US embassy cable - 04VATICAN3318

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