Commonwealth Finance Ministers to Hold Press Conference at Hong Kong Convention Centre on 20 September 1997
9 September 1997
Finance Ministers from five of the fifty-three Commonwealth countries, including G7 member Britain, will hold a press conference in Room 311/312 at 9.00 a.m. on Saturday, 20 September at the Hong Kong Convention Centre, prior to the meetings of the Interim and Development Committees of the International Monetary Fund and World Bank, respectively. Both organisations are holding their annual meetings in Hong Kong.
Those taking part will be the Rt Hon Gordon Brown, Chancellor of the Exchequer, Britain, the Hon P Chidambaram, Minister of Finance, India, the Hon Dr Vasant Bunwaree, Minister of Finance, Mauritius, the Hon Trevor Manuel, Minister of Finance, South Africa, and the Hon Brian Kuei Tung, Minister of Finance, Trinidad and Tobago. The Commonwealth Secretary-General Chief Emeka Anyaoku will act as Chairman.
The Ministers will arrive in Hong Kong directly from the annual meeting of Commonwealth Finance Ministers which is being held in Mauritius from 16 to 17 September.
They have been delegated the task of reporting on the outcome of the Mauritius meeting and proposals they intend to pursue in Hong Kong.
Note to Editors: Please see attached Background Note for details.
Commonwealth Finance Ministers' Press Conference
Hong Kong, 20 September, 1997
BACKGROUND NOTE ON ISSUES
The challenges of globalisation and special issues related to attracting, sustaining and coping with private capital flows are likely to receive a high priority in the deliberations of Commonwealth Finance Ministers this year. This issue has taken on a new urgency following the recent turbulence in financial markets of South-East Asia. A Working Group of Senior Commonwealth Finance Ministry Officials met in London earlier this year to consider the role of national and international policies in encouraging private capital flows for investment. Their views reflect a wide variety of experience, from industrial countries, emerging markets, from some of the world's most dynamic and competitive economies to some poor countries that have yet to benefit from globalisation. Commonwealth Finance Ministers are expected to consider the recommendations of the Group relating to the measures that national governments and international organisations can take to facilitate private capital flows; to minimise the risk of sudden surges in capital movements; and to cope with surges should they arise. They would also be focusing on ways to promote greater flows of private capital, particularly to those countries that are at risk of marginalisation ? and in putting in place multilateral arrangements that help to cushion countries against volatility in capital flows. Potential volatility in capital flows, as demonstrated by the current crisis in South-East Asian financial markets, also has implications for the sequencing of reforms and speed of capital account liberalisation, an area which the IMF is expected to oversee. Ministers are expected to discuss the steps that governments should take before opening their capital account.
Commonwealth Ministers will also give attention to the recent initiative to provide multilateral debt relief for heavily indebted poor countries (HIPCs). A concrete proposal for multilateral debt relief was first launched at the Commonwealth Finance Ministers Meeting in Malta in 1994. Following this initiative there has been a growing recognition and eventual agreement by international financial institutions to tackle the multilateral debt problem. Implementation of the Initiative commenced when Uganda became the first beneficiary earlier this year. There are however serious concerns that funding for the Initiative is not yet in place. Finance Ministers are expected to stress the importance of ensuring that HIPC relief is adequately funded in order to remove any pressures that limit the eligibility for debt relief. A decision on partial sale of the IMF's gold holdings to meet the large shortfalls in bilateral contributions may need to be reconsidered to bridge the gap in financing on the IMF side. Ministers are also expected to discuss maximising flexibility in the timing of relief to enable a larger number of countries to reach debt sustainability as early as possible; improving the analytical basis for debt relief eligibility; and mechanisms for enhancing debtor ownership of implementation of the Initiative.
Ministers will also focus on IDA. Its commitments declined last year by almost 33 per cent, the sharpest decline recorded in recent history. IDA credits to Africa have dropped to an all-time low and this at a time when IDA's role has become even more crucial in view of the continued reductions in overall ODA flows. A concept of selectivity based on performance has been introduced but the criteria for its application is not wholly transparent. Ministers are also likely to discuss ways of ensuring adequate funding of IDA and its longer-term sustainability. Much of IDA is now being funded by reflows and transfers of net income from IBRD while contributions from donors have been declining. This is undermining the burden sharing arrangements and increasing IDA's dependence on resources drawn from IDA recipients and bank borrowers.
The special topic of the Finance Ministers' meeting will be the politics of managing economic change. Ministers will exchange views on a range of Commonwealth experiences in this area and examine the role of good governance in economic management. The Ministers will also be focusing on special initiatives to promote trade and investment among Commonwealth countries.
Following the successful launch of the US$63.5 million Commonwealth Africa Investment Fund in July 1996, the Ministers will be endorsing the launch of a Fund for the Pacific islands, the Kula Fund, which became operational in August this year with initial capital of US$15 million. Ministers will also discuss proposals for the US$100-150 million South Asian Regional Fund which is being marketed at the moment as well as the conclusions of initial market studies for a fund to cover Commonwealth countries in the Caribbean.
Note to Editors: The Commonwealth consists of 53 member countries from each of the world's regions. It includes among its members two G7 countries, some of the dynamic newly industrialising economies of the Far East, and some of the poorest, most populous and smallest countries in the world.
The Commonwealth's 53 member countries are: Antigua and Barbuda, Australia, The Bahamas, Bangladesh, Barbados, Belize, Botswana, Britain, Brunei Darussalam, Cameroon, Canada, Cyprus, Dominica, The Gambia, Ghana, Grenada, Guyana, India, Jamaica, Kenya, Kiribati, Lesotho, Malawi, Malaysia, Maldives, Malta, Mauritius, Mozambique, Namibia, Nauru, New Zealand, Nigeria, Pakistan, Papua New Guinea, St Kitts and Nevis, St Lucia, St Vincent and the Grenadines, Seychelles, Sierra Leone, Singapore, Solomon Islands, South Africa, Sri Lanka, Swaziland, Tanzania, Tonga, Trinidad and Tobago, Tuvalu, Uganda, Vanuatu, Western Samoa, Zambia and Zimbabwe.
97/45 9 September 1997
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