Mr. President, Mr. Moderator, Excellencies, Ladies and Gentlemen,
I am pleased and honored to be invited to speak at the MEDays Forum 2010. First allow me to extend my gratitude to the hosts for organizing this excellent event, and to the Amadeus Institute and its President, Mr. Ibrahim Fassi Fihri, for the generous invitation and the warm welcome and hospitality I have received since I have arrived in Morocco.
The topic you have selected this year: ‘The South: Between crisis and emergence” could not be more opportune to assess the growing role played by economies of the South in international relations. Some of them have managed to emerge from the global economic and financial crisis more quickly than developed economies. Their capacity to adapt to the crisis has allowed them to be the driving force of the global economic recovery. Their economic growth has also allowed them to progress rapidly in their social indicators. The improvement of these indicators in India and China, to name just two countries, has positively affected the global fight against poverty. Poverty has fallen from 46 per cent in 1990 to 27 per cent in 2005 in all developing countries. However, these successes are not equitably distributed. The majority of African countries and the Least Developed Countries, which I have the honor to represent in the United Nations System, do not partake in this progress yet.
Ladies and Gentlemen,
In 2000, world leaders gathered at the UN Headquarters in New York to adopt the Millennium Declaration, thereby committing their nations to a global partnership to reduce extreme poverty by 2015. The eight Millennium Development Goals cover key economic and human development issues and provide the international community with a unifying framework to fight poverty and under-development. This September world leaders once again gathered in New York to take a clear-eyed view of progress achieved so far and at the challenges that continue to confront us 10 years after the historic pledge. The report card which emerged from this Summit-level meeting was somewhat mixed.
One year ago, at the same occasion, I told you that 18 of the 20 bottom countries of the Human Development Index are African. The latest Human Development Report has just been released on 4 November, and sadly the situation remains mostly unchanged. Of the 20 countries at the bottom of the list, 19 are African (with the sole exception of Afghanistan) and 19 are least developed countries (only Zimbabwe is not an LDC). None of them have progressed since the last Report was published in 2009.
The World Bank estimates that the economic and financial crisis of 2008 will push a further 100 million more people into extreme poverty by the end of 2010, most of who live in sub-Saharan Africa.
According to the Food and Agriculture Organization of the UN, an estimated 925 million people will go hungry this year, a majority of which live in sub-Saharan Africa and South Asia.
Ladies and Gentlemen,
Africa can point to a number of successes in its strive to achieve the Millennium Development Goals, such as access to primary education (76 per cent of children are in school), gender equality, access to safe drinking water (72 per cent) and female representation in elected bodies. On the other hand, maternal mortality rates remain alarmingly high in sub-Saharan Africa. A woman in sub-Saharan Africa has a 1 in 16 chance of dying in pregnancy or childbirth, compared to a 1 in 4,000 risk in a developed country – the largest difference between poor and rich countries of any health indicator. Child mortality has been reduced by one third in the last ten years, short of the two thirds target. Access to sanitation is still limited to less than 50 per cent of the population and less than 20 per cent in rural areas.
This is not to say that achieving the MDGs for African countries, and in particular in the world’s 49 least developed countries, should remain elusive. But if we are to succeed in this endeavor, a greater political commitment and effort is required from African countries themselves and their development partners, both from the North and from the South.
In fact, the international community has responded to these challenges by accelerating its efforts to support developing countries, and Africa in particular. The G-8 has promised to mobilize additional funds promoting maternal and child health in the Muskoka Initiative to accelerate progress in reducing child mortality and improving maternal health, the two goals which were at the center of the MDG Summit in New York in September. The challenge is actual delivery on these promises. Other initiatives, such as the UNITAID Fund, aim to mobilize resources for the MDG priorities through innovative funding mechanisms.
Furthermore, South-South cooperation has opened new perspectives and complements traditional North-South cooperation. The benefits of South-South co-operation are visible on many fronts. Today, 40 per cent of FDI from countries of the South goes to highly vulnerable countries, many of which are just emerging from conflict. Partly as a result of Africa’s increasing trade with China, India, the Republic of Korea, Brazil and other emerging economies we now expect African economies to rebound quickly from the financial crisis and to grow by 4.3 percent annually in 2010. In addition to these flows of finance, trade and development assistance, we have witnessed a marked increase in knowledge and technology transfer across the south.
As I have stressed before, this new cooperation is not however a substitute for traditional development cooperation. It is a necessary complement.
In light of the destitution many of the populations of developing countries find themselves in, it is necessary to rethink the principles and modalities of the global partnership against poverty and to adopt a more inclusive approach in our decision-making and in the creation and redistribution of wealth.
To this purpose, we have to first evaluate the principles that guide international cooperation. Cooperation was always based on solidarity and equity. Recent developments in international relations have however shown that there is a national, regional and international security imperative in addition to these principles. Transnational crime, violent extremists, and drug and human trafficking find fertile soil in fragile states and states ravaged by conflict. Piracy off the coast of Somalia and drug trafficking in West Africa are just two of numerous examples we have witnessed recently. For this reason, the fight against poverty has become a question of national and international security. Development support to poor countries thus becomes an investment in international security.
The modalities of development cooperation are still appropriate. However, they have to be adapted and improved to fully reflect the challenges we face today.
Development aid has to reach the levels that were promised: 0.7 per cent of GDP of donor countries (currently 0.3 per cent). And it has to be distributed in a more equitable way between the social and the productive sector.
Debt reduction through the HIPC and MDRI has been granted to more than 30 African countries. By the end of 2008, debt worth more than US$ 103 billion had been relieved and the benefiting countries were able to increase social spending by more than 2 per cent annually. As a result, the ratio of debt service to export earnings has decreased from 27 per cent in 2000 to 12 per cent in 2008. The ratio of debt to GDP is no higher than 20 per cent, as compared to 70 per cent earlier. These significant gains have to be consolidated and secured by preventing a renewed ballooning of debt.
Foreign Direct Investments (FDI) increased from approximately US$ 9 billion in 2000 to US$ 88 billion in 2008. The crisis in 2008 has led to a fall to 39 per cent in 2009. Macroeconomic reforms and improvements in the legal investment frameworks in both Africa and LDCs explain this positive development. At the same time, these numbers still represent less than 5 per cent of global investment flows. In order to render FDI more effective, they have to target sectors that generate employment and sectors that have strong linkages to the rest of the economy. They have to maximize local value added and must be accompanied by technology and know-how transfer.
Despite preferential treatment and duty-and quota-free access, Africa and LDCs still represent only 3 and 1 per cent of global trade respectively. Much remains to be done in this regard.
Profits and income generated by migrants would be even more beneficial to their countries of origin if they where channeled towards productive investments.
The limits of traditional development cooperation have become very clear. It therefore has to be strengthened and complemented by new and innovative initiatives in order to achieve the MDGs and to reduce poverty in these countries. Which could be these additional measures to achieve a truly inclusive approach for integrated development?
First, we need a state which adopts a developmental approach in its social and economic policy. The developmental state needs to be proactive and focus its economic policies on poverty reduction while creating the conditions for healthy competition and assuming its regulatory role. Such policies include the introduction of social safety nets, investments in sectors that generate decent jobs, provision of access to universal basic services, ensuring an equitable distribution of income and wealth, and the consideration of gender, youth and the disabled in all its policies. In addition, LDCs have to be more fairly represented in international decision making bodies, especially in those areas that are of direct concern to them.
The second element consists of ensuring sustainable growth, which is a precondition to securing the gains made in social indicators. Sustainable growth depends on a number of key factors (which are not highlighted in the Millennium Declaration but which figure prominently in the Brussels Programme of Action): strengthening of productive capacities and political and economic governance, mobilization of domestic and international productive investment, and trade integration with the rest of the world.
Only the strengthening of productive capacities will allow developing countries to access markets of its development partners. In this regard, it is my belief that the development of human capital is the first priority. Human capital development has to be accompanied by the production of affordable energy, technology transfer, and basic infrastructure to attract FDI.
While the provision of these productive capacities is a necessary condition for attracting FDI, it is not a sufficient one. Developing countries also have to continue to improve the business climate in their countries. The investing countries on the other hand should adopt measures to support investment in vulnerable countries, such as investment guarantees, preventing double taxation, the establishment of counterpart funds for national investments, and market access.
The investments have to lead to quality production at competitive prices, and ensure that value is added locally to primary products, thus creating wealth and decent employment in the national economy. Vulnerable countries also have to have access to certain safeguard measures to protect their infant industries. They also need some flexibility with regards to intellectual property rights in order to develop their own research and development capacities.
The production of higher value-added products and services will allow for more meaningful regional and international market integration. Developing countries will need their development partners’ support to access knowledge to ensure that their exports conform with international standards, provide access to trade credit, open their markets and provide preferential treatment to products from vulnerable countries. They also have to modify and simplify rules of origin regimes so that LDCs can forge partnerships with emerging countries without losing their preferential market access. The rules of global commerce have to be transparent, equitable and predictable.
The strengthening of productive capacities will enable Africa and LDCs to realize their full potential in the agricultural sector, manufacturing and in services sectors.
Ladies and Gentlemen,
To conclude, I want to reiterate that the current modalities of international development cooperation do not suffice to achieve the Millennium Development Goals. They have to be complemented by productive investments generating wealth and employment and by the integration of vulnerable countries into the global trade regime in a fair, equitable and transparent manner. The resources provided through Aid for Trade and the Enhanced Integrated Framework will contribute to strengthening trade infrastructure. The early harvest of elements of the Doha Development Round on which agreement already exists (trade facilitation, production and export subsidies) could also be an important factor.
Regional integration and the strengthening of South-South cooperation are another means of ensuring integrated development in the most vulnerable countries. They depend on the support of their development partners to implement all these measures.
Ladies and Gentlemen,
The strengthening of productive capacities, trade as the engine of growth, and the green revolution are indeed the priorities of the Fourth UN Conference on the Least Developed Countries.
As you know, this Conference is scheduled to take place at the Heads of State and Government level in Istanbul, Turkey from 9 to 13 May 2011 and will gather participants from 192 UN Member States, parliamentarians, the private sector and civil society. 6,000 participants, among them more than 60 Heads of State, as well as the Secretary-General of the United Nations will attend.
In my function as the Secretary-General for LDC IV, I invite your respective countries to participate at the highest possible level.
I thank you for your kind attention.