THE HON. DR. KENNETH BAUGH,
DEPUTY PRIME MINISTER AND MINISTER OF FOREIGN AFFAIRS AND FOREIGN TRADE OF JAMAICA
TO THE UNITED NATIONS CONFERENCE ON THE WORLD FINANCIAL AND ECONOMIC CRISIS AND ITS IMPACT ON DEVELOPMENT
NEW YORK, 24th JUNE 2009
Jamaica joins others in commending you for the convening of this important Conference. This meeting is a useful reminder of the critical role to be played by the United Nations in fulfilling its purposes and principles as outlined in the Charter “to achieve international cooperation in solving international problems of an economic, social, cultural or humanitarian character.” As we have stated in other fora, the financial crisis has indeed underscored the need for a deeper and more expanded role of the United Nations in international economic governance, given its universal membership and by that token, its legitimacy.
For too long, developing countries, including the small and vulnerable among them such as Jamaica, have been voiceless in the BWIS. This Conference is therefore a historic undertaking to which we attach great importance. In this context, our deliberations have served to strengthen multilateralism, a principle to which Jamaica fully subscribes. Even more importantly, this Conference demonstrates to the respective man or woman on the street, those who have been impacted directly, that the global decision-makers are actively pursuing solutions to the challenges posed by the crisis.
Jamaica aligns itself fully with the statement delivered earlier by the Honourable Prime Minister of Belize on behalf of the members of the Caribbean Community (CARICOM). We also associate ourselves with the statement delivered by Sudan on behalf of the G77 and China.
The financial crisis has occurred at an inauspicious period. Only a few months ago, developing countries were struggling to address the impacts of the food and fuel crisis. It is not surprising that the “triple tsunami” of the food, fuel and financial crises, in addition to the increasingly debilitating impacts of climate change, have only exacerbated our already precarious situation. Developing countries did not cause the crisis; however owing to our vulnerability, we have been most affected and even worse, the most lacking in resources to provide an adequate response.
In my own country, Jamaica, the impact has been severe; major export industries have recorded lower levels of output and exports due to a downturn in demand resulting in increased unemployment and major declines have also been recorded in remittance inflows. At the same time, access to financing on the international capital market has been significantly restricted to Jamaica together with a concomitant slowdown in foreign direct investment. In short, Mr. President, the livelihood and development prospects of the majority of our population have already been affected; there is a strong possibility that as the crisis evolves, the situation could worsen.
Also of critical concern is the impact that the crisis is having on the attainment of the Millennium Development Goals. It is becoming increasingly clear that Jamaica may not achieve some of the targets, while in some areas, there is real danger that progress already achieved could be reversed. This is more evident in relation to Goal I concerning the eradication of poverty where reports suggest that the number of persons living below the poverty line has increased.
Recent reports indicate that there may soon be signs of recovery in the global economy. Based however, on the size and openness of our economies and our incapacity to withstand external shocks, Jamaica, like many other CARICOM countries, will inevitably experience a lag in recovery. Our economies are not expected to show signs of recovery until roughly a year following global recovery.
It is against this background that I wish to make the following points.
Firstly, developing countries such as Jamaica need additional resources. The recent G20 meeting in London committed to provide significant funding to assist in recovery. It is our view that this funding is best channelled through regional and multilateral agencies which would need significant recapitalisation, including the Inter-American Development Bank and the Caribbean Development Bank. Within this context, it is critical that the developed world fulfil its commitments, reaffirmed at Monterrey in 2002 and last year in Doha to commit 0.7 % of their GDP to Official Development Assistance. While a few have fulfilled this commitment, many are yet to do so.
Last year, Prime Minister Golding in his address to the General Assembly, made a call for recognition of and special attention to be given to the needs of Small and Vulnerable Highly indebted Middle Income Countries including Jamaica. We reiterate that the concerns of this group of countries must be recognised by multilateral financial institutions. In this context, there is need for access to concessionary financing for Small, Vulnerable and Highly Indebted Middle-Income Countries which would assist in specifically addressing debt and debt sustainability concerns, as well as the establishment of empirical criteria to categorise this group of countries. Specific programmes are needed for this group of countries given the deep pockets of poverty which prevail in such countries.
For years, many among us have called for comprehensive reform of the international economic architecture. I believe that there is now consensus that the system needs to be overhauled, making it more reflective of current global economic realities. This is a collective responsibility; not the remit of a select few. Global challenges require global solutions. For too long, the corridors of decision making have been closed to the views of groups of countries, such as Small Island Developing States (SIDS) like ours which have particular needs and concerns.
At the same time, it should be borne in mind that positive spin-offs can be effectively realised from partnership between developing and developed countries. As pointed out by the Prime Minister of Jamaica last week at the ILO Labour Conference in Geneva, developing countries account for 37% of global trade and provide market for 23% of the exports of the industrialised countries. The developing world provides a huge potential market if its purchasing power can be increased. Assistance by the developed world should not be narrowly viewed in benevolent terms, but more widely as a good business strategy to expand the markets of the developed world and help to expedite global recovery. This form of partnership is integral to ensuring global prosperity and will go a long way in eradicating poverty and hunger and in achieving the Millennium Development Goals.
The current crisis has further underlined the need for systemic reform of the international financial system in order to enhance its surveillance capacity. We must ensure that a crisis of this scope and magnitude never recurs. Additionally, the system must be reformed to make it more responsive and development-oriented. We need to eliminate the use of conditionalities and allow developing countries the necessary fiscal space to implement national development objectives.
Our reform efforts should seek to institute a well-functioning, rules-based, open, viable, equitable and non-discriminatory multilateral trade regime that promotes development and recognises the diversity in the levels of development and size of economies. Along the same lines, we continue to call for a successful conclusion of the Doha round with the fullest realisation of the development dimensions of the Doha Work programme.
Let me conclude by expressing appreciation and commendation to Ambassador Frank Majoor, Permanent Representative of the Netherlands and Ambassador Camillo Gonsalves, Permanent Representative of Saint Vincent and the Grenadines, a son of CARICOM, for their sterling efforts in guiding the consultation process to a consensual outcome. Indeed, the process is testimony to the virtue of multilateralism and what we can achieve when we work together. While the text is not all we had hoped for, it is a significant victory for developing countries. The text constitutes one of several steps to be taken to improved regulation and monitoring as well as reform of the international economic system. It also calls for a follow-up process – an important undertaking to ensure that our commitments do not fall off the radar.
We must continue to work in a spirit of partnership, openness and inclusiveness, fully aware that all countries – both developed and developing- have to work together to emerge from this crisis. There is a saying in Jamaica that “one hand can’t clap”. As agreed, this Conference is just one of many steps in this direction. Let us resolve therefore to work together in partnership in our quest for a better world.
I thank you.