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Excellencies,
Distinguished participants,
Ladies and gentlemen,
It is a great pleasure for me to be among you at this important gathering. I am particularly grateful to the Vice-President of ECOSOC, His Excellency Abdulkalam Abdul Momen, and DESA for inviting me to moderate such a uniquely important panel discussion and for their efforts in advancing the cause of LDC development. It is a pleasure also to see in this event many distinguished and well-briefed policymakers from LDCs and their development partners.
Excellencies,
LDCs face important structural impediments to economic growth and development. Removing these constraints requires, among others, resources that far exceed available resources in these countries. Estimates of the additional resources vary but generally suggest that a sizeable amount of financial inflows is needed to accelerate growth and development in LDCs. In addition to the magnitude of the needed financial resources, the effectiveness of and the modalities through which these resources are mobilized are equally important.
The importance of adequate resources for the development of LDCs clearly re-emerged in context of several global events and initiatives that have taken place since the beginning of the Millennium.
Principal among these are the Millennium Development Goals (MDGs), the Brussels Programme of Action for LDCs and Monterey Conference on Financing for Development, the Doha Conference on Financing for Development and a series of G-8 and subsequently G-20-led initiatives and the recently adopted Istanbul Programme of Action. These initiatives resulted in a number of commitments by the donor community to deliver more and better aid, to channel a substantial share of these flows to LDCs and to enable them achieve sustainable debt levels.
These commitments were matched by pledges from recipient countries, including LDCs, to scale up efforts aimed at mobilizing domestic resources and working towards an improved environment that would ensure better value for money from these resources. Besides aid, other traditional sources of financing, particularly private flows such as remittances and FDI, also received great attention in these initiatives.
Excellencies
The deployment of these international initiatives has also been accompanied with a series of new and innovative mechanisms to mobilize the additional resources that are needed to bridge the resource gaps. These mechanisms, which have come be known as “innovative sources of finance”, take many forms, including levies, taxes, voluntary contributions, insurance schemes, thematic global trust funds and distribution systems for global environment services. Although these sources of finance hold a great potential for growth and development in LDCs, there are some concerns about how additional they are and how their often sector-specific nature matches with priorities and needs of LDCs
The burgeoning of these initiatives occurred against a background of important developments both in LDCs and across the world. The first relates to the recent global economic and financial crisis. As this crisis unfolded, LDCs’ exports receipts dropped and financial flows, including FDI and remittances, to this group of countries decreased significantly, therefore compromising their ability to remove key structural impediments to growth and development. The post-crisis challenge before many of LDCs is therefore one of generating and mobilizing adequate resources that are required to steer these countries into a long-term development path.
The other major event is the fundamental changes in which the global economy has entered, particularly with the growing economic prominence of emerging economies such as Brazil, India, China and Russia, and their growing financial and trade ties with LDCs in the context of South-South Cooperation. Such changes have brought opportunities, in the areas of additional financing for development and trade, but also new challenges to LDCs. An important challenge is to ensure that these new and growing trade and financial linkages contributes to building productive capacities and accelerating structural transformation rather than locking LDCs into production structures that entail lower economic growth and development or into remaining sources of raw materials solely.
The third contemporaneous development is climate change. The deployment of adaptation and mitigation measures in LDCs requires, among other things, additional substantial financial resources. Climate change finance is gaining traction, although still attending only to a small proportion of the needs of LDCs. The challenge is both to increase the volume of resources available, particularly for LDCs, in the context of climate change and to ensure that these countries can fully tap into existing and emerging climate-related funding mechanisms, including the Clean Development Mechanism.
Addressing all these challenges related to development financing in LDCs requires national and international responses, hence calls for strong partnerships between LDCs and their development partners and harnessing South-South and triangular cooperation. This is acknowledged in the Istanbul Programme of Action.
Excellencies,
Distinguished participants,
Ladies and gentlemen,
The special event provides us with the opportunity to add our insights on the subject matter. These insights will help shape the contribution of this substantive session.
At this juncture, I am pleased to introduce our distinguished panellists, who are so well briefed about the issue of development financing in the context of LDCs, namely
H.E. Mr. Gyan Chandra Acharya, Permanent Representative of the Federal Democratic Republic of Nepal to the United Nations and Chair of LDC Global Bureau,
Mr. Jeffrey D. Lewis, Director, Economic Policy and Debt Department, World Bank
Mr. Jean-Marie Paugam, Deputy Executive Director, International Trade Centre (ITC)
Mr. Vicente Yu, Program Coordinator, Global Governance for Development Program, The South Centre
With these few reflections and remarks, I am pleased and honoured to hand over the floor to our first panelist to share with us his perspective on the issue at hand.
I will first turn to H.E. Mr. Gyan Chandra Acharya.
You have the floor, Excellency.
[Afterwards give the floor in the following order:
Mr. Jeffrey D. Lewis, Director, Economic Policy and Debt Department, World Bank
Mr. Jean-Marie Paugam, Deputy Executive Director, International Trade Centre (ITC)
Mr. Vicente Yu, Program Coordinator, Global Governance for Development Program, The South Centre]
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