Deputy Secretary-General's remarks to General Assembly Conference Side Event: "Recovering from Global Crisis : Towards an Action Plan for Africa and the Least Developed Countries"

Honourable Foreign Minister of Bangladesh,

Members of the Panel,

Ladies and Gentlemen,

It is a pleasure to welcome you to this side event on the impact of the economic crisis on the world's most vulnerable countries. I thank all involved in bringing us together for this timely discussion.

Some observers speculated that African and other developing countries might find themselves insulated from the crisis because of their relative isolation from international capital markets. We know now that this indeed was not the case.

Already, African economies are experiencing a growth crisis. While the magnitude and depth of the impact has been uneven, the continent as a whole has seen growth prospects reduced from an average rate of 6 per cent in recent years to less than 3 per cent growth in 2009.

Given Africa's high rate of population growth, per capita income will shrink for the first time since 1994. The more fragile and low-growth economies are at particular risk.

The crisis poses a real threat to hard-won gains in boosting growth and achieving progress toward the Millennium Development Goals. Indeed, the financial and economic crisis could rapidly become a human and social crisis, with severe political implications.

The impact can be seen in many ways. Export volumes, commodity prices, remittances, tourism, foreign direct investment and foreign aid are all under pressure. This in turn affects public revenues and expenditures, and compounds the sizable negative fiscal impact of the food and fuel crises.

Widening budget deficits and current account gaps pose a serious threat to the macroeconomic stability that many countries have achieved after years of sound economic policy and structural reforms. African and other LDCs also face reductions in bank lending and domestic financing.

I would also like to underline the gender dimension of the crisis. Women are seeing drastic reductions in income and in the budgets they manage on behalf of their households.

Dear friends,

Much needs to be done to mitigate the adverse impact of the crisis and return to the path of progress. There is a need for safety nets and other social protection measures. African countries need to recover ground in implementing NEPAD sectoral priorities, in particular in agriculture and infrastructure.

African countries have responded at the regional and national levels with stimulus packages, targeted assistance and other steps. Some countries have introduced reforms aimed at boosting domestic resource mobilization. Others have sought to increase liquidity in the banking system.

African Ministers of Economy and Finance have pledged to strengthen accountability and the regulation of financial institutions, harmonize policies, diversify export structures and improve debt management.

However, financial constraints limit the range of policy measures that African nations and other vulnerable countries can adopt. This is where the international community can play an important role.

The United Nations system has pooled its assets to help the poor and vulnerable. We are working with our multilateral partners to implement the recommendations of the MDG Africa Steering Group. And we will soon launch a Global Impact and Vulnerability Alert System to monitor the effects of the crisis in real time.

G8 leaders should complement this work by ensuring that the 2005 Gleneagles aid commitments are met. The G20 reaffirmed these commitments in April. Yet with less than a year until the 2010 deadline, annual aid to Africa remains at least $20 billion below the Gleneagles targets.

Donors need to spell out how they will scale up. The “Gleneagles scenarios” show how aid can be translated into development results at country level. I urge donors to give these plans their full support.

We know what needs to be done. We know where additional resources can yield the greatest returns. Let me outline some of our highest funding priorities:

? We must close the gap between needs and resources at the Global Fund to Fight AIDS, TB and Malaria and the Global Alliance for Vaccines and Immunization;

? We must establish a pooled mechanism to ensure that subsistence farmers can obtain the inputs they need to boost farm productivity and access markets;

? We must enhance health systems for the poor, with a particular focus on emergency obstetrical care;

? We must fill the resource gaps in the Education for All–Fast-Track Initiative and in related funding streams to ensure universal access to primary education;

? We must extend local improvements in water and sanitation to more regions;

? And we must address the major gaps in access to clean energy.

Dear Friends,

In Africa, and across the developing world, we have abundant evidence that aid can help transform lives. Despite constrained private capital flows and falling revenue from trade and remittances, aid must remain a central part of the global development agenda.

However, we must also recognize that aid works best in concert with market forces. We must therefore also help developing countries gain and maintain access to markets by concluding the Doha development round of trade negotiations.

We must also increase the resources available for the Aid for Trade initiative, in order to create employment and increase production capacity.

African States and the least developed countries face a deepening human and development crisis. A variety of fora and processes have developed initial responses to the crisis. The General Assembly conference taking place this week can build on that progress.

The proposed redesign of the international financial architecture provides another opportunity to address the crisis. African countries and the LDCs should be better represented in forums where important decisions that affect their economies are made.

Ladies and Gentlemen,

In the broadest sense, we need to see a new multilateralism take hold –one that is defined by stronger global cooperation, so that we can enter 2010 and the decade beyond with the financial crisis behind us, a climate change agreement in hand, and renewed progress towards the MDGs.

These achievements can restore global hope, mutual trust and solidarity, and build a renewed foundation for increased security and peace in Africa and across the developing world. I look forward to working with you in this endeavour.

Thank you very much.