I am delighted to participate in this year’s Commonwealth Business Forum. Our focus this year on “Partnering for a More Equitable and Sustainable Future” would be a timely one in any set of circumstances but is especially so at this particular time as we confront the effects of a global economic meltdown.
While the immediate challenge facing the global community is to secure a meaningful recovery from what has been one of the worse international economic and financial crises of our time, the longer term challenge is to ensure sustainable growth that aids in the eradication of global poverty and conserves the planet’s resources for future generation. This is a tall order in any circumstance but particular daunting in the face of current events.
There is little doubt on our part that emerging out of this global economic crisis, the world will come to experience a “new normal” including a new level of sustained unemployment. Changing economic behaviour and altered institutions will produce a different environment in which we must all operate. As Thomas Cottle of Boston University, author of Hardest Times: The Trauma of Long-term Unemployment says: People are going to be damaged and may not recover in their lifetime.
It is for this reason that on almost every front, we are mindful of the need to partner with others in the international community to advance the cause of sustainable development. We endorse the sentiments expressed in the Communiqué of the G-20’s Pittsburgh Summit which acknowledged “a responsibility to recognize that all economies, rich and poor, are partners in building a sustainable and balanced global economy in which the benefits of economic growth are broadly and equitably shared”.
I believe that the speed with which the financial crisis in one major industrial country became global amazed us all. However, perhaps the most unsettling experience for small-states was the reality of the limited policy options we had to respond to the crisis. This experience provides a lesson we must take into our future economic planning as much as possible, the lesson being that we must do all we can to so manage our affairs in the “new” normal course so as to ensure that we are in the best position to endure some of the scars from this crisis. These scars include lower global output, severely weakened public finances, and long term joblessness.”
As we are often reminded in The Bahamas, tourism matters. It is the engine of our economy. The full impact of the global crisis hit us in September, 2008, with a drop in tourism receipts, a fall in FDI, a deceleration in private sector credit and lay-offs in the private sector.
In the face of double-digit unemployment, decelerating private sector credit and falling foreign direct investment, policymakers in an extremely open small economy such as our own have relatively little room to manoeuvre.
Fortunately for us, the fiscal discipline that we earlier established as our principal macroeconomic strategy afforded some headroom to increase public sector borrowings and we availed ourselves of it. In doing so we eased the economic hardship on the most vulnerable in our country while maintaining the public sector’s level of employment and other recurrent spending. And we are doing this without adding to the tax burden of the private sector which was itself a victim of the economic weakness.
Our task was not made easier by the fact that in the midst of the global economic and financial meltdown, the second pillar of our economy, the international financial services sector, came under renewed attack from the OECD and G20 developed countries who tagged, wrongly we believe, international financial services centres as responsible, in whole or in part, for the global economic and financial crisis.
If we are to accept that it is “the responsibility of all economies, rich and poor, as partners in building a sustainable and balanced global economy in which the benefits of economic growth are broadly and equitably shared”, then the lessons taught by the present crisis must lead inter alia to the following:
1. An honest assessment of the risks posed to our global economic and financial systems and avoid placing blame where it is not due; 2. A better means of assessing and responding to systemic risk in the global financial architecture – one that demonstrates equity in calling all economies, those of the developed and developing world, into account; 3. Promote greater equity in the international development process so as to make the prospects for sustained growth of the world economy more enduring and widespread; and
4. Better coordinate global resources in order to maximize use; this is especially true with respect to those resources channelled by the multilateral lending and aid agencies.
I do not think that any useful consideration of a sustainable future can occur without the recognition that one of the issues bearing most profoundly upon that future is the matter of global warming or climate change. This is perhaps more acutely true of the Small Island Developing States. In point of fact, development for them cannot be made more sustainable until and unless the issue of climate change is handled. And so I begin my thoughts on our topic with the urgency of dealing conclusively with the challenge of climate change.
Following the 1992 Rio Summit on the Environment, most nations in both the developed and developing worlds hailed the Agenda 21 Convention as a significant advancement. It created greater consciousness about the ill-effects of current production and consumption patterns on the earth’s resources and generally resulted in more environmentally responsible practices.
In response to this, The Bahamas ratified several pieces of international environmental legislation, including The Caribbean Plan of Action for the Protection and Preservation of the Environment, the Montreal Protocol and the London and Copenhagen Amendments for Climate Change.
There is no longer any credible debate about the reality of global warming. The United Nations’ International Panel on Climate change has concluded that “global warming is a reality and has almost certainly been caused by recent human activity.”
Climate Change is fundamentally a sustainable development challenge which goes well beyond the matter of environmental protection to embrace both economic and social development. It poses a considerable threat to many developing countries through increased droughts, stronger and more powerful hurricanes, massive flooding, lower agricultural output, coastal erosion and saline intrusion into ground water.
The G-20 Pittsburgh Summit’s Communiqué acknowledged “a responsibility to secure our future through sustainable consumption, production and use of resources that conserve our environment and address the challenge of climate change.” Indeed throughout its Communiqué the G-20’s Pittsburgh Summit reflects a commitment to addressing “the threat of a dangerous climate change.”
The point I wish to make here is that global warming has already begun to take its toll. Even as I speak, a basic agreement still has to be reached. Options for climate change financing still have to be determined. The final round of preparatory talks in Barcelona for the upcoming Copenhagen Conference in December intended to agree a new international framework has revealed deep divisions and has indicated that a basic agreement is unlikely to be achieved in Copenhagen.
While there appears to be broad recognition of the urgent necessity for strong action, still the level of commitment to such action varies considerably between the key participants and continues to be elusive. But as it is recognized as so essential to a sustainable future, it seems that every cooperative effort should be taken to press forward on the initiatives for action.
I do not pretend that the issues confronting us are simple or easy to resolve. I hope, however, that the Special Session on Climate Change which our Chairman will convene on Friday of this week will permit us to hear the perspective of a number of our non-Commonwealth colleagues before reviewing and seeking to arrive at a consensus on at least some of the most critical issues we must deal with on the Climate Change front.
For our part, The Bahamas is party to the UN Convention on Biological Diversity. We are fully committed to meeting the targets established by the Convention with regard to protection of marine and land ecosystems for 2010 and 2012.
We recently completed an ecological gap analysis of The Bahamas which identified specialized areas of biodiversity and critical habitats recommended for protection. Planning is ongoing to facilitate the expansion of the system of national parks and marine protected areas to include up to 10 per cent of the terrestrial areas and 20 per cent of the near-shore marine resources of our country.
Another enormous challenge to a more equitable and sustainable future for much of the Commonwealth and the Americas is the availability of the quality of education that the future increasingly requires.
It is generally accepted that there is a strong positive link between education and a country’s economic growth and development and this is driving my government’s policy on education as it does in most countries concerned with economic growth and development. Education is generally measured in years of schooling which is an easy measurement to calculate and which enables one to make cross-country comparisons.
It is becoming clearer to all of us however, that there is a more powerful link between the quality of education or the cognitive skills of the population and the progress of economic development and indeed the progress of development generally. And the evidence is that increased expenditure on education does not necessarily have an impact on the quality of education.
Furthermore, the evidence also clearly suggests that future economic growth will be increasingly more knowledge-based, placing even more demands on quality of education. We have witnessed a dramatic change in the forces that shape our own economy in just a few years. And in this rapidly changing economic environment an undereducated nation is one of the greatest threats to growth and sustainability.
There is also another key role for education in securing the sustainability of our future and that is its role in actually promoting sustainable development in enabling people to make right environmental choices and in developing capabilities for solving environmental problems.
The state of education is not only one of the distinguishing characteristics between the developed and developing countries, it is one of the principal factors driving that distinction. Not only does education partly define the gap between developed and developing countries, it is one of the key factors creating that gap.
It seems therefore that another of the most obvious candidates for our focus in partnering for a more equitable and sustainable future for the Commonwealth and the Americas is education: how its quality can truly be improved.
We all have a stake, a meaningful state, in a sustainable future. That future will be difficult at best to achieve if we act in partnership with each other; if we do not act in partnership, it is certain that it will be impossible to secure. I urge us today and in the days ahead to resolve to doing what we must to act.
