Moving money for growth
ADDIS ABABA, Ethiopia:
Security tightened around Ethiopia's capital city Addis Ababa yesterday as thousands of delegates from far-away countries arrived for today's start of the three-day International Conference on Financing for Development.
Talks of trillions of dollars available globally for foreign direct investments (FDIs) heighten the importance of this Addis Ababa gathering for all concerned.
This conference is expected to push the agenda for mobilising domestic and international resources for development, including FDIs, promoting international trade, and addressing external debt and systemic issues in the global money systems.
The discussion over the next few days hopes to push past governmental aid flows from developed countries to their under- or less-developed counterparts. It will also focus on private investment, domestic tax revenues, and clear and direct actions for jobs and growth in the world's economies.
For Ethiopian Prime Minister Hailemariam Desalegn, the conference is historic. This year, the discussions must seek to evaluate the 2015 development goals launched in 2000. These included reducing poverty levels, sustainable development, as well as health and education markers.
The 2015 Millennium Development Goals Report showed that poverty in developing countries has dropped from 47 per cent in 1990 to 14 per cent in 2015. While this may be so, austerity measures have been the order in many developing countries, pushing many people beneath existing poverty lines..
Local economists insist that apart from the announcements that will be made by countries and regions to boost their own attractiveness to big government givers and foreign investors, the talks must broadly determine exactly from where the trillions of dollars to finance global development in the years ahead will come.
Business newspaper Capital boldly declared yesterday that US$5 to US$7 trillion is required annually for global infrastructure development alone. It further estimates that another $100 billion is the set goal for energy infrastructure and clean-energy development by 2020.
Some US$2.5 trillion in unmet credit needs for small and medium enterprises in developing countries must be identified.
While the Addis Ababa talks are critical and promise to strike some deals and move some major money across continents, each nation will leave, hopefully, with new insights into how best to tackle their own issues at home.
In an online interview, development economist Owen Barder said the Addis Ababa talks will be successful if they go beyond passing around the hat for more aid and start to unlock the wealth tied up by policies and behaviour that distort the global economy, environmental and welfare losses for most of the world's population.
Jamaica's Finance and Planning Minister Dr Peter Phillip is participating in the conference.
Jamaica's participation in the conference as a small island developing state and as a middle-income country is important to the decision-making that will take place by the international community.
According to the finance ministry, the conference provides the country with an opportunity to participate in the dialogue on formulating new initiatives related to the mobilisation of resources for development, as well as to communicate concerns and imperatives relevant to middle-income and small-island countries like Jamaica.
These imperatives include building resilience as the basis for inclusive growth, middle-income designation and access to development finance, debt and debt sustainability, and domestic resource mobilisation within the context of fiscal sustainability.