Asia-Pacific High-Level Consultation on Financing for Development
Delivered at the Asia-Pacific High-Level Consultation on Financing for Development in Jakarta, Indonesia
Your Excellency, Dr. Bambang Brodjonegoro,
Minister of Finance of Indonesia,
Welcome to the Asia-Pacific High-level Consultation on Financing for Development.
I am delighted today to see such strong participation by senior ministers, central bank governors and policy-makers from almost 40 countries, together with representatives of the private sector, civil society and our development partners.
My thanks go to our co-hosts, the Ministry of Finance of Indonesia, and to our co-sponsors: the Asian Development Bank, the Asian Development Bank Institute, the United Nations Development Programme, the Government of the Russian Federation, and the Green Technology Center-Korea, for their support and participation.
The purpose of this consultation is to solicit your views on financing for development. This is the second round of discussions, following our event in Jakarta last year. As mandated by the General Assembly, the Economic and Social Commission for Asia and the Pacific (ESCAP), has organized this platform with our key sponsors. These deliberations will provide regional inputs and perspectives to the Third International Conference on Financing for Development, in Addis Ababa in July.
Our regional consultation anchors itself in the broad objectives and contours of the draft Addis Ababa Accord, which builds on the Monterrey Consensus. The Accord offers a futuristic global framework for financing, which is supportive of sustainable development. Addis Ababa will not be a pledging session, but is intended to encourage commitments to a set of concrete proposals, as well as to call for the strengthening of global partnerships.
Excellencies, Ladies and Gentlemen,
Significance of Asia-Pacific Perspectives
These Asia-Pacific consultations are critical given the significance of our region, which has emerged as a driver of the global economy and its recovery, and which should be the engine of future growth.
Along with spectacular progress in some economies, however, others are lagging behind. As a consequence of uneven development across countries, the distribution of financial resources and needs has become skewed in our region. Demographics and rapid urbanization have added to the demand for infrastructure, and placed additional stress on the environment. Untenable pressures on our natural resources have increased regional vulnerability to natural disasters, which is exacerbated by global climate change.
What is promising is the diversity and rich experience of our region in terms of what works and what doesn’t work in finance. The Asian financial crisis provided an opportunity for Asia to strengthen its financial regulatory frameworks, and this transformation continues. The leading and emerging market experience of the region shows the world the way forward on development.
Our region is home to a high proportion of middle-income economies, with large infrastructure and social deficits, accompanied by environmental stress. At the same time, we have a number of countries with special needs, the LDCs, LLDCs and SIDS, which require greater assistance and larger FDI flows to support productive investments and lift the standard of living in low-income and weaker economies.
Development and financing innovations - in infrastructure, social services, and climate support - have been features of the region, albeit not sufficient to fully transform the lives of all people. Our strengths however lie in our pragmatism and the practicality of our development and financing solutions.
Drawing from the lessons of our past, the Addis Ababa Conference prioritizes the debates on financing for development. Centrality has been assigned to ownership of the agenda; financial sector stability and diversification; innovation; as well as the role and dynamism of the private sector, which currently accounts for almost three fourths of total Asia-Pacific investment.
Excellencies, Ladies and Gentlemen,
Priorities for the Consultation
Moving to conduct of this consultation, I propose a focus on six core areas, prioritized to add value to the zero draft of the Addis Ababa Accord, which has already been circulated to you:
- Reaching understanding on the importance of and scope for domestic resource mobilization, as the cornerstone of the financing for development strategy and the key to addressing social disparities and inequalities;
- Concrete suggestions on mechanisms that increase the effectiveness and efficiency of financial markets in channeling the vast pool of regional savings and providing long-term funding for major infrastructure in support of sustainable development. Such suggestions could include agreement on how best to move forward on capital market development;
- Recognition that private and domestic public finance is no substitute for official development assistance (ODA), which must still play its essential role, particularly for the region’s least developed countries;
- The need for a more efficient approach to trade finance, regional trade cooperation and integration, through a comprehensive free trade agreement encompassing the whole of Asia and the Pacific;
- The up-scaling of climate finance commitments through enhanced domestic financing, mainstreaming climate considerations in national budgets, and creating institutional and risk management frameworks which encourage the private sector to redirect existing financial flows towards climate mitigation and adaptation; and
- Ensuring that a stable and resilient platform for finance is in place, by addressing systemic global issues and strengthening domestic regulatory policies and institutions.
Excellencies, Ladies and Gentlemen,
In conclusion, there is no other region in the world that is better-placed to shape the means of implementation for post-2015 development than Asia and the Pacific. Recognizing new realities, this round of deliberations offers us the opportunity to explore approaches and modalities to:
- Tap the large and growing pool of global and regional savings to leverage development;
- Enhance regional cooperation and integration mechanisms, and build on the success of growing intraregional trade in Asia-Pacific;
- Foster regional financial integration to mobilize cross-border flows as well as to develop regional financial markets;
- Unleash the strong potential of the private sector, including its financing expertise and resource strengths, to shape infrastructure transactions with effective risk management techniques;
- Enhance South-South collaboration to reinforce the sustainable development agenda and to supplement ODA and other flows to the region;
- Promote delivery and result-oriented global partnership; and
- Draw on the region’s resources and institutional savings, to establish newer vehicles for effective financial intermediation for development.
In our discussions we will need to address some of the wider debates that continue about the context and content of the Addis outcomes, especially on issues such as:
- The approach and scope – e.g. how the financing framework deals with sector finance and cross-cutting areas, as well as how climate finance is treated, given the position of some countries that this is better deliberated exclusively in the UNFCCC track;
- The need for augmentation and appropriate mix of climate finance, with some clear Member State positions that UNFCCC fund mobilization should be treated as “additionality” and not counted as part of development financing;
- The balance between financial and non-financial means of implementation;
- Further harnessing the Development Cooperation Forum;
- Not losing sight of the needs of middle income countries (MICs);
- The need for the new framework to respect common but differentiated responsibilities in financing, with others calling for a sharper focus on South-South arrangements;
- Social and environmental protection expenditure, which needs to be accepted as an investment in long-term social progress and shared prosperity, rather than as a purely financial cost;
- The linkage between monitoring and the follow-up on the financing for development outcomes; and
- Deployment of ODA and MDB funds for capacity development.
Without a far-reaching financing strategy, our visionary goals and new agreements will not be deliverable.
I look forward to your views, your expertise and your guidance on financing the future we want.
I thank you.