STATEMENT
BY
H.E. AMB. Z.D. MUBURI-MUITA
AMBASSADOR/PERMANENT REPRESENTATIVE
OF THE REPUBLIC OF KENYA
TO THE UNITED NATIONS,
DURING
THE HIGH-LEVEL DIALOGUE
OF THE GENERAL ASSEMBLY
ON FINANCING FOR DEVELOPMENT
AT
THE UNITED NATIONS HEADQUARTERS,
NEW YORK
23-24 OCTOBER 2007
Mr. President,
I express my appreciation to you for organizing this very important event that brings together distinguished delegations to discuss the issue of Financing for Development.
My delegation associates itself with the statements delivered by the distinguished Representatives of Pakistan and Benin on behalf of the Group of 77 and China, and the African Group respectively.
Mr. President,
This particular High-Level dialogue presents an opportunity for both Member States and the development partners to reflect on critical issues affecting development prospects of countries, particularly the developing countries. The dialogue takes place at a midpoint time span for the implementation of the Millennium Development Goals. It is also taking place at a time when arrangements are underway to undertake an international review of the implementation of the commitments made during the 2002 Monterrey Consensus Conference on Financing for Development.
My delegation underscores the close link between implementation of agreements and commitments reached at the Monterrey Conference in 2002 on financing for development, the promotion of sustainable development, and the eradication of poverty with a view to achieving an equitable global economic system.
Mr. President,
The International Conference on financing for development marked the beginning of a new international approach to dealing with issues of development finance in a broad and comprehensive manner. It addressed issues of domestic and external resource mobilization, foreign direct investment, official development assistance, global partnerships for development and innovative means of financing development. The Monterrey consensus provided the framework for efforts aimed at dealing with issues of financing for development at the national, regional and international levels and in a systematic manner. My delegation therefore calls on the International Community, particularly the developed countries to meet their commitments in order to keep the spirit of Monterrey alive.
For Kenya and many other developing countries a number of wide-ranging reforms have been instituted since the Monterrey Conference as part of our commitments. For instance:
We have strengthened our key institutions of governance, deepened democratic principles and enacted enabling legislation.
We have developed frameworks for economic recovery and sustained economic growth. The Kenya Government launched in 2003 an Economic Recovery Strategy for Wealth and Employment Creation that spelled out initiatives for the monetary, fiscal including budgetary and public expenditure reform, all anchored on prudent monetary and fiscal management. As a result of these, the economic performance has indeed picked up drastically from near negative growth rate in 2002 to positive 6.3% in 2007. These growth rates have been accompanied by improvement in the living standards of our people, and improved infrastructure among others. The Government further launched the vision 2030 this year as a blue print and long term development strategy aimed at transforming Kenya into an industrialized middle income country by the year 2030. The vision is based on three pillars namely, the economic, social and political pillars respectively.
The Government of Kenya is committed to the implementation and achievement of MDGs targets as one of the key components of poverty eradication. In 2003, the Kenya Government committed itself to reduce, within 5 years, poverty levels by at least 5 percentage points from the 56.8 percent levels. In this respect among the strategic decisions the Government took included implementation of specially designed pro-poor development programmes and projects, among them introduction of free primary education in 2003 with the aim of achieving 100 percent enrolment rate; structured and institutional reforms in the health sector, agriculture and physical infrastructure. So far the success of these efforts can be attributed to the now reduced prevalence of poverty from 56.8 percent in 2003 to about 49 percent in 2007.
Notwithstanding the above, Kenya’s capacity to raise resources domestically for development remains constrained. Over the last 3 years the public budget has been funded from local revenue collections to the tune of 93%. Hence the need for development partners to move fast and meet their commitments in providing adequate level playing grounds for emerging economies like Kenya to competitively participate in global trade and application of modern technological applications.
Mr. President,
With regard to mobilization of international resources for development, Kenya notes with concern the emerging trend where both official development assistance and foreign direct investments to developing countries particularly in Africa have been on a steady decline since 1990. Even more discouraging is the realization that for the last few years, the flow of resources from developing to developed countries in form of foreign reserves has been on an upward trend. There is need to promote measures that would reverse these adverse trends by introducing stiffer penalties for multinational companies that engage in corruption, tax evasion, transfer pricing and other unethical business practices.
Trade is a very important tool for development both for developed and developing countries. Besides the traditional focus where trade concentration has been between developed and developing countries, there is an emerging trend occasioned by rises in real incomes in developing countries. The rise in incomes has resulted in significant increase in purchasing power and expansion of consumer choice in developing countries. In effect trade among and between developing countries has been on the increase and what is now needed is for the international community to find means and ways of harnessing the additional purchasing power in favour of locally produced goods and services. For example, there has been significant growth in trade between Kenya and the East African Community Member Countries. Further, I wish to note that Kenya accounts for about 28 percent of trade amongst the COMESA member countries. At the Africa and continental level growing intra African trade as exemplified by significant positive increases in balance of trade between states and more significantly increase in aviation traffic between various African cities.
Mr. President,
In order for developing countries, particularly in Africa to take full advantage of the growing incomes and consumer levels, the International Community should consider supporting intra-Africa (intra-regional) trade as a means of promoting self-reliance and also to avoid extreme negative impacts on development when global shocks and imbalances occur. Further, Kenya calls for a fair global rule based, open, non-discriminatory and equitable multilateral trading system that can stimulate development worldwide. In this regard, the WTO should place the needs and interests of developing countries in the forefront. The decision making process within the WTO should be transparent and participatory in order to accommodate the interest of all the members. We cannot however entrust the WTO with the responsibility to create a fair and equitable trading system in the midst of the current stalemate on the Doha Round of development talks. The stalemate paints a gloom picture of the capacity of the global body to bring harmony and balance among and between countries trade practices.
Mr. President,
External debt is another key impediment to development in developing countries. A huge share of revenues and other resources are being used every year to service and repay external debt. In the last ten or more years, Kenya has experienced a net outflow of resources mainly towards repayment of debt. A number of initiatives that have been formed, for instance the Highly Indebted Poor Countries Initiative (HIPC) have not benefited us owing to the perception that Kenya’s debt is sustainable. This is not realistic. The International Community should put in place mechanisms, within the Financing for Development framework that will expedite the process of securing unconditional debt relief for developing countries. The eligibility criteria for securing debt relief should be made more flexible, while fundamental changes need to be made to the debt sustainability criteria. The impact of external debt on development prospects and potential of developing countries is too immense to be ignored.
The Breton Woods Institutions have a particular and historically significant in providing resources to finance development in needy countries. The evaluation and decision outcomes in the two institutions have a great impact on the overall credibility and perception by other development partners. The International Monetary Fund and World Bank were established to support development efforts in all counties but they have turned out to be selective, biased and partly responsible for the appalling poverty, especially in Africa and elsewhere in the world. However, for a long time developing countries have continued to call for the reform of the International Monetary Fund and World Bank in order to make them responsive to their needs with none, if not little success. It is our sincere believe that our efforts will yield good results in the near future.
Mr. President,
We look forward to the forthcoming review of the Monterrey Consensus and the recently launched Development Cooperation Forum to put more emphasis on the long overdue reform of the International Financial Institutions and in particular, ensure increased voice, participation and representation of developing countries in decision making processes of these institutions. In addition, these institutions should be reformed with a view to improving the international corporate governance as opposed to the governance at national level that has been used as conditionality against a number of countries.
Finally Mr. President, the current environmental challenges, particularly as relates to Climate Change require a renewed focus on financing for development so as to go beyond the traditional perspective. Special attention need to be given to financing for adaptation and mitigation of Climate Change effects. As we all are aware Climate Change has become a real challenge to development and must be factored in every aspect of development planning.
I Thank You.
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