Asia Development Bank Acknowledged as Development Partner of Pacific Nations

The following is the address by Attorney-General Aiyaz Sayed-Khaiyum at the 50th ADB Annual Meeting at Yokohama, Japan. (On behalf of Governors from Cook Islands, Federated States of Micronesia, Fiji,
10 May 2017 11:58
Asia Development Bank Acknowledged as Development Partner of Pacific Nations
A-G In Top Panel Discussion At ADB Attorney-General Aiyaz Sayed-Khaiyum (right), speaking in the high level panel discussion in Yokohama, Japan on May 5, 2017 during the annual Asian Development Bank (ADB) Meetings

The following is the address by Attorney-General Aiyaz Sayed-Khaiyum at the 50th ADB Annual Meeting at Yokohama, Japan.

(On behalf of Governors from Cook Islands, Federated States of Micronesia, Fiji, Kiribati, Republic of Marshall Islands, Nauru, Papua New Guinea, Republic of Palau, Samoa, Solomon Islands, Timor-Leste, Tonga, Tuvalu, and Vanuatu)

Mr Chairman

President Takehiko Nakao

Fellow Governors

Ladies and gentlemen

It is my pleasure to address the 50th Annual Meeting of the Board of Governors of the Asian Development Bank (ADB), on behalf of the 14 Pacific Developing Member Countries (PDMC) consisting of the Cook Islands, Federated States of Micronesia, Fiji, Kiribati, Republic of Marshall Islands, Nauru, Papua New Guinea, Republic of Palau, Samoa, Solomon Islands, Timor-Leste, Tonga, Tuvalu, and Vanuatu.

We congratulate the ADB on its 50th anniversary and for the excellent preparations and arrangements made for this annual meeting. We would also like to express our gratitude to the government of Japan and residents of this beautiful city of Yokohama for their warm welcome and hospitality.

As the ADB celebrates 50 years of economic development in the region, we join our fellow Governors to recognise and compliment the remarkable progress that the Bank has made since inception. In this respect, Mr Chairman, we express our strong support for the ADB 2030 Strategy.

On behalf of the PDMC Governors, I wish to thank the ADB President and management team for meeting with the PDMC Governors to discuss issues relating to our common developmental challenges and opportunities. I would also like to acknowledge and sincerely thank the ADB for scaling up its support and increased presence in the Pacific. This has resulted in a notable five-fold increase in ADB’s portfolio in the last 10 years – from US$500m in 2006 to US$2.6 billion at the end of 2016. As you are aware, the PDMC has a population of approximately 11 million people spread out over hundreds of small islands spread over an oceanic expanse of 161 million square kilometres.

Mr Chairman, while the Asian region has forged further ahead and became a key contributor to global growth, many of our idiosyncrasies including the physical size of our Pacific islands, diseconomies of scale and geographical isolation from large markets have collectively weakened our ability to leverage and benefit from a thriving Asia and the rest of the world.

In addition, our greater vulnerability to climate change and natural disasters results in more drain on fiscal revenue and resources to meet the adaptation and rehabilitation efforts which in turn constrains funds needed to expand the network and the size of our infrastructure to spur growth on a sustainable basis.

While ADB has consistently served as a key development partner to the PDMC and has provided invaluable financial and technical assistance in many areas such as transport, infrastructure, rural and urban water supply and sanitation, and renewable energy, there are a number of concerns that the PDMC Governors have unanimously agreed to at various forums such as the recent 2017 IMF-WBG Spring Meeting and the Forum Economic Ministers Meeting held in Fiji last month.

Mr Chairman, the PDMC Governors discussed and deliberated a number of key concerns at the 27th Informal Preparatory meeting held on the morning of Wednesday, 3 May 2017. These are:

1. Fragility and vulnerability

It is proposed that a nuanced approach to measuring and indexing vulnerability and fragility be embraced to enable access to concessional finance when it is necessary. To this end, we need to look at trigger-based mechanisms, where countries can access concessional financing in the event of adverse climatic events. Adverse climatic events can even put those countries that would not normally be classified as vulnerable states into that of one. This is so because even singular, high intensity and erratic climatic behaviour can set back the economies of some states for decades.

This would require special treatment and consideration. Embedding vulnerability and fragility in the Multilateral Development finance is essential for our adaptation, prudent fiscal management and meeting the sustainable development goals by 2030.

2. Fast-tracking administrative processes in the disbursements of funds by the Green Climate Fund (GCF)

Mr Chairman, the PDMC have raised strong concerns on the painfully slow response from the Green Climate Fund (GCF) with regards to the disbursement of funds for approved projects. This has a derailing impact on national budgetary processes and planning. Significant delays can render elements of the envisaged project irrelevant over time, increase project risks, and hence raise the costs of financing.

We seek the ADB’s assistance to facilitate and streamline the current bureaucratic processes of GCF. The PDMC further propose that the ADB step-in to provide those approved GCF funds as this will enable expeditious commencement and completion of projects.

3. ICT Development for enhancing Digital Financial Solutions and e-Public Services

PDMC would be grateful for further assistance from ADB to leapfrog the ICT related development, and digitisation of financial inclusion initiatives in the provision of services to our citizens.

4. Public Private Partnership (PPP)

Mr Chairman, given that the ADB has the expertise and knowledge base in the area of Public Private Partnerships, the PDMC requests if the Bank could provide the necessary support and advice to roll-out capital projects through PPPs. This will not only assist to spread out the overall risk but it will also ease the upfront capital requirement. In addition, the private sector can also bring in the much needed innovation and expertise related to public sector investments. This approach can also be used to enhance private sector participation in climate change adaptation finance and initiatives.

5. Building necessary capacity

The regional peer-to-peer learning through the Pacific South-South Cooperation can be further harnessed to capitalise on the home grown talent in the region. We urge the ADB to work with relevant development partners in the region to coherently co-ordinate this initiative of leveraging the localised expert and knowledge base within the region.

6. Integrating Rescheduling options in MDB Loans

Mr Chairman, the PDMC would like the ADB to strongly consider in our loan documentation going forward, and also in existing agreements, a provision that allows us to reschedule payments in the event of adverse climatic events. We understand that this has already happened in the Caribbean and we request the replication of this arrangement for the PDMC. This will demonstrate that climate change and its impacts are being main streamed and it will provide that psychological boost to PDMC.

7. De-risking and remittances.

Mr Chairman, remittances is one of our major sources of foreign exchange. PDMC notes the importance of the issues of de-risking and the withdrawal of correspondent banking relations to the Pacific region in terms of facilitating growth and development prospects. Losing or reducing these financial services has a detrimental effect on our economies. It is in this light that we urgently request the ADB’s assistance in facilitating a regional forum to bring together Pacific banks and their supervisors and regulators (including Australian banks and their supervisors and regulators) to find an amicable solution. This will complement the current efforts applied by the International Monetary Fund and the World Bank.

8. Further increasing ADB minimum allocation

Mr Chairman, the PDMC Governors appreciate the ADB scale up in the Pacific but hope that as part of the ADF 12 mid-term review, ADB can further increase minimum allocations consistent with other multilateral development partners. This will especially benefit the smallest and most vulnerable countries.

Mr Chairman, the PDMC calls on the ADB to support our outlined efforts as well as setting milestones and definitive timelines for the respective initiatives that are to be actioned. However, I am pleased to highlight that in our discussions with President Nakao, senior management and other ADB officials, we have been informed that the concerns that we have raised will be given earnest consideration and we look forward to achieving these objectives at the soonest.

Before I close Mr Chairman, I’d like to state that the PDMC will continue to work as a collective group to support each other in the global arena, such as in the upcoming COP23 meeting in November in Bonn, Germany when Fiji will formally assume the Presidency. This is an honour not only for Fiji but for the PDMC as it will be the first time a PDMC has been given the COP Presidency. Our focus will be to safe guard the Kyoto Protocol and further advance and implement the Paris Agreement. This of course will be done through the advancement of the rule book, re-enforcing the climate action agenda through the collaboration of the many non-state stakeholders including civil society and the private sector. As part of our

Presidency, we wish to get the global community to understand the need to adjust the current skewered permutation of the Climate Finance Facility.

Instead of 80 per cent of these funds being skewered to mitigation and only 20 per cent for adaption, we must get more funds allocated for adaptation from the current pool of funds.

Mr Chairman while PDMC may be on the coal face of bearing the brunt of climate change in particular through rising sea levels and heightened and erratic climate events, climate change is a global issue. It has as much relevance to Asians, Americans, Africans and Europeans. It has an impact on food security, sustainability of livelihoods, our biodiversity and quality of life. It has and will have an impact on profits and sustainability of commercial and financial interest. It will have an impact on human survival.

So we look forward to all your support in this global effort.

Mr Chairman, on behalf of all PDMC Governors, I would like to express our sincere appreciation to you and management of ADB for the on-going support to PDMC. The PDMC assure their unwavering support to ADB in implementing these initiatives. We also look forward to hosting you all for the first time in the Pacific when Fiji will hold the 2019 ADB Annual meeting.

Thank you, Mr Chairman.

Feedback: jyotip@fijisun.com.fj

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