Dr. Ibrahim Zuhuree
Deputy Permanent Representative of the Republic of Maldives to the United Nations
at the General Discussion of the Second Committee
on Macroeconomic policy questions & Follow-up to and implementation of the International Conferences on Financing for Development
5 October 2023
Thank you, Mr. Chair,
The Maldives aligns itself with the statements made by Cuba on behalf of the G77 and China, and Samoa, on behalf of the Alliance of Small Island States. We also wish to express our gratitude to the Secretary-General for the comprehensive reports submitted under these agenda items to advance our deliberations.
Global challenges have created an environment of growing needs and diminishing resources in developing countries. This situation becomes particularly unsustainable for countries in special situations, such as Small Island Developing States (SIDS). Regrettably, we are falling behind in our pursuit of the SDGs, and finance plays a pivotal role in this setback. As of today, the SDG financing gap stands at a daunting $3.9 trillion, and we are far from closing this gap.
While our path to COVID-19 recovery has been marked by success, it has not been free of challenges. The Maldives' economy suffered a historic 34 per cent GDP decline in the wake of the pandemic. As we continue our journey to recovery, we are confronted with additional hurdles. These include increased pressures on major resources such as food, energy, and finance, coupled with high commodity prices, increasing global interest rates, stricter financial conditions, and geopolitical tensions. These challenges are further exacerbated by the adverse impacts of climate change, loss of biodiversity, and the digital divide. To address these issues, the Maldives has implemented measures to control discretionary government spending. A fiscal reform agenda has also been initiated in an effort to navigate out of this challenging situation smoothly.
Nevertheless, there is a greater role for the international community to play. It is evident that SIDS present a unique development challenge. Climate change among others have a detrimental impact on our debt-to-GDP ratios, greatly slowing down rate of implementation of our medium and long-term sustainable development plans. Additionally, grants and concessional financing available for climate change remain limited, thus forcing countries like the Maldives to resort to more expensive financing, resulting in higher borrowing costs and debt accumulation. In this regard, we welcome this year’s iteration of Financing for Sustainable Development Report, which calls for continued immediate and increased international support for SIDS to realise the 2030 Agenda.
Furthermore, it is essential to highlight that more than 40% of SIDS are either at a high risk of debt distress or on the verge of debt distress. As such, we require tailored solutions as part of an equitable recovery plan, with a particular emphasis on addressing debt relief and concessional financing. We call for an immediate and credible reform of the international financial architecture. This should include reform of the governance of the international financial institutions and multilateral development banks, to strengthen the voice and participation of developing countries, especially the more vulnerable, like the SIDS.
In this regard, we welcome the Secretary-General's proposal for an "SDG stimulus" and the ideas and proposals contained in his policy brief on reforming the international financial architecture.
Moreover, Climate- and debt-vulnerable countries, such as the Maldives, require increased access to concessional resources and grants. We implore all stakeholders to heed the Secretary-General's proposal to utilize the Multidimensional Vulnerability criteria and support the adoption and implementation of the Multi-Dimensional Vulnerability Index (MVI). For us, the MVI serves as a vital tool for securing affordable, long-term financing and obtaining much-needed debt relief for our nations. We advocate for harmonizing funding rules, processes, and applications, including for multilateral funds and climate-related financing. We must ensure LDC-graduated countries are not penalized for non-concessional borrowing undertaken for development purposes, under policies such as the Sustainable Development Finance Policies of the World Bank and Asian Development Bank which leads to setting aside and cancellation of the already limited concessional financing available to SIDS and countries at high risk of debt distress.
Looking ahead, the global community will convene the 4th International Conference for SIDS next year. Despite three decades of targeted development plans for SIDS for our pressing needs, lasting solutions have remained elusive. As the co-chair of the Preparatory Committee for the conference, we are committed to bringing about change this time, with the support of the international community.
In immediate terms, there is an urgent need to expand concessional financing through MDBs and regional development banks for all developing countries. We must also work to reduce the borrowing costs for these nations and allocate new Special Drawing Rights (SDRs).
Developed countries must renew their commitments to their Official Development Assistance targets, upholding the ODA commitments reaffirmed in the Addis Ababa Action Agenda.
We also emphasize the importance of promoting a universal, rules-based, non-discriminatory, inclusive, equitable and transparent multilateral trading system. In this context, we call on all Member States to promptly ratify the Agreement on Fisheries Subsidies so that it can start delivering its benefits for the ocean and the people who depend on it. We look forward to the next Ministerial Conference, which will take place in Abu Dhabi next February. We hope that this Ministerial will bring us closer to disciplining subsidies that contribute to overcapacity and overfishing as well as appropriate and effective special and differential treatment for developing countries. It is worth noting that the Maldives, known for its sustainable fisheries practices, faces significant tariffs on its tuna exports. We believe that the international trade system should recognize and support our sustainability efforts by providing tariff relief, especially in light of the current economic tensions stemming from global conflicts.
In the same vein, developed countries must significantly increase the provision and mobilization of climate finance, for adaptation as well as loss and damage, to go beyond previous efforts. In this regard, we call on developed countries to meet their commitment of $100 billion per year up to 2020 in climate finance and at least double climate finance for adaptation. We believe that of utmost importance in any funding mechanism is the establishment of fast-track mechanisms that enable countries to access financing, technology, and capacity-building support for critical climate adaptation needs.
Similarly, we call upon developed countries to honour their new financial commitments in the biodiversity agenda. We urge them to provide and mobilize resources through the recently established Global Biodiversity Fund under GEF. Their contributions should be commensurate with the financial needs to implement the Kunming-Montreal Global Biodiversity Framework.
In conclusion, Mr. Chair, we are at a pivotal juncture where collective action and international solidarity are imperative for a sustainable recovery. The Maldives delegation is fully committed to constructively engage in this agenda item, with the aim of transforming this vision into a tangible reality.
I thank you.