Responding to Monterrey

Creating Mechanisms to Increase Funding for Social Programs to Alleviate

Poverty

National Endowments for Social Action

L. Ronald Scheman, Director General, IACD

Objectives

• Develop viable mechanisms to attract additional financial resources to meet the countries’ development priorities

• Promote collaboration among the

stakeholders and enhance meaningful public-private sector and civil society involvement in the development processes

Political context

• Summit of the Americas

• UN Millennium Declaration

• Monterrey Consensus

• OAS General Assembly

• Ministerial Meetings

Rationale

• Improve the enabling environment as a basis for fulfilling the goals of Monterrey and the Millennium Challenge Account– Transparency– Public/private partnerships– Involvement of civil society

• Institutional structure that will generate confidence & have credibility with donors

• Many individual bond holders create new environment for donations of debt

The Need

• National institutions with multi-partite governance dedicated to poverty alleviation and delivery of social services

• There is not one solution that will fit all challenges

• The IACD offers NESA as a basis for discussion in how to address the resources challenges facing development cooperation in the region

NESA - Mechanism

• Governance by partnership of government, private sector, and civil society

• Tax-exempt institution • Professional management • Result-based quality projects• Transparency and accountability in operations• Delivery of services by collaboration of civil

society organizations with government

Governance of NESA: A Second Tier Development

Institution

Board of Directors

Advisory Board- Distinguished Development Experts- Donors- OAS, IDB, ECLAC

ProfessionalManagement

Board of Auditors andEvaluation

Nominees

Government

Private Sector

Civil Society

NESA - Potential Resources

• Non-reimbursable Official Development Assistance

• Private contributions, through the Potential offered by tax-exempt institutions

• Conversion of public and private debt and bondholder contributions

Monterrey Criteria: Increase Grants: Reduce Debt

Objective – Rechanneling debt through contributions of debt to NESA

Donor

DevelopingCountry

NESA

Grants to Social and Poverty Alleviation Projects

Interest + Principal

Donates Loan ARen

egot

iates

and

Pays I

nter

est L

oan A

OriginalTransaction

Conversion

Loans A, B, C

Building on past experiences

• Multi-partite concertation: Acuerdo Nacional in Peru, Convergencia in Nicaragua

• Foundations to attract private funding: Luso-American foundation, National Endowment for Democracy – U.S.

• Debt conversion mechanisms: Canada’s line of credit for housing in Central America, Italy’s initiatives in the Andean countries