Statement by the Republic of Maldives
on Agenda Item 23: Groups of Countries in Special Situations
New York, 29 October 2015
The Maldives aligns itself with the statement made by South Africa on behalf of G77 and China.
Let me start by taking note of the Secretary-General's report on the implementation, effectiveness and added value of smooth transition measures. (A/70/292)
It has now been four years since the graduation of the Maldives from the United Nations List of Least Developed Countries. The Maldives was ofcourse proud to graduate; no country wants to be defined as a “least” anything. When we graduated, the international community had limited experience with graduation, as only two countries had done so before us. But now it is an opportune time to look back and see the effectiveness of UN system support for graduating countries, and after.
The experience of graduation for the Maldives was far from smooth. The existing smooth transition process, while looking good on paper, did not work well in practice. There are no plans to deal with recently graduated countries, so that their development gains do not backtrack. We saw that it became increasingly difficult to access official development assistance and concessionary financing. Major markets erected tariff and non-tariff barriers to Maldivian products.
The structural challenges faced by the developing countries and especially the least developed countries in achieving the internationally agreed development goals are immense. Some of these challenges include poverty, unemployment, inequality and high indebtedness, access to markets and achieving economies of scale.
The current determining indicators in the process, such as the Gross Domestic Product do not reflect holistically the advancement or the vulnerabilities of a society. It may measure how wealthy a country is: but it doesn’t reflect the purchasing power of that wealth. It doesn’t reflect how resilient the country is to shocks. It doesn’t address unique circumstances of each country, and their specific challenges. The current graduation criteria only ask that countries meet two of the three thresholds: Maldives never met the economic vulnerability target. Maldives has the the eleventh highest EVI among a group of 130 developing countries, largely on account of the country’s high exposure to shocks due to the small size of its population, the share of population living in low elevated costal zones and high export concentration.
Yet, it was somehow assumed that our high GDP per capita, which is not the most accurate measure in any case, would allow us to attend to any shocks. And this assumption was proven wrong, when in 2004, 6 days before we were originally set to graduate, the Indian Ocean Tsunami hit the Maldives, inflicting damages costing more than 60% of the GDP. Our graduation was delayed, as the basis for our graduation no longer existed. And sadly, we have seen this pattern in many of the recently assessed countries for graduation.
The Maldives is also a Small Island Developing Country. And this is a category we can never graduate from. This unique status comes with a unique set of challenges. We have limited natural resources, small populations and small economies. We are remote, highly dependent on imports, and therefore extremely vulnerable to economic shocks. We also suffer from high dependence on one economic sector and like other SIDS it is extremely difficult to maintain the value chain due to high costs of transportation and production. Climate change, extreme weather events and the ever-increasing frequent disasters threaten our survival and viability.
As a SIDS, our climate adaptation costs are high, placing additional burdens on already tight budgets. Our populations are small, which means even with the most efficient tax collection systems, domestic resource mobilisation will never be enough. Our private sector is often built on micro, small enterprises. In the Maldives people live on 188 separate islands, and only 20 of them have populations exceeding 2000. The Government has to provide all basic services, and invest in infrastructure that is necessary to sustain the development gains that allowed us to graduate in the first place. Not being an LDC, we are unable to access concessionary financing, forcing us to borrow at unsustainable interest rates. This strain on financing is leading to greater debt burdens, with debt to GDP ratio estimated to reach 85% in the coming years.
Ever since our first assessment for graduation, the Maldives has repeatedly called attention to the inadequacy of the graduation criteria. This has been substantiated by academic and empirical evidence. After our graduation, we have repeatedly called attention to the inadequacy of the smooth transition process, and the support given to recent graduates. Yet nothing substantive has been done.
In the Addis Ababa Action Agenda, and the 2030 Agenda for Sustainable Development, there have been calls for alternative measures of development, and for better treatment of countries with economies in transition such as the graduating LDCs. With more countries being assessed for graduation, the sustainability of the development gains being made by these LDCs must be a priority too. Smooth transition processes are meant to give incentives and support the graduation process to not jeopardize the developmental gains of the countries that graduate.
In essence, it must be an obligation of the international community, in particular the United Nations, to ensure that the progress made by graduating countries is not reversed during the transition process, and that inherent vulnerabilities are not disregarded. And we therefore support calls for more institutionalised and coordinated support for countries graduating, and in the lead-up to the graduation from LDC status.