon Brown
made a broader call for "a new compact between developed
and developing countries" in which developing countries
would devise their own poverty-reduction plans that would
eliminate corruption while the wealthier countries would
agree to open markets, curb agricultural protectionism, and
finance debt relief, education, health, and economic
development. This echoed Cardinal Cormac Murphy O'Connor's


opening remarks in which he called for finding "new ways to
deliver on our promises." "Either we have the generosity
to lift the poor of the world out of the mire," he warned,
"or we face a crisis of huge proportions."

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Comment
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The Holy See will support any mechanism that will increase
funding for international aid and development, especially
as international aid as a percentage of GNP is dropping
worldwide. At the same time, the Pope's admonition that
recipient government's have obligations to demonstrate
transparency and accountability reflects a welcome
recognition that aid flows in the absence of domestic
reform will not allow the world to meet its Millenium
Goals. The British message, as delivered by Chancellor
Brown, tracked closely with the Holy See's views, and they
have continued to affirm their support for the IFF in
recent meetings with developed and developing country
ambassadors. Not all participants were sold on the IFF as
a mechanism, but all agreed that more needs to be done to
ensure that promises made are kept.

HARDT


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2004VATICA03318 - Classification: UNCLASSIFIED