WHY have I taken so much of this newspaper’s space to write about the recent United Nations Conference on Financing for Development held at Monterrey, Mexico? There are three answers to this question and each answer has a bearing for a country in Pakistan’s situation.

Monterrey was an important event since it signalled the intention on the part of the major suppliers of official development assistance (ODA) to increase the quantum of aid going to the developing world. There was a major difference between what the donors said at Monterrey and what they had promised before. After all, all aid givers had promised many decades ago that they will set aside at least 0.7 per cent of their gross domestic product as aid to the developing world. Had they done that, the amount of ODA today would be almost four times the amount actually provided, $175 billion, rather than $50 billion.

The amount is well below the pledges made several years ago, principally because the managers of the world’s largest economy, the United States, have of late assigned a very low priority to aid. The only countries that made an effort to keep their word to the developing world are the small nations of northern Europe. But their economies are so small that even if they provide one percent of their GDP as aid — as several of them do — it does not amount to very much.

On the other hand, if the US had lived up to its promise the amount of aid it would be giving should have risen to $173 billion in 2001 rather than $10 billion. In other words, while all the donors taken together are providing about one-fourth of the pledged amount, the United States is giving only one-seventh of the amount it promised the developing world decades ago.

If history is any guide, why should the developing world take the donors’ word given at Monterrey more seriously than the promises made earlier? The answer is that this time around the donors arrived at an international conference on aid by clearly indicating that they were planning to provide more ODA. President George W. Bush indicated that aid from the US will increase significantly from $10 billion in 2002 to $15 billion by 2006. Romano Prodi, the president of the European Union, also made a similar commitment.

It would appear, therefore, that a country like Pakistan, long dependent on official development assistance, can look forward to a larger amount of flows in the future. This is one reason for Pakistan rejoicing at the outcome of the conference at Monterrey.

The second reason for drawing