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Statement by Ambassador Shigeki Sumi
Permanent Mission of Japan
Financing for Development
Sixty-third Session of the United Nations General Assembly
16 October 2008
Let me begin by affirming that the Government of Japan attaches great importance to the issue of financing for development and therefore to the upcoming Follow-up International Conference in Doha. My delegation has complete confidence in the leadership of the Co-Chairs as we proceed with the review process, and is therefore participating in the ongoing negotiations actively and in a constructive manner. In particular, my delegation believes that the Co-Chairs will ensure that the outcome document is balanced, that it maintains a ministerial tone, and that it is brief. I would now like to share with you some of the major principles to which my government believes we should adhere to in addressing the issue of financing for development.
Financial resources certainly constitute a major building block in the whole development process. At the same time, I believe that there is more to realizing sustained growth than merely making financial resources available by the international community. There should be a strong sense of ownership by developing countries. International partnerships are most effective when they are aligned with the principle of ownership. Resources should lead to tangible advancement of human security in developing countries, to the empowerment of individuals and communities, and to the inclusiveness of economic growth. We also believe, based on our own historical experience, that nation-building is people-building. That this is true is amply borne out by recent stories of the success some countries have achieved in realizing self-reliant and sustained economic growth by promoting trade and investment through capacity-building and human resource development.
One of the virtues of the Monterrey Consensus is its emphasis on involving all relevant stakeholders. Synergies between public and private funding can lead to the creation of jobs, technology transfer, and trade-and-investment-driven economic growth, which cannot be achieved by ODA alone. In this regard, the catalytic role of public funding in mitigating risks and encouraging private sector investment needs to be underscored. This approach is especially effective in infrastructure development.
Let me also underline the importance of shared responsibility in advancing development. Development partners should join hands to promote good governance and sound macro-economic policy, and construct a business-friendly environment. By the same token, all development partners and investors should comply with relevant international norms and act responsibly.
In this regard, the new international aid architecture should be taken into account. In his report, the Secretary-General estimates that aid from non-traditional donors now contribute roughly one fourth of global aid flows. South-South investment flows constitute one fourth of FDI inflows to developing countries. Assistance should be carried out in line with the principles of the Paris Declaration on Aid Effectiveness. FDI should be made in a socially responsible manner. Above all, all creditors should respect international frameworks and give due consideration to debt sustainability through responsible lending.
Finally, allow me to say a few words on the relationship between the current financial turmoil and financing for development. The deterioration of financial markets that has occurred in the past few weeks may seriously damage the economies of developing countries. The contraction in global credit will have a detrimental effect on private sector capital investment, which in recent years has contributed to economic growth in such countries. There will be a shortfall in the resources necessary for infrastructure investment, which supports economic growth, as well as spending on education and health, which are indispensable for the development of human resources for the future. Such a tightening in credit will also pose further problems for the mobilization of the resources needed to develop social safety nets for the poor. In this context, Japan is of the view that addressing global financial crises, and helping member countries cope with those crises, both lie at the heart of the IMF's raison d'etre as an international institution. The IMF should be responsible for providing financial assistance, and should seriously consider how to fulfill this responsibility. If the IMF requires additional resources, Japan stands ready to supplement needed funds.
At the World Bank/IMF Joint Development Committee meeting which took place in Washington last weekend, the Japanese delegation asked the Bank to actively and creatively consider all possible options, without being constrained by existing frameworks, in order to minimize adverse effects on developing countries.
The conditions surrounding the current international financial situation are changing daily. On the other hand, the Monterrey Consensus deals with medium-to-long-term challenges. Therefore, it would be inadvisable to focus only on the urgent short-term agenda in the review process. My delegation proposes that if we are to add language in the outcome document that deals with the current financial crisis, we should do so at a later stage of the negotiations, taking into account the latest developments.
Thank you very much.
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