The Republic of Maldives on behalf of the Alliance of Small Island States
Agenda Item 18: Macroeconomic Policy Questions and
Agenda Item 19: Follow up to and Implementation of the Outcomes of International Conference on Financing for Development
11 October 2018
- I have the honour to deliver this statement on behalf of the Alliance of Small Island States (AOSIS). We align ourselves with the statement delivered by the distinguished representative of Egypt on behalf of the Group of 77 and China.
- Allow me to thank the Secretary General for his reports on this agenda item and the speakers this morning for their valuable insight. This agenda item on financing for development, trade, the international financial system and debt sustainability is arguably the economic backbone of the 2030 Agenda and we welcome the opportunity to discuss these issues in greater detail.
- The Second Committee of the United Nations is the primary forum for providing political guidance on global financing and economic matters, especially as they relate to financing the SDGs. However, given the complexity of the global financial system and expert bodies that deal with specific concepts, we need to work more closely with other actors in our work in this Committee. Closer interaction with IFIs, financial regulators, Regional Commissions, and other relevant bodies will be beneficial for two reasons: one, to provide them with more targeted and actionable political guidance that they seek, and two, to reaffirm the important position that this Committee holds in the international economic and financial architecture, especially in setting norms.
- The SG’s Report notes that risks in the global economic outlook have been growing. Trade tensions between major economies and associated spillover effects, monetary policy adjustment in developed countries, elevated debt levels and an increase in geopolitical tensions are posing growing significant threats. Global financial markets are increasingly more unstable, with exchange rate volatility intensifying in many developing countries, and severely hurting their economies. For small island developing States that are highly vulnerable to external economic shocks, this is worrying.
- SIDS are the first to feel the effects of external shocks – both economic and environmental, and take the longest to recover from them. Indeed, as we are still in the process of recovering from the devastating impacts of the 2017 Atlantic hurricane season, the need for incorporating risks from climate change into our deliberation are ever clearer.
- We remain deeply concerned at the lack of implementation of key aspects of the Addis Ababa Action Agenda. Decreasing trends of Official Development Assistance, especially as a percentage to SIDS, is discomforting. We reaffirm that ODA is a critical component of development aid and we urge the international community to urgently fulfill these obligations.
- As countries with narrow resource bases, distance from markets, geographical isolation, and dependency on imported goods and services, international trade is a critical aspect of our economic growth. We therefore reiterate our call for a fair and rules based multilateral trading system that rejuvenates global trade and growth, harnesses the benefits of trade and development in a way that is economically, socially and environmentally sustainable and inclusive.
- In this regard, we also reaffirm the centrality of the WTO to the multilateral trading system. We remain concerned at the lack of progress on the issue of fisheries subsidies. The SG’s Report notes that the lack of delivery on multilateral solutions to fish subsidies will maintain the existence of harmful incentives to harvest already depleted fish stocks. For SIDS, this does not just hurt our economies, but also endangers entire fishing industries for next generations. Coupled with depleting fish stocks due to climate change, the lives and livelihoods of SIDS are at stake.
- Debt distress in SIDS has evolved into one of our most severe challenges. The SG’s Report notes that debt stocks of SIDS have more than doubled between 2017 and 2018, and some SIDS are facing debt to GDP ratios well in excess of a 100 percent. This is extremely worrying – especially given the fact that most SIDS are middle income countries not eligible for instruments that could ease debt distress or have limited access to concessionary financing for development needs. Due to these underlying challenges, and the high vulnerability of SIDS to climate change risks, the report also stresses the need for further attention to the issue of debt sustainability in SIDS. We have long advocated for a revision to GDP plus criteria to gauge eligibility for concessionary financing and continue to call for reforms on this issue.
- We remain committed to the vision of the Addis Ababa Action Agenda and in this regard engage in a spirit of cooperation at the ECOSOC Forum for Financing for Development. We welcome the efforts of enabling the Forum to make meaningful follow-up efforts to the Addis Agenda and hope to further strengthen the Forum in the future.
- Financing issues at stake are high and multifaceted when it comes to realising our ambitions of Sustainable Development Goals, and require the combined efforts of the FFD Forum as well that of the second committee. Let me once again wish you all a productive session and thank you for your attention.