HE Dr Ali Naseer Mohamed, Permanent Representative
On Globalization and Interdependence (d): Development cooperation with middle-income countries (Maldives)
13 October 2017
Thank you Mr Chair,
The Maldives wishes to align itself with the statement delivered by Ecuador, on behalf the Group of 77 and China. I would like to convey my appreciation to the Secretary General for his very insightful and timely report on this agenda item.
The Middle Income Country category is a paradox. It has countries with some of the largest, and the most diversified economies in the world, to some of the smallest, in terms of the size of the GDP, relying on just one or two industries. The Maldives was among the first to graduate from LDC status to a middle-income country. Yet, the middle-income country status does not protect the country from exogenous shocks or equip the country with any additional instruments to bounce back from such shocks.
When a small island state, with a small and extremely dependent economy, with just one or two industries, is graduated from LDC category, the country becomes more vulnerable. It becomes more likely to be impacted by externally induced shocks. And it is less able to overcome challenges. This is because with graduation the country is no longer eligible for ODA, it does not get access to concessional financing, or export markets. These challenges make newly graduated small economies, more vulnerable than they were in the LDC category. That is the irony of graduation. That is precisely what the Maldives experienced when the General Assembly decided to graduate the country on 20 December 2004. Just six days after, on 26 December 2004, the Indian Ocean Tsunami hit the country. The damaged it caused, in a matter of just a few minutes, was more than 62 per cent of the country’s GDP. The Asian tsunami hit several other countries, too, and the destruction it caused was probably far greater. And yet, the damage, as a percent of GDP, was much smaller in those countries compared to the Maldives. The short and long term financial and economic impact on the Maldives took several years to recover. That is what one natural disaster would do for a small economy. That is what our fellow SIDS in the Caribbean are currently going through. And that is what we believe the United Nations can address with far greater seriousness and engage in a more meaningful way in helping the middle income countries to gain concessional access to finance and markets for their exports. As the SG’s report also notes that classification based on income for concessional financing do not reflect on the multifaceted nature of development challenges of middle income countries.
Despite the enormous challenges that we were confronted with in the immediate aftermath of the graduation from the LDC category, the Maldives moved forward with renewed determination: we focused in building our own national resilience, we established strong and mutually beneficial partnerships with new and emerging economies. We experimented with new policy instruments, most of which, worked extremely well for the Maldives. What the small island developing states, that are in the middle income country category, such as the Maldives, seek are, opportunities. For us development cooperation should come in the form of opportunities for trade, opportunities to attract new investments, and opportunities to bounce back whenever we face exogenous shocks. Then only development cooperation will serve a meaningful purpose for small middle income countries.