Mr. Frederick Pitcher
Chairman of the Delegation of the Republic of Nauru

at the 
International Conference on Financing for Development

Monterrey, Mexico 
21st March 2002

I will begin simply by stating that my country, officially the world’s smallest republic, attaches a great deal of significance to this conference and to the Financing for Development process in general, primarily because of the pivotal role it could play in facilitating the integration of small economies like my own into the world economy. It can do this not only by opening up financing opportunities for us where none existed before but also by supporting existing initiatives geared specifically towards our development.

In this respect, my delegation welcomes the reaffirmation at this conference of the Barbados Programme of Action for Sustainable Development of Small Island Developing States and also the call for the implementation of the commitments made in Doha to examine issues related to the trade of small economies.

We accept that domestic resources remain the primary source of financing for development. However, as well documented in the twenty-second United Nations special session on Small Island Developing States, structural frailties and institutional incapacity continue to constrain us, forcing continued reliance on official development assistance. The poverty of opportunity means that without the important function of donors and investors, small island developing States cannot presume a painless transition into the new global economy. Unfortunately, such patronage has become fewer and farther between. 

Wealthy countries have to live up to their obligations and commitments, while economies that have outgrown their aid dependence should themselves begin contributing to the progress of others less well off. This latter point is important, because there were and are countries willing and able to do just that. Excellent examples include Japan, the Republic of Korea, Singapore and the Republic of China. 

Aid was particularly critical to Taiwan1 whose experience from its early years before it became the world’s seventeenth largest economy has not been forgotten. Today, Taiwan contributes more than $200 a year to the official-development-assistance pool. We should be encouraging such involvement, not politicizing it.

As the world economy continues to undergo rapid change, small-island economies are being forced to fundamentally change the way in which we view our economic relationship with the rest of the world. As global trade becomes increasingly integrated under the World Trade Organization (WTO) umbrella, small economies like Nauru face a number of daunting challenges, including dealing with the erosion of preferential market access for our very limited number of exports. This raises questions of whether we can afford the cost of joining the WTO and conversely whether we can afford not to and the difficulties in trying to diversify and develop niche markets in areas where we have comparative advantage, whatever those turn out to be. The challenges will not be easily overcome without significant structural change, and that much we acknowledge. 

We also recognize that we need technical and financial assistance to help us make the difficult adjustments. But to be clear, we are not asking for charity. We are asking for help to help ourselves so that we might at least have a decent chance.

Some small economies have very little access to development assistance and have been forced to look at alternative means of generating income. Instead, the donor community has hog-tied those of us who look to generate such resources through offshore financial centres and other innovative schemes. Some of the world’s smallest and least endowed economies, including Nauru, have been identified under the harmful-tax-practices initiative of the Organization for Economic Cooperation and Development (OECD) and are being sanctioned by the financial action task force. We are doing our best to meet their ever-changing demands. But it is important, of course, that the OECD be committed to consultative and inclusive process that allows for a mutually accepted outcome and a level playing field for all. The OECD should therefore ensure that its own members follow the rule first. Indeed, this should apply to all conditions set by donors. Let them lead by example.

Finally, the initiatives announced by the United States and the European Union during the course of this conference are positive developments indeed. But the momentum generated here must be carried forward meaningfully. The World Summit on Sustainable Development will be the first test of our resolve to translate our commitments into reality. Let us not waste that opportunity.

1. The statement has been reproduced as received. The designations employed do not imply the expression of any opinion whatsoever on the part of the Secretariat of the United Nations concerning the legal status of any country, territory or area, or of its authorities.

* The text of this statement has been transcribed from audio recordings as the original was not submitted to the Secretariat.

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