27 MARCH 2002

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Relieving the world’s poor

Finance Minister John Dalli last weekend addressed the International Conference on Financing for Development in Monterrey, Mexico. Following are extracts from his speech, in which he called for the implementation of the Heavily Indebted Poor Countries Initiative and for the enhancement of trade capacities of developing countries.

During the past decades humanity has witnessed unprecedented socio-economic development, which has enhanced the lives of millions of people. It is a disconcerting reality that the benefits of this development were not evenly distributed amongst all regions of the globe. We are witnesses to the unfolding reality that the divide, between the comfortable and the deprived is widening. We are seeing the poverty trap engulfing more and more of the earth’s population.

We are here today because we know this to be unacceptable and because we want to try to act in an effective manner to redress this situation.

Malta firmly believes that, through the necessary political will and commitment, the Millennium Declaration development goals, which enjoy the support of the general membership of the United Nations, could succeed in containing the scourge of poverty by the year 2015.

The Monterrey Conference should strive to achieve a comprehensive agreement on the financial mechanisms necessary to achieve the noble goals enshrined in the Millennium Declaration. However let us not presume that financial mechanisms alone are sufficient to achieve the changes in culture, the upgrading of the human resource, the strengthening of the economic fundamentals, the capillary expansion of the distribution channels and the infrastructural build-up that are required to achieve the Millennium goals.

It is my government’s firm belief that only functioning governments, broadly committed to sustainable development could significantly accelerate poverty eradication. The achievement of adequate levels of financing for development requires, first of all concrete actions at the national level to maximise the mobilisation of domestic financial resources.

This is witnessed in the development of an environment founded on the tenets of democracy, respect for the rule of law and human rights as well as the promotion of peace and security are prerequisites for achieving socio-economic progress. We believe that good governance, sound macro-economic policies, transparency, adequate domestic institutions, sustainable fiscal balances, coherence, social safety nets and the fight against corruption as crucial for building the right environment, which harnesses domestic financial resources.

However, we do recognise that some countries have specific constraints and vulnerabilities. These include Least Developing Countries [LDCs], Land-locked Countries and a number of Small Island Developing States [SIDs]. They face huge difficulties in generating sufficient domestic financial resources.

In this regard, developed countries should realise that a sound international financial and economic environment is essential to support their own efforts to achieve sustainable development.

A sound domestic environment is imperative in promoting and encouraging private sector initiatives as well as to attract international financial resources including Official Development Assistance, Foreign Direct Investment and trade opportunities. In the latter context, we must strive hard to renew those commitments which were previously made in the meetings held in Marrakesh, Singapore, Geneva and recently in Doha, to help LDCs secure beneficial and meaningful interpretation in the multilateral trading system and the global economy. It is our firm belief that international trade plays a major role in the promotion of economic development and the alleviation of poverty. In this context we appeal for the removal of barrier to exports and the elimination of trade-distorting subsidies.

We are noticing with some apprehension that developed countries which are the main motors of the global economy seem to have lost their nerve and are building protective barriers around their home markets. This when they continue to assume an aggressive stance towards trade liberalisation to open foreign markets to their businesses.

Trade is an engine which activates growth in developing countries. Developing countries need to enhance their capacities in view of future World Trade Organisation (WTO) negotiations in order to promote a level playing field in the international trading system. They should be assisted in doing so.

In the context of laying the groundwork for sustainable development, one should not overlook the importance of debt relief. Every effort should be made to ensure the implementation of the Heavily Indebted Poor Countries (HIPC) Initiative.

Notwithstanding its limited dimension, insularity and lack of natural resources, the development process in Malta has yielded positive results. Since its independence my country, through sheer resolve as well as investment in human and institutional capacity-building, succeeded in harnessing its domestic financial resources and in attracting adequate levels of international private flows and trade opportunities. These have significantly contributed towards sustaining development in the Maltese Islands. Political stability, sound macroeconomic policies a well-educated and skilful work force have proved to be the basic elements for the promotion of sustainable development.

In a rapidly emerging globalised world, national crises may have ripple effects impacting whole regions. This contagious influence calls for adequate mechanisms aimed at enhancing existing opportunities and ensuring an equitable distribution of the benefits emanating from a globalised economy.

It is only through synergistic efforts at both the national and international level that nations can achieve a sustainable future for all.

Copyright © Network Publications Malta.
Editor: Saviour Balzan
The Business Times, Network House, Vjal ir-Rihan San Gwann SGN 07, Malta
Tel: (356) 21382741-3, 21382745-6 | Fax: (356) 21385075 | e-mail: editorial@networkpublications.com.mt