United Nations General Assembly

23 October 2007

 High Level Dialogue

For the

Implementation of the outcome of the

International Conference on Financing for Development

 Statement

by

Dr. Errol Cort

Minister of Finance and Economy

Antigua and Barbuda

Your Excellency Mr. Ban Ki-Moon, Secretary-General of the United Nations,

Your Excellency Dr. Srgjan Kerim, President of the General Assembly,

Honourable Ministers,

Other distinguished representatives:

1. Introduction

My delegation welcomes the opportunity to participate in this high level dialogue on implementation, which we expect will set the tone for the International Review Conference on Financing For Development next year. In 2002 the international community forged a consensus which we hoped would have delivered the scope and scale of financing necessary to achieve internationally agreed development goals. Five years on, there has been little to no progress for the majority of countries and people whom the Consensus was intended to help.

 International finance structures and systems are today significantly more complex than five years ago. Perhaps it’s time for us to get back to the basics and refocus on the original intent and purposes of the Monterrey Consensus, and match the means to the objectives – perhaps then we can make greater progress with implementation at the country level.

 2. Mobilizing international finance for development

Mr. President, Foreign Direct Investment (FDI) remains, in many respects and for many countries including my own, the bedrock source of development finance. For FDI to lead to development much depends on the nature of the relationship between the companies and the domestic environment. Our challenge remains one of broadening the focus beyond the bottom-line to include stimulating job creation and generating revenue, leading to a positive impact on standards of living. We must do a better job of directly linking FDI with increased levels of standards of living.

 FDI on its own does not lead to growth and development. It is therefore imperative for FDI to be placed within the broader sustainable development context; this has not occurred enough over the last five years.

 Investors hedge their risk and in so doing they often choose to look to capital markets that are less risky than small-island states and other small, vulnerable economies.  The international system should help such countries manage risks through, for example, lowering risks to investment in physical infrastructure projects and the provision of capacity building support to create the necessary regulatory framework.

 3. Making trade work for the development of small, vulnerable economies

Mr. President, the declining flows of official development assistance (ODA) to the Caribbean region over the last decade has significantly compounded our development dilemma. Financing appropriate policy responses to challenges created by international and global factors is extremely difficult.

 Small vulnerable economies have few options for a trade-led growth strategy. Experts point to trade diversification, occupying higher value-added points of the production and supply chain, and infrastructural development as vital to such a strategy. Yet, Antigua and Barbuda’s attempt to bridge the financing gap through diversification in the services sector has been extremely frustrating due to the unfair trading practices of major powers.

 In addition, Mr. President, the proliferation of regional trading agreements has been met with mixed feelings.  I posit, however, that the persistent failure of the international trading system forces our countries to look inwards and rely more and more on bilateral and regional trading agreements. We have no choice – the international trading system continues to fail us, the big and more powerful players continue to bully us, meanwhile, development goals remain illusive.

 4. Persistent levels of unsustainable debt

Mr. President, for us, the single most pressing international finance challenge remains reducing the country’s external debt to a sustainable level.

 It is extremely challenging for us to make mid- to long-term development plans, backed by sound economic growth forecasts, in the face of persistent levels of unsustainable debt. It also challenges our ability to accurately forecast social spending beyond the short-term.

 The Secretary-General’s report rightly points out that a sizeable portion of the world’s poor – some 41% -- live in middle-income countries. Yet, woefully insufficient attention has been paid to the unsustainable debt burden of middle-income countries. If this situation persists there is the possibility that today’s middle-income countries will become tomorrow’s low-income countries.

 In this regard, my delegation calls on the international financial community to demonstrate a greater awareness of and sensitivity to the significant debt challenges facing many middle income countries, especially in the Caribbean region, which challenges are primarily precipitated by the vulnerabilities associated with small island economies. We further encourage the international community to be more creative in developing instruments to specifically assist middle income countries that do not qualify for IDA funding, but continue to experience significant development challenges as a result of their high debt overhang.

 5. Conclusion

Mr. President, for several years now we’ve been talking about harnessing the power of globalization for the common good of humanity. Yet there is alarmingly high levels of inequality of income and wealth within countries and among countries. Globalization has been fuelling this divergence, making economic inequality and social exclusion more of a problem today than five years ago.

 Closing the income gap is closely linked to closing the technology gap among countries. It is my delegation’s view that any serious review of Monterrey must address the steps to be taken to scale-up technology transfer to developing countries through adequate provision of financing for information and communication technology and clean technologies for development.

 It is lamentable that, five years after the international compact that was crafted at Monterrey, significant imbalances in the international financial system remain, which militate against the efforts of developing countries. Mr. President, simply put, we will not be able to achieve our development goals without significant changes in the structures that govern international finance.

 At issue is the level of voice and representation of developing countries in the structure of international economic and financial governance. If this does not change swiftly and decisively, in five to ten years we may be back here examining the failures of the international community to deliver on the MDGs.

 Thank you Mr. President.