Mr. Chairman
Honourable Prime Minister
Ministers of Government
Other Government Officials
Representatives of Regional Financial Institutions
Members of the Business Sector and Civil Society
Members of the Media
Other Distinguished Participants and Guests at this Opening Session
Ladies and Gentlemen:
The CARICOM Secretariat is very pleased to be associated with this exercise, which is of critical importance to the Caribbean Community. I would like to thank the UNDP for arranging this Regional Consultation at such short notice, following the request of our Permanent Representatives at the United Nations in New York, and to express our sincerest appreciation to the Government and People of St. Vincent and the Grenadines for being such gracious and hospitable hosts.
This consultation is intended to assist Member States in formulating definitive policy positions and recommendations on the issues on the Agenda of the Final Preparatory Committee Meeting on Financing for Development which will be held in New York on 14-25 January 2002 and the High Level International Inter-Governmental Event on Financing for Development which will be held two months later in Monterrey, Mexico on 18-22 March 2002.
Given this late stage of the process and the imminence of the final Preparatory Meeting and the Substantive Event itself, this is probably the last opportunity for CARICOM to get together to concretize and harmonise its position on various critical issues. We should therefore make the most of it.
We in the CARICOM Secretariat take note of the important role that former Ambassador Julian Hunte of Saint Lucia and his other colleagues in New York have played in the preparatory process over the last year, especially at the Regional (Hemispheric) Consultations in Colombia in November 2000, and the vigorous campaign which they have waged to influence the process. This followed the submission by the UN Secretary-General of a 62-page Report to the Preparatory Committee in February of this year, at the Second Substantive Session of the Preparatory Committee, to take more fully into account the uniquely volatile and vulnerable situation of small economies.
These efforts were probably not in vain since the Report of the High Level Panel (the Zedillo Report) that was issued in June of this year, does begin to recognize the importance of certain issues to small economies in particular, in addition to those affecting the wider developing country population.
On the basis of both the Regional Consultations and the Zedillo Report, a Facilitator (Mr. García of Mexico) was commissioned to prepare a preview Draft Outcome of the Conference for discussion and evaluation at the Resumed Third Session of the Preparatory Committee that was held in New York on 15-19 October 2001. The Facilitator produced a reasonably fair and balanced 11 page report dealing with the six assigned developmental issues:
- Mobilising domestic financial resources,
- Mobilizing international private resources,
- International trade as an engine of growth,
- Increasing international financial cooperation,
- Enhancing finance for Global Public Goods, and
- Systemic issues: reforming the international financial architecture, improving global governance, and strengthening the role of the UN.
It is, however, very disappointing to note that, despite the balanced nature of the Facilitator’s Report, the Preparatory Committee last September was subject to a long intervention by the developed countries (led by the USA, Belgium on behalf of the EU, Japan, Korea and Norway on behalf of the Nordic countries) on the need for the developing countries to go even further in reforming their macro-economic policies so as to attain, in the rather unequivocal words of the USA representative, “total capitalism” (and not partial capitalism).
There is resistance, on the part of the developed countries, to the proposals for either introducing new instruments such as systematic provision of Global Public Goods (to cover costs of controlling communicable diseases, environmental protection, etc); setting up an International Tax Organisation that would be more democratic and mindful of the concerns of all countries – including developing countries, than the OECD Forum; or reinvigorating the pursuit of old targets, such as 0.7% of GDP of developed countries in ODA, introduction of SDRs, enhanced debt relief, and enhanced market access.
This position on the part of the developed countries arises from the belief which underlies the dominant economic paradigm that free competition in all sectors of the economy is the only path to economic and social development. What we are finding, however, as our trade negotiators will attest, is that this free competition rule does not seem to extend to all sectors. In fact, it seems to exclude some issues, such as agriculture subsidies in developed countries.
The aims of the World Trade Organisation include raising living standards and promoting sustainable development. Its charter says it must take into consideration the “needs and concerns at different levels of economic development”. It sets out to level the playing field by setting trade rules that are neutral.
In reality, the rules favour those who have the resources to participate meaningfully in making them and to subsequently engage in the litigious process of enforcing them. Instead of being the great equalizer, however, the WTO, through its structure and operations, emphasizes the disparity between the developed and developing world and perpetuates the disadvantageous position of small economies.
Despite the evidence that globalisation and liberalization increase income inequality within and between countries, there is tremendous difficulty in getting this reality acknowledged, much less discussed. The struggle for recognition of the peculiar characteristics and consequent special needs of small states is necessary only because of the prevailing belief that size does not matter. But we in the small economies of this globalised world know that size does matter.
When approaching the international financial market to raise capital, small size results in higher assessments of risk and vulnerability thereby raising the cost of capital. When building economic infrastructure, the per capita cost is higher in small economies.
These realities should be the catalyst for today’s Regional Consultation to come up with cogent and coherent arguments, proposals and positions that will influence the outcome of the final Preparatory Session in January and, ultimately, the outcome of the substantive Conference in March 2002. In that regard, the CARICOM Secretariat encourages as many Member States as possible to participate in the conference so that the Region’s views can be heard and have some impact on these proceedings.
Mr Chairman, by now it is clear to all that the September 11 events and the subsequent international response have severe implications for financing and development. In no region of the world has the impact of these events on GDP been greater than in the Caribbean. Our vulnerability and economic volatility are reflected in dramatic declines in, inter alia, tourism and related activities, perishable agricultural trade, insurance and re-insurance viability and sustainability of public finances.
The CARICOM Heads of Government were moved to hold an Emergency Meeting on October 11 2001 in The Bahamas to discuss what needs to be done in response to the immediate and emerging crisis. This was followed by a Meeting of CARICOM Ministers of Finance in Barbados last month.
We need the support of the International Financial Institutions if we are going to overcome the current economic crisis and also equip ourselves to deal with future crises and, in that regard, what is accomplished at this Regional Consultation, the final Preparatory Meeting in January and the Substantive Conference in March 2002 are of extreme importance.
I therefore wish this Regional consultation every success.
Thank you.
