Commonwealth: Global Financial Crisis Must not Derail Development Efforts

Published on 8th December 2008

First, the current financial crisis must not divert us from addressing the continuing development crisis. Nor can this be a matter of ‘either/or’: the world must mobilise the resources to meet both. It is an inescapable fact that the financial crisis will put pressure on all sources of financing for development. Developing countries will find capital markets harder to access. The value of their commodity exports will fall. They will find that private sector investment is harder to attract. Income from remittances will fall, and aid budgets – already inadequate – will come under greater pressure. 

But with an exceptional effort to meet commitments made and generate the resources, the Millennium Development Goals can be met. Failure to meet the MDGs would represent a terrible waste of human potential – ‘financing for development’ is a means to an end: we are all agreed on the ‘end’, and the primary purpose, which is human development and human dignity for all. 

Kamalesh Sharma - SG, Commonwealth
Second, trade can generate the most durable ‘financing for development’. It is therefore a sure way to development. Enabling producers in poor countries to sell their production can lead to enduring prosperity. The Commonwealth, from its richest to its poorest members, has long argued for a multilateral, rules-based trading system under the auspices of the WTO. Our deeds have matched our words: helping small countries to negotiate in the WTO; and giving them practical assistance to compete in a more open global trading market. 

Third, development must target two groups in particular: women, and young people. Women, as the half of the population that bears considerably more than half of its problems – and as the strongest single litmus test for the health of any society. There remains a significant gender inequality in all areas, whether domestic or external. And young people, in that it is they who will inherit this century. It is in them that our hopes for the 21st Century are invested.

We in the Commonwealth have long championed both of these causes, with strategy, budgets and programmes to match. We also believe in a sustained and comprehensive plan for promoting youth and women entrepreneurship.It is fair to conclude that an enormous challenge still lies ahead – first in guaranteeing the rights and basic needs of women and young people, but also in unleashing all of their potential to benefit themselves and the societies of which they are a part.

Fourth, we have all started to see in recent weeks and months, what has been the leitmotif of the Modern Commonwealth in all of its 60 years. That is, that the challenges which the world presents us – financial, developmental or environmental – can only be fully met through international cooperation. That is easier said than done, not least because it has become abundantly clear that the current system of international institutions of the 20th Century is not well suited to supporting countries in our task in the 21st Century. 

It was in 2007 that Commonwealth leaders began to pursue this reform collectively and actively, setting out earlier this year their agreed principles for such reform: effectiveness, fair representation, responsiveness, transparency, and accountability. These are principles which seem to be widely acceptable and accepted: indeed they found a strong echo in the G20 statement issued in Washington. 

The key is that the process of reform must embrace all participants of the global community. Ways must be found by which the views and suggestions of all governments can be brought to the table for consideration. Global reform requires global engagement in which all voices are heard. From this, a new architecture of financial governance should emerge which enjoys the confidence of the world’s citizens. If not, the reforms will not enjoy the legitimacy required to be sustainable.

Since we adopted the Monterrey Consensus, underdevelopment has remained the primary global emergency. In some respects, the emergency has become more acute, with the cumulative crises of environment, food security, energy and finance, as well as the intractable situation of some regions. In other respects, there is positive news, with large sections of the underdeveloped world having moved up, bringing hope to other regions. But the expansion of the global zone of prosperity has been uneven, and the global community is challenged to concerted action to make poverty history not too far into the 21st Century. For this century will be fateful in defining our human destiny. We must believe that we are capable of grasping that opportunity. 

At the heart of the Monterrey Consensus lies the need for governance and resources. Pivotal to the success of the whole process is that responsibility for the two be taken with coherence between the local, national, and global levels. Also pivotal is the understanding that the social and economic sectors are two sides of the same people-centred challenge. The Growth Commission recently established that the only common factor between all the dramatically successful developing countries of the last three decades was investment by each in health and education, not in any aspect of economic policy. 

We also believe that countries need to equip themselves with skills and a robust level of activity among small and medium enterprises; transparent and enlightened governance standards; and responsive institutions, to create the conditions for sustainable economic advancement.

The key to success in defining the Monterrey Consensus when we first forged it, and in renewing our commitment to it now, is partnership. Responsibility for implementation and contribution is shared. This spirit must endure. The Monterrey Consensus was a watershed compact where we undertook collective responsibility to secure our shared future; such a perspective – and this solidarity – must endure.

By Kamalesh Sharma

Commonwealth Secretary-General

On the occasion of the International Conference on Financing for Development to review the implementation of the Monterrey Consensus, Doha, Qatar.


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