Second Committee - Agenda Item 17 and 18: Macroeconomic Policy Questions and
Follow-up to and implementation of the outcomes of International Conferences on Financing for Development
Statement by the Republic of Maldives
United Nations, New York, 21 October 2016
Let me begin by aligning ourselves with the statement made by the distinguished representative of Thailand on behalf of G77 and China and by the Maldives on behalf of AOSIS. I also wish to thank the Secretariat for all the documents and reports under this important cluster.
If 2015 was the year of resolve then 2016 is the year of implementation. We witnessed many "firsts" this year, including the convening of the ECOSOC Forum on FFD Followup. Regardless of the challenges all of us faced when we came to the subsequent outcome document resulting from the Forum, it was a historic event nonetheless.
The Addis framework, in many ways, reaffirms the special case of Small Island Developing States like the Maldives, to development financing. For one, the three dimensions of sustainable development, including the environmental dimension, was for the first time integrated to fully align with the social and economic ones. We cannot find sustainable solutions to end poverty, without first addressing climate change. Importantly, the commitments made with reference to oceans, illegal fisheries, clean energy and disaster risk reduction, are also encouraging, and are of particular importance to the Maldives. Our economy is one with the ocean economy, and these global goals have a direct bearing on our livelihoods. However, all these pledges will amount to nothing without proper review and follow up mechanisms, including through the work on its implementation in the second committee, apart from the FFD Forum.
The Maldives is a nation that consists of more than a thousand small tropical islands that straddle strategic shipping routes of the Indian Ocean, and it has a richly diverse marine environment. With more territorial sea than land, nature-based tourism and fishing are the main engines of economic growth. While in the early 1980s, we were among the world's 20 poorest countries, for much of the last three decades the Maldives has been a development success story. Today, we are an upper middle-income developing country with a per capita GDP of over $7000.
But GDP levels tell only one part of the whole story. Since graduation from LDC status, there have been challenges in accessing concessional and preferential financing schemes. Large scale financing is not available any more at affordable rates for essential infrastructure projects that the country needs to maintain the development trajectory.
We have increasingly been faced with an economic downturn of our own. The Maldives entered the global economic crisis of 2008-2009 in a weak macroeconomic position. At the onset of the crisis, our economy crumbled as tourism-related revenues declined sharply. Our fishing industry has been severely hurt due to dwindling fish stocks because of climate change, ocean acidification and illegal overfishing elsewhere in the Indian Ocean. The country's fiscal position has been under much stress following the tsunami of 2004 and continues to weaken in the face of global financial meltdown. Deficit financing has been increasingly challenging in the face of limited financing options.
As is the case with many of us SIDS, debt sustainability is a critical issue, which threatens to reverse all our developmental gains. Debt crisis is costly and disruptive and is often followed by cuts in public spending. There is no path to growth and no achievement in poverty eradication with unsustainable debt overhang. Debt relief and sovereign debt management are therefore crucial issues. In this regard, the international community should urgently examine options for an effective, equitable, and development friendly debt restructuring and international debt resolution mechanism.
In conclusion, I would like to stress the need for a stable global financial system that is open and transparent - which in our opinion is the precursor to achieving the Sustainable Development Goals in its entirety.
I thank you