Opening Speech - Commonwealth Finance Ministers Meeting

It is with great pleasure that I speak to you tonight here on the beautiful island of St Lucia. I am doubly glad because it was the events of 9/11 which caused the cancellation seven years ago of the 2001 Commonwealth Finance Ministers Meeting here. We all very much appreciate the Government of St Lucia’s willingness to host us on this occasion, after that first great disappointment.

Within the diverse membership of the Commonwealth, you can find an example of just about every economic phenomenon. We have members directly experiencing the global credit crisis, and we have members who experience it as it ripples outwards.

We have oil exporters gaining from recent high oil prices, and we have countries whose macroeconomic stability is threatened by those same prices. We have countries with food for markets, and we have countries with markets and no food.

So, as we meet here, the key question is: with all this diversity of experience and perspective, what have Commonwealth Finance Ministers to offer to each other and to the world?

One part of the answer lies in our capacity to make the best possible use of our diversity.

The Commonwealth breaks down the silos of different regions and different income levels, and allows policy analysis and understanding to spread globally.

In a world where the old ideological polarities are breaking down – east against west, north against south – it is also organisations like ours – diverse in membership, but united in values – that have a crucial role in driving global consensus.

Your predecessors as Commonwealth Finance Ministers introduced policies which may initially have seemed like heresy, but which later became orthodoxy. Examples are bilateral debt relief, multilateral debt relief, and the sequenced approach to capital account liberalisation. In each case, it was the Commonwealth’s ability to provide a space for discussion that allowed reflection and imagination to flourish.

We have also carried forward that work practically. Our debt management software is now used beyond Commonwealth countries, even in China. Our Private Investment Initiative has generated millions of dollars of new investment into the Pacific, Caribbean, and Africa, and is doing ground-breaking work on investment for small and medium sized enterprises. Our studies of the vulnerabilities and resiliences of small states have had a defining impact in protecting some from premature graduation from LDC status. The list of practical work to underpin the day-to-day work of Finance Ministers and their Ministries is long, and is a source of collective Commonwealth satisfaction. Decisions made in these meetings, based on our diversity, do make a difference.

Let me highlight three other Commonwealth defining characteristics.

The first is solidarity in expressing respect for human dignity.

Realising human potential is the foundation and purpose of politics and public policy. Poverty and degradation are the antithesis of this. The scale of poverty in the Commonwealth remains shocking – over a third of our citizens live in absolute poverty. The Millennium Development Goals have given us the framework to enhance human dignity and realise its potential.

The Commonwealth stresses a communal interest in the MDGs. We are genuinely commited to one another. We say that partial globalisation is failed globalisation. We have always paid particular interest to the needs of the smallest and most vulnerable. In the context of the MDGs, this means that we value their delivery, not in the aggregate, but everywhere individually. It also implies mutual support.

Commonwealth Heads of Government discussed this together only two weeks ago at a special meeting in New York. They reviewed the MDGs at the half-way stage, and acknowledged the progress made. They recognised that the Goals can be reached. But – and it is a big reservation – only with significant effort on all sides, for the necessary resources and systems to be in place. They also recognised that all the volatility we see in the financial sector at the moment will have an impact.

But from that, they concluded that this is not the time to draw back from the timetables established by donors for raising the levels of their Overseas Development Assistance, or from developing states continuing to pursue reform and improved governance. Now, more than ever, donors need to honour their ODA commitments in full.

The second distinctive Commonwealth quality is its commitment to multilateralism.

One of our hallmarks is a commitment to finding collective solutions to collective challenges. No single country has all the answers, and no country can act alone. All have a shared stake in progress irrespective of size and endowment.

The world is changing rapidly, with more and more global output coming from emerging economies outside the advanced economies. Managing an orderly transition will require strengthened commitment to multilateralism.

The present state of the Doha Round trade negotiations is especially regrettable. We all know that trade is a sure way out of poverty. We also know that the global community committed itself in 2001 to achieve a Development Round – supporting developing countries in benefiting from trade through a transparent, universal rules-based system. Failure to achieve this puts all countries at risk.

The third area of Commonwealth distinctiveness is inclusiveness – the natural counterpart to multilateralism.

The core of this is the regard that Commonwealth members have for each other. 32 of the 53 members of the Commonwealth are small states, the majority being island states. Ensuring that the international system pays proper attention to the interests of these countries has been one of the Commonwealth’s signature achievements.

We recognise that international support for ideas and for policies to benefit all of humankind require universal international treatment. The agenda for tackling today’s global problems and solutions will only come with effect and impact from inclusive exchange and consultation, and with no party being marginalised.

Today’s concerns about food, agricultural, and energy price escalation and volatility are cases in point. We meet here with a fairly clear sense of the causes. What we do is discuss and identify the impacts, learn lessons and exchange ideas, options and best practice. It is an inclusive approach from which all can win.

Last year, for instance, Finance Ministers considered the economic impact of climate change on small states. At long-term stake are the comparative advantages and economic opportunities of these countries. Their very livelihoods are under threat.

This is all the more important since these are ‘open’ economies, and highly dependent on trade in those sectors most directly vulnerable to the effects of climate change – like agriculture, fisheries and tourism.

Here in the Caribbean, we are often reminded of the devastating impact of climate change. And it is where the Commonwealth’s approach – of matching concern with deeds and practical action – is further illustrated.

It has long been recognised that there are gaps in the system of dealing with natural disasters, and the Commonwealth is playing its part in filling them. Our Heads of Government gave us a clear message at the CHOGM in Kampala last year that we should renew our efforts, and we have done exactly that.

Firstly, the Secretariat is helping to develop capacity in planning so that governments can respond better when a natural disaster strikes.

Secondly, through the Commonwealth Disaster Management Agency – the CDMA – there is work in hand with global corporations on a portal that will support governments and individuals at these times of crisis. Imagine the potential if every cell-phone user – a resident or a visitor – could receive alerts and advice before and when disaster struck. This is on track to becoming a reality.

Natural disaster insurance is a third area. The challenge remains to get the finances and economics of insurance schemes right – history has shown that many schemes are not sufficiently responsive or durable. I am pleased that the CDMA is also working on an insurance scheme in partnership with a major global bank, and they will hopefully soon be knocking on doors with their proposal.

The final area I want to highlight unites the themes I have mentioned of human dignity, multilateralism and inclusiveness. It is the reform of international institutions.

The multilateral institutions are one of the great achievements of the global settlement following the Second World War. Dean Acheson – the American Secretary of State in 1944 – spoke of the sense of being, ‘present at the creation’, when they were founded.

It has never been more important to recapture that initial spirit. But the international community faces a paradox. Expectations of the institutions have never been higher, but the potential for them to deliver is diminished by the pace of change in the world; by the restrictions of the mandates of these bodies; and by their inherited governance structures.

Commonwealth Heads of Government recognised all this in Kampala last year. A small group of them then met in London earlier this year to set out principles for guiding the reform of any global institution. That group also identified fundamental reform of the Bretton Woods institutions as one of the areas in which the Commonwealth should work. This view was supported by the wider membership when Heads met in New York two weeks ago. And they tasked you –our Finance Ministers – to take this forward. It is a huge responsibility, and it will hinge upon building consensus amongst the membership.

In the modern world, where global economic and political power is distributed more widely than at any time in human history, there is an ever greater need for places where countries can debate as equals. We concentrate on the process; we do not prejudge the outcome.

No group – not the Commonwealth, nor the G20, nor the G8 – can determine the outcome of such a reform process alone. Yet we can offer the insight and wisdom of one third of humanity. That is a powerful voice: our goal is to build a more detailed Commonwealth-wide consensus from a truly participative process, and then to globalise it. The Commonwealth can contribute to this globalisation of collective wisdom.

Ladies and gentlemen, please allow me to end with one – related – postscript.

Just as the 1940s saw the foundation of so many of those other global institutions, the decade also saw the birth of the modern Commonwealth. In 1949, our London Declaration was signed.

So next year, we will be celebrating our 60^th anniversary, and focussing on our own renewal and our own sense of identity. We will look back positively on the Commonwealth’s achievements and service over six decades, but we will also look at how we can and should support future generations. We will be promoting activities at the national level and also at the pan-Commonwealth level.

For instance, each Head of Delegation will find a coin tomorrow next to their country nameplate. We invite you to consider a proposal that each country could mint a national coin or stamp, or both, to mark the anniversary. We would be delighted if you all saw fit to take part in this powerful initiative – to bring the Commonwealth to the people, so that they have the Commonwealth – its associations and its values – quite literally ‘in their pocket’ or on their table.

Distinguished guests, ladies and gentlemen, this is a critical time in the global economy. But underlying all the debates will be the Commonwealth’s distinctive understanding of the need for collective solutions to global challenges; the way it values alternative viewpoints; and its determination to deliver for all. I am delighted that you are all here to contribute to that undertaking.

Thank you.

Ends