Economic Affairs

International finance and capital markets

As part of a pilot project, EAD is undertaking an independent monitoring of donor and international financial institution support behind country-owned poverty reduction strategies. The reports from this project make valuable and concrete recommendations to governments, donors and Bretton Woods institutions. The issue of country ownership, participatory policies and home-grown development strategy are still somewhat challenging for some countries. A report on United Republic of Tanzania has been completed and a second on Ghana is under way.

Within the framework of the Commonwealth Private Investment Initiative (CPII), the division has supported the technical feasibility study of a Kula II investment fund for the Pacific region. The target capitalisation for Kula II is US$20 million, and the minimum investment size is US$100,000. The Fund will seek to broaden its investments to include several islands in the Pacific region. The total funds committed in the Pan-Commonwealth Africa Partners fund, a second generation fund for the region under CPII, at the end of November 2004 amounted to US$125 million. Under the first fund for Africa (Comafin), all companies will have exited at good profits by the end of 2006, the end of the fund’s life. Some of the returns are superior to those achieved by other Africa funds and are much higher than achieved on developed country stock markets.

The division was instrumental in launching and continuing a dialogue between all interested parties in the three regions of the Commonwealth directly affected by the paucity of foreign direct investment – Caribbean, Pacific and Sub-Saharan Africa – on the need to facilitate access to long-term financing for small and medium enterprises.

EAD has continued to work for an international consensus on strengthening the heavily indebted poor countries (HIPC) initiative and organised Commonwealth HIPC Ministerial Forums (CHMFs) in Lilongwe (Malawi), London (UK), Dar es Salaam (United Republic of Tanzania), Brunei Darussalam, Freetown (Sierra Leone), Maputo (Mozambique in March 2005) and Barbados (September 2005).

EAD has also promoted consultations and dialogue between the OECD and the Commonwealth jurisdictions affected by the OECD’s Harmful Tax Competition initiative, with the aim of achieving a level playing field.

International trade

The division works with member countries on strengthening their capacities to deal with regional and multilateral trade negotiations: producing analytical studies, policy briefs, facilitating consultations and organising workshops and seminars. For example, it helped countries to prepare for the WTO Ministerial Conference in Hong Kong in December 2005; it is supporting small economies in developing their work programme called for in the Doha Declaration; it is assisting non-resident members attain representation in Geneva; and it has supported ACP states in the EU–ACP negotiations on Economic Partnership Agreements. It continues to assist member states to develop regional integration strategies.

Small states

EAD coordinates advocacy and policy development work on small states, making the case for the international community to provide special treatment to the countries due to their vulnerability. It organises meetings of the Consultative Group on Small States – a forum of senior officials – to discuss issues of relevance to small states. It also facilitated the work of the Commonwealth Secretariat/World Bank Joint Task Force on Small States that produced the report Small States: Meeting the Challenges in the Global Economy which identified how multilateral organisations, including the Commonwealth, could best assist small states in overcoming vulnerability from globalisation. The division coordinates implementation of this report’s recommendations within the Secretariat and since 2000, keeps track of implementation by other agencies. The EAD has also been working closely with the World Bank in organising the Annual Small States Forum held during the annual meetings of the IMF and the World Bank to review implementation of the 2000 Joint Task Force Report. A review of the agenda set out in this report is currently being undertaken to assess whether its analysis and agenda remain relevant, to identify significant small states’ issues and opportunities that have emerged since 2000, and to suggest amendments in light of recent developments. The division publishes the annual Small States: Economic Review and Basic Statistics and maintains a small states website to highlight issues of topical concern to small states and as a means of disseminating policy discussions on critical policy issues affecting them. The Secretariat has also initiated a major project that would lead to the development of a resilience index to support decision-making and the identification of strategies that need to be undertaken by small states to enable them to succeed in overcoming vulnerability.

Environment

EAD has a coordinating role in the Secretariat on environmentally sustainable development and follow-up to the World Summit on Sustainable Development. It organises meetings of environment ministers (the Commonwealth Consultative Group on Environment) in the margins of UN meetings, and coordinates the Secretariat’s contribution to the implementation of the Habitat Agenda on Human Settlements. It does this through organising the meetings of the Commonwealth Consultative Group on Human Settlements and its participation in the ComHabitat partnership which uses multi-stakeholder approaches to support implementation of the Habitat Agenda. The Commonwealth Secretariat continues to play an important role in development of the Iwokrama International Rain Forest Programme in Guyana. It supports member states in developing legal frameworks to support the implementation of multilateral environmental agreements such as the UN Convention on the Law of the Sea, and delivers advisory services, technical assistance and capacity-building through CFTC to support the sustainable management of natural resources.

Economic management

The division promotes good governance in economic management and develops strategies to combat corruption and money laundering. It led the work of the Expert Group on Good Governance and the Elimination of Corruption in Economic Management and it is participating in Secretariat-wide activities of implementing the Framework for Commonwealth Principles in Promoting Good Governance and Combating Corruption endorsed by Commonwealth Heads of Government. The division facilitated the process of establishing the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG) and supports the group’s work programme, including holding some regional workshops to address anti-money laundering and combating financing of terrorism issues. It has also published the revised model of Combating Money Laundering and Terrorist Financing: A Model of Best Practice for the Financial Sector, the Professions and Other Designated Businesses which is to be used for training and awareness raising workshops among member countries to be organised in collaboration with FATF-style Regional Bodies.