The Hon. K. D. Knight
Minister of Foreign Affairs and Foreign Trade of Jamaica

at the
International Conference on Financing for Development

Monterrey, Mexico
18th-22nd March 2002

Mr. President

When world leaders met for the United Nations Millennium Summit, they gave renewed political impetus to establishing a more equitable international financial and monetary system, and creating an environment that is more conducive to sustained economic and social development. 
The critical situation of escalating poverty throughout the world has been a pressing issue demanding our full attention and collective action as an urgent priority of the world community. Globalization and the widening disparity between the developed and developing world dictates the need for some coming together to assess where we are and how we should plan for the future. In this Conference on Financing for Development we bear witness to the reaffirmation of the universally shared commitment of meeting the challenges of the Millennium Development Goals. These goals will not be achieved without urgent and substantial improvements in the mobilization of national and international resources.

It cannot be emphasized enough that endemic poverty and underdevelopment in their manifold manifestations pose dangers which transcend geography and therefore stability and international security. The issue of development is therefore one of global concern and shared responsibility. Solutions have to be found and they are best arrived at through a cooperative effort within the framework of the United Nations. Our goal should be to seek to build an economic order which promotes equity and provides each nation with the opportunity to enjoy the benefit of economic development and progress. The principal message from this historic initiative is the importance of a comprehensive approach to the mobilization of resources for development and the need for greater flexibility and partnerships that ensure that divergent needs are taken into account.

All of us recognize the importance of good governance in harnessing and attracting capital resources through prudent policies promoting macro-economic stability, efficiency and facilitating the expansion of the private sector as the engine of growth But experience has shown that this is not enough. Over the past 20 years, in many developing countries, substantial reforms were undertaken and painful social sacrifices made under structural adjustment and other programmes toward economic liberalization, deregulation and privatization. Yet the expectations have not been realized. Even where some mobilization of domestic savings have resulted, inflows of foreign direct investment have not made up for the insufficiency in domestic savings. There has been no significant change in the overall pattern of capital flows which remain heavily concentrated and confined between developed countries and a few strategically placed developing countries. It seems evident to us that some special initiatives may have to be undertaken to broaden the investment flows through special incentive programmes in developed countries.

The other vehicle for effective transfer of resources is through international trade. Free trade and the opening of markets has been heralded as the new dynamic for generating export surpluses and inflows of capital to service the development process. However persuasive may be the theoretical arguments, the trade regime under the WTO Agreement has proven to be not more than a mixed blessing. Reductions in tariffs have been accompanied by the inposition of non-tariff barriers and those of us who have benefited from preferences are now placed in jeopardy in relation to major agricultural exports. Above all, the simple fact is that most developing countries lack the productive capacity and are unable to reach the level of competitiveness to benefit from the opening of overseas markets while at the same time they are losing ground in their domestic markets to foreign competition. The truth is that it is the developed countries that are reaping the benefits of free trade while developing countries continue to struggle to compete with the dominant economies.

The other factor is debt which remains a heavy burden in developing countries and a crippling drain on domestic resources desperately needed for development.

What all of this means, Mr. President, is that in the current realities, we are imperilled when we simply rely on the invisible hand to ensure any equity in the distribution of resources and benefits. It becomes the survival of the fittest; the rich grow richer, and the poor, poorer or remain stagnant.

It is therefore important for the international system to take into account this reality and arrange for compensatory mechanisms. It is in this context that concessionary financing through multilateral institutions and through ODA assume significance as strategies to correct the disequilibrium in the international economy. These capital flows remain an important source for capacity building in the physical and social infrastructure as well as a source for the alleviation of poverty spawned by underdevelopment.

Mr. President, in the face of these immense resource problems, the Monterrey Consensus which is before us for adoption, can only be regarded as a modest response which falls short of the needs of the moment and the expectations of developing countries. It should, however, mark a beginning and serve as a base on which to build further, developing partnerships based on its principles and moving forward to more ambitious programmes of cooperation. On this basis we can accept the Consensus in a spirit of optimism but placing great emphasis on the implementation of the commitments made, in particular in relation to the agreed ODA target of 0.7% of GNP. We congratulate those countries which have already attained that target and urge other developed countries to follow their good example. We also emphasize the importance of the strengthening of coherence in the international system through regular interaction involving the international agencies in the field of development in the annual meeting of ECOSOC of the United Nations.

It is our expectation that this process will increase the levels of sensitivity to the needs of developing countries; broaden the vision of development beyond the dogma of free markets; increase appreciation of the diversity of experience and economic circumstance in the world community; and contribute to a new thinking on development prescriptions based on concrete realities. We also see these new institutional arrangements as part of the process of reform of the system of international governance, providing greater participation of developing countries in decision-making affecting international economic relations. This is the direction that the Monterrey Consensus should lead us and as such it would give meaning and significance to the document as a milestone in multilateral relations. All will be lost if the commitments are not faithfully implemented.

On this basis, Jamaica joins in the covenant towards building a global alliance for development. We are resolved to remain engaged to ensure follow-up in all aspects of the implementation of the Consensus. It will be a test of the international political will to provide the requisite resources and put in place the appropriate mechanisms to achieve the objectives of poverty reduction and sustained growth, and to ensure that the benefits of globalization are more evenly distributed.

This is an important moment in time for the international community. Let us together, take the next step forward.

Thank you, Mr. President.

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