World Bank Managing Director Juan Jose Daboub Lunch Presentation Pacific Islands Forum Economic Ministers Meeting Rarotonga, Cook Islands—Tuesday, October 27, 2009
Your Excellencies, Ministers, Heads of Delegations, Distinguished Guests;
I would particularly like to thank Cook Islands Deputy Prime Minister Sir Terepai Maoate, and Forum Secretary General Neroni Slade for their hospitality in welcoming us to this beautiful island.
I am very pleased to be able to co-host lunch with my colleague from the Asian Development Bank, Larry Greenwood.
And I appreciate the opportunity to talk again with all of you – both those I met in Istanbul, and those I am meeting for the first time.
Allow me to extend our sympathies to those who lost family members or their possessions as a result of the tsunamis in Samoa and Tonga.
I will visit affected areas next week, and am pleased that the World Bank will be there with you in reconstruction efforts.
I found the discussion this morning on the impact of the global slowdown on the Pacific island economies fascinating.
The island nations of the Pacific are influenced more than most countries by your economic geography. With 8 million people scattered over 15% of the surface of the globe, you face unique challenges.
Although the general economic strength of the East Asian region has mitigated the impact on the Pacific of the global economic crisis, this is in many ways simply the latest example of the volatility and vulnerability faced by your island economies.
The Pacific islands were obviously particularly hard hit by the food and fuel price spikes of 2008.
It is something of a “Pacific Paradox” that the islands of the fringes of the global economy are, unfortunately, highly subject to global economic fluctuations.
I was intrigued by how you as Finance Ministers are pursuing reform efforts to strengthen the resilience of your economies.
As a former finance minister of El Salvador, I appreciate how difficult such decisions can be. But such reforms do pay off.
We shouldn’t let a good crisis go to waste in terms of mobilizing public support for necessary reforms.
As we found in El Salvador – and as global experience has shown – giving people the power to take their destinies in their own hands is a proven recipe to encourage innovation and promote growth.
I was pleased to note that – as well as significant improvements in Vanuatu and Samoa, the Pacific islands almost across the board – continued to make improvements in the 2009 rankings on the ease of Doing Business.
Practical solutions to overcome geographical constraints include increasing access to knowledge and information based on IT connectivity, strengthening regional markets for goods and labor, improving education, and building small but effective institutions.
Governments should encourage entrepreneurship by being the referee, rather than the orchestra conductor.
While no one wishes for a crisis - such times create momentum for change. It is from these most challenging times that new opportunities emerge and tomorrow’s champions are created.
At the same time, the burden of adjustment to these international shocks shouldn’t only fall squarely on domestic leaders. We all have a role to play.
For example, on my way here, I visited Samoan workers in New Zealand, under the highly successful seasonal workers program.
It is critical that regional partners continue to support labor mobility, and continue to provide finance for the island economies.
From the World Bank side, we recognize that, where countries are undertaking necessary actions, there is a need for expanded collaboration.
I am very pleased that the World Bank Group will be significantly scaling up support for member countries.
Across the Pacific, I expect that we will be able to make as much as $250 million in concessional and grant available over the next 2 years.
This is almost double the approximately $130 million we provided over the past 3 years.
As well as money, the Bank can assist in sharing global knowledge and advice, such as work underway now to explore the possibility of creating a joint reserve fund that would allow island countries to access immediate liquidity in the aftermath of natural disasters.
I anticipate further consultations on this issue prior to the next FEMM in 2010.
IFC, the private sector arm of the World Bank, has also invested over $100 million in the region over the past 3 years, bringing in over $450 million in total private investment.
This compares to only $10 million in IFC investments in the decade before.
A particular success has been investments in telecommunications.
Over the past decade, telecoms subscribers in some countries have increased tenfold…..overcoming isolation, and reducing the impact of geographical remoteness.
This has been the result of opening the market to competition, along with IFC investments to encourage new operators.
The Bank Group hopes to scale up even further over the coming years.
In looking to scale up, we are keen to work closely to reflect country priorities and in cooperation with donor partners.
We are committed to do our bit to support the Cairns Compact outlined by leaders in August to improve development coordination.
I am very pleased that the World Bank and the ADB have been able to jointly open offices in several countries, and will in fact be traveling to open our joint liaison office in Samoa next week.
As well as being tangible evidence of the commitment of the World Bank and ADB to work together, these offices will help to ensure that we are better able to incorporate the views of your governments and people, to ensure that Bank financed programs meet your needs and priorities….and to do it faster, better and more effectively.
We also fully support the efforts of the Pacific Islands Forum Secretariat to support the development efforts of its member countries, and to encourage the development of regional solutions to issues consistent with the Pacific Plan agreed by leaders in 2005.
Following this lunch, I look forward to signing, with Secretary General Slade, an MOU outlining areas of cooperation between our two institutions, for the benefit of the Pacific island countries and consistent with the priorities established by Finance Ministers.
You have the ability and the responsibility to enable the environment for investment to take place and jobs to be created. Jobs are the best weapon against poverty.
We are here to walk next to you in your path to prosperity.
The Bank is open for business. With your support, we will continue to serve you with passion, and with the highest quality possible.
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