27-06-2005 - High-Level Dialogue on Financing for Development - Australian Permanent Mission to the United Nations

Australian Permanent Mission to the United Nations

New York

Permanent Mission address: 150 East 42 Street, Level 33, New York, New York 10017 - Telephone: 1 212 351 6600 - Fax: 1 212 351 6610

General Assembly
27 June 2005

High-Level Dialogue on Financing for Development

Statement by the Hon. Mr Bruce Billson MP
Parliamentary Secretary for
Foreign Affairs and Trade

(Check against delivery)

Australia continues to strongly support the Monterrey Consensus. Its integrated approach, requiring a partnership between developed and developing countries with policies and actions required of both, is essential to achieving progress towards the MDGs. The Monterrey Consensus remains as relevant now as it did in March 2002.

We know that the key to further progress in reducing poverty and raising living standards is sustainable, broad-based economic growth. Experience from East Asia, where over 500 million people have been lifted out of absolute poverty over the past twenty years, demonstrates that growth is essential to reduce poverty and will generate the vast majority of resources required for development.

The impressive rates of economic growth and poverty reduction in East Asia therefore, give hope that significant progress can be achieved. We have seen this in countries such as China, India, and Vietnam. They also demonstrate the enormous benefits of putting in place sound economic policies and pro-growth reforms while also removing barriers to trade and investment.

Australia supports an integrated approach to development financing which mobilises domestic resources, facilitates foreign direct investment, pursues trade liberalisation and increases effective ODA.

Trade

Trade liberalisation is a key driver of sustained global development. We urge developed and developing countries alike to accord the highest priority to the finalisation of the WTO Doha Round of trade negotiations by 2006. Of particular importance is reform of agriculture – the most distorted area of world trade.

According to the World Bank, agricultural liberalisation would account for almost two thirds of developing countries’ total potential gains from the Doha Round. This would require

• the elimination of agricultural export subsidies,
• substantial reductions in trade distorting domestic support, and
• lowering tariffs to provide substantial improvements in market access.

Least developed countries (LDCs) require support to harness the benefits of trade liberalisation. Australia’s aid program includes significant, multi-year commitments amounting to AUD 245 million for trade related capacity building and trade facilitation. This assists in the creation of a positive enabling environment for LDC growth and development. Since 2003 Australia has also granted unconditional tariff and quota-free access for all goods from the LDCs, and we call on all states to do likewise.

Governance

A more open trading environment, however, is unlikely to deliver the potential gains for poverty reduction in the absence of good governance. Good governance remains the cornerstone of development, creating an environment for private sector development and employment that allows the poor to participate in the economy which reduces poverty and improves livelihoods. Promoting macro-economic stability and the rule of law, ensuring property rights, and tackling corruption are central to these efforts.

As pointed out in the UN Secretary General’s Report In Larger Freedom stability and security are necessary foundations for poverty reduction. Conflict and instability undermine confidence and deter investment. The poorest 20 per cent of people in the world suffer 80 per cent of the world’s civil wars. In our region, the recent experiences of Bougainville and Solomon Islands underline the clear nexus between stability, security and development.

ODA

As well as our commitment to trade liberalisation, we have also delivered five successive years of real growth in our ODA since the Millennium Summit in September 2000.

As a result of recent commitments, from 2005 through to 2009, Australia will provide an additional AUD 2 billion in ODA, on top of our existing aid program.

To meet the challenges ahead, however, time bound and overly prescriptive approaches to aid delivery will be no substitute for efforts that are flexible, targeted and focus on development outcomes.

We strongly support coordinated and effective aid efforts and believe that this should occur through instruments which best accommodate the circumstances of individual countries. For Australia, financing increases in ODA through traditional means is simple, cost effective and transparent.

To this end, Australia has made a number of substantial multi-year commitments to address critical needs and challenges in the Asia-Pacific region. These include:

• a new additional AUD 1 billion partnership with Indonesia for reconstruction and development,
• AUD 841 million over the next four years for the Regional Assistance Mission to Solomon Islands (RAMSI) to restore law and order and rebuild the country’s institutions and economy, and
• an AUD 600 million commitment to combat HIV/AIDS.

Furthermore, Australia continues to support multilateral debt relief delivered through the Heavily Indebted Poor Countries (HIPC) initiative. The recent G8 proposal for further multilateral debt relief builds upon the initiative and has Australia’s strong support.

In considering global development needs, it is important to recognise that the Asia-Pacific region contains more than a quarter of the world’s least developed countries and more than two-thirds of the world’s poor. The development needs of the region are large and diverse, and require the continued engagement and attention of the international community.

The Monterrey Consensus identified the special needs of small island developing states (SIDS). Through our location and historical ties, Australia has extensive experience of the difficulties faced by our small Pacific Island neighbours and we have increased our engagement substantially with our Pacific Island partners over recent years. We fully support the Mauritius Strategy as a framework for SIDS development.

We welcome the growing international recognition of the special challenges faced in post-conflict and fragile states. It is now widely accepted that disengagement with fragile states is not a viable option – but that the nature of the engagement needs to be integrated and innovative.

In all of these efforts, aid effectiveness remains the key. To ensure that the Australian aid program continues to be effective, well targeted and relevant to the emerging needs of our partner countries, the Australian government is preparing a White Paper on Australia’s Aid Program. This strategic aid policy outlook will draw on the best available external expertise and will involve consultations in our partner countries, with other donors and civil society as well as academic institutions. The White Paper will be presented to the Australian Parliament in early 2006 and will represent a medium term strategic blueprint for our future aid engagements in our region.

In conclusion, Australia will continue to support the Monterrey Consensus as a sound framework for development and poverty reduction.