Mr. Raymond Lim
at the International Conference on Financing for Development
Ladies and Gentlemen,
1 The issue of development financing is not new. But it has been given a sharper edge in recent years with the advent of an increasingly integrated global economy. This is why this conference that we are having is timely. The integration of capital, technology and information across national boundaries is creating a new global economy unlike anything previously encountered. Because globalisation works through ruthless efficiency, with capital and talent gravitating towards where profits can be maximised at reasonable risk, this has generated unprecedented prosperity, but at the same time, has led to increased inequalities both between nations, and within.
2 The issue is not whether we should have globalisation or not. It is whether we manage globalisation well or badly, fairly or unfairly. In this new global economy, we are all developed and developing, inextricably bound to one another by common interests, shared needs and linked destinies. What happens to the poorest citizen in the poorest country can have repercussions on the richest citizen in the richest country. Managed badly, global integration risks marginalising whole economies and millions of people in the developing world. Managed wisely, globalisation can and will lift millions out of poverty, and become the high road to a just and inclusive global economy.
3 History has shown that since the end of the 2nd World War, no country has lifted itself out of poverty without participating in the global economy. Therefore, we can only best help the developing countries by developing their capacity to participate meaningfully in such a global economy, strengthening our cooperation, modernising our international rules and reforming the institutions of economic cooperation to meet the new challenges.
Stability, Investment and Trade
4 Stability, investment and trade are the main long-term drivers of global prosperity. For the Monterrey Consensus to be a success, concrete actions on each and every one of our parts are needed. The international community needs to put together its collective will and wisdom to seek genuine market access for the goods and services of all.
5 Expanding trade could lift at least 300 million out of poverty by 2015 in addition to 600 million escaping desperate poverty with normal growth. Even diminishing by 50% protectionist tariffs in agriculture and in industrial goods and services would boost the world's yearly income by nearly $400 billion. And since three-quarters of the world's poor live in rural areas, opening up agricultural markets offers the best and quickest route out of poverty. Subsidies to agriculture which run at one billion dollars a day - six times development assistance - are in urgent need of reform.
6 It is also clear that massive flows of capital will be required if we are to alter the huge disparities we witness across the globe. FDI flows can assist development. As a mutually beneficial phenomenon; it brings in needed technology, creates employment, generates tax revenues without which programmes to help the poor cannot be financed. But it is also true that both the right domestic conditions and the right expertise are needed to attract FDI.
7 ASEAN as a region has generally sustained an open orientation towards trade and investment. The ASEAN countries continue to view trade liberalisation as an important vehicle for development. Therefore, instead of backtracking from its commitment to free trade, ASEAN brought forward the date by which it will achieve 0-5 per cent tariffs under the ASEAN Free Trade Area (AFTA) from 2003 to 2002. Besides trade, foreign direct investment will also continue to play an important role in invigorating and enhancing the longer-term prospects of the ASEAN economies that have been affected by the crisis. ASEAN has therefore put in place a series of regional initiatives, such as the ASEAN Investment Area, to assure potential investors of the continued viability and vibrancy of the region as an investment destination.
8 Recognising that the future economy will be more knowledge-based, ASEAN has also come together to give more attention to human resource development and bridge the digital divide. Under a new e-ASEAN agreement, ASEAN leaders have agreed to the establishment of a free trade area for goods, services, and investments for the info-com industries so that ASEAN will be able to compete more effectively in the knowledge-based economy.
Sinqapore Cooperation Proqramme (SCP)
9 Of course it would be simplistic to believe that trade and investment alone are sufficient to lift countries out of poverty. Sustainable growth and development depends on many factors. At the domestic level, it often centres on the ability of the government to build the supporting legal, social and economic frameworks, nurture the necessary talents and effectively exploit available resources. There is a critical need for assistance to developing countries in such capacity-building.
10 Having benefited from the technical assistance provided by others during the early years of our development, Singapore recognises the importance of sharing our developmental experiences with other developing countries. Through the Singapore Cooperation Programme and its bilateral and third country training programmes, Singapore has sponsored training courses and study visits for over 15,000 officials from 139 developing countries; providing training in a range of fields where we have relevant experiences to share, including communications and transport, economic development and trade promotion, management and productivity, finance and banking, and information technology.
11 Singapore has collaborated with the World Bank to provide technical assistance to developing countries in fields such as environmental management, budgetary processes, bank management, public administration, urban development and health sector administration. We are also in partnership with the ADB to conduct joint regional capacity building courses for developing countries ranging from tourism, water management to port and airport management. Since its inauguration in 1998, the IMF-Singapore Regional Training Institute has conducted over 50 training courses for more than 2000 participants from developing countries in the Asia Pacific Region. Through these efforts, we hope that despite our limited resources, Singapore can make a modest contribution to the economic growth and progress of our fellow developing countries.
Role of National Governments and International Community
12 Developing countries on their part also need to muster the political will to undertake the necessary structural reforms, which are sometimes difficult and painful, in order to plug into the world economy. While the circumstances facing each country and society may be different, we have found that crucial elements, such as domestic stability, rule of law, transparency, accountability and market oriented policies are needed to provide the necessary climate and infrastructure for sustained economic and social development to take place.
13 While much of the responsibility for change and adaptation lies at the national level, we also need to pull together and address our problems in a global context. One thing that is needed to ensure this, is for the UN and international organisations such as the World Bank and IMF to renew themselves so as to adapt and better respond to the new environment and the challenges that are presented. Today, there is an imperative for them to get together and coordinate their efforts to assess what competencies the poorer nations need to develop in this new era. They should then put in place coordinated programmes to build capacity for globalisation and the knowledge revolution. Doha (WTO), Monterrey (FfD) and Johannesburg (WSSD), provide us the platforms from which we should seek infrastructural development or risk institutional collapse.
14 We have negotiated long and hard to come up with the Monterrey consensus. While it is certainly no mean feat that we have managed to accomplish that task on time and by consensus, history we will be the judge of whether or not this was truly a success. The challenge we face is immense. But all can benefit if each meets agreed obligations for change.
Statements at the Conference