|Financing for Development|
|Wednesday, 24 March 2010 17:08|
Statement by Mr. M.R.Keegel, Charge d’ Affaires , at the Plenary Meeting on the
The East Asian financial and economic crisis in 1997 set the stage for this dialogue on financing for development. At that time the current global economic meltdown was nonexistent, nonetheless Monterrey endorsed multilateral financial institutions to anchor well designed surveillance and early warning systems in order to identify and prevent potential crises. The Monterrey Consensus and the Doha Review were benchmarks of our united efforts to address the macroeconomic dimensions of international financial, monetary and economic architecture, as well as eradication of poverty and the promotion of long-term development. Revisiting the primary underlined principles in Monterrey and Doha today is, therefore, more valid and relevant in the context of current global complexities.
Developing countries are extremely vulnerable to the negative effects of the multiple global crises. We note with satisfaction the increase of Official Development Assistance (ODA) and other forms of traditional development assistance in real terms to help developing countries since Monterrey, but a significant part of this flow is allocated for debt relief and humanitarian assistance, thus it has a minimum qualitative impact on development. The full materialization of the ODA commitment of 0.7% GNP by donor countries is therefore necessary to further enhance the capacity of the recipients.
Developing countries, particularly middle and lower middle income countries, that are beyond major ODA thresholds have to primarily depend on external trade, FDI and bi-lateral and multilateral financial borrowings. The reliance of these countries on the Bretton Woods Institutions has in effect become inevitable. But their ceaseless quest for development is incapacitated in the absence of coherence and transparency in the international financial architecture and the failure of the multilateral trade negotiations to achieve a development oriented early outcome. The restructuring of the multilateral financial architecture, therefore, is a primary need.
Our exposure to international financial institutions is tied to harsh pro-cyclical conditionality, accompanied by non-economic political bargains. Against such a backdrop, the aspirations echoed in Monterrey to strengthen the UNs leadership in promoting development and enhance coordination, coherence and effectiveness between the World Bank, IMF and WTO need not be re-emphasized.
Our President (H.E. Mahinda Rajapaksa) was given a renewed mandate at the Presidential Election in January this year to continue implementing his vision for the country’s rapid economic development. The ‘The Northern Spring and Reawakening of the East’ programmes were launched to bring accelerated development for the people, who lost these opportunities in the provinces directly affected by decades of conflict. The key initiatives introduced by the Government to promote rural development include the establishment of Dairy and Medicinal Herb Cultivating Zones/Villages, Rehabilitation of Irrigation Works, Setting up of Industrial Townships, Community Managed Water Supply Schemes and Rural Electrification, IT Centres and Rural Infrastructure Development. The objective of these programmes is to economically empower rural families and to stem the drift to the big cities. Whilst we continue to rely on traditional sources of borrowing for our development programmes, proper domestic fiscal management has also ensured that we set apart a significant proportion of public expenditure from our national budget for development, thus ensuring that we do not rely entirely on external funding for these programmes. Our home-grown, pro-poor people-oriented development strategies have proved to be successful.
Our large, mainly female expatriate workforce maintains stable remittances amidst the economic crises due to their minimum exposure to business cycles. The country’s policy support enabled the rural agriculture sector to absorb the workforce that lost employment in the garment sector in the wake of market downturn. What we fear most is the hard earned gains slipping out of our hands in a turbulent international environment amidst ripples caused by man-made and natural disasters.
Mr. President, we hope the deliberations here give added impetus to the call for collaborative international efforts to address the challenges faced by all of us in the developing world and renew focus on the implementation of our common agenda as agreed in Monterrey, Doha and at other multilateral fora.
Thank you, Mr. President.