Your Royal Highness Princess Astrid;
Your Royal Highness Prince Lorenz;
Mr. President of the EU Commission;
Mr. Chairman of the Crans Montana Forum;
Excellencies;
Distinguished Guests;
Ladies and Gentlemen:
First of all, I would like to express my congratulations to the Crans Montana Forum on the occasion of its 20th annual session. I would like to thank and congratulate in particular the Chairman and Founder Mr. Jean-Paul Carteron for the relentless efforts he pursued to make what Crans Montana has become along the years, a prestigious well-established institution helping to build bridges between civilisations, between countries and between people.
As you may all know the main mandate of my institution - The OPEC Fund for International Development, OFID - is to assist non-OPEC low income developing countries in their struggle for sustainable development. Allow me therefore, in my allotted time, to briefly highlight what are the new challenges facing the world of development practitioners.
The current economic and financial downturn that we are currently experiencing has serious impacts on the efforts of poor developing countries to achieve sustainable development. Financial Development Institutions, including OFID, have an important and countercyclical role to play during these difficult times of credit crunch. In this crisis we are confronted with a critical situation. It is the loss of confidence in the rules and regulations governing international financing and the trust in the powers of market forces. The world now needs to consider whether the rules of international finance need to fundamentally change in order to return to the path of growth.
Today, an intense debate is taking place among Development Institutions in order to substantiate the decisions and the appeals made by the International community for a quick resumption of economic and social progress, in particular in the world of the poor.
The G20 countries and various other fora have all called for action, including stimulus-plans and anti-recession policies. The G20, observing the shortcomings of the market, has asked development institutions to raise the levels of their intervention and help kick-start stalled economies. Above all, the G20 would like to see development institutions work to protect emerging markets as well as developing countries from the full impact of the current crisis.
The call is to uphold the course of reforms; to sustain efforts to develop infrastructure; and to maintain social security. The action plan will include funds to support development plans; to restore credit - notably for trade; and to ensure liquidity for countries which face sudden shocks.
All these decisions and calls are indeed much needed, but are they sufficient?
Let us consider governments which have sacrificed so much to set their countries on the path of sustainable development with economic and social growth which a few years ago surprised many. These governments are, today, helplessly witnessing the shrinking of their markets; a worsening of their terms of trade; a fall in remittances; a drying-up of their sources of capital; and threats to official development assistance flows. These challenges, which the governments could have hardly predicted, will hamper them from attaining the Millennium Development Goals.
The World Bank has released just two days ago its annual report on Global Development Finance. Let me quote just one conclusion: ‘Poor countries face increasingly grave economic prospects if the dramatic deterioration in their capital inflows from exports, remittances, and Foreign Direct Investment (FDI) is not reversed in 2010’. This clearly highlights the urgency of the matter.
Excellencies;
Ladies and Gentlemen:
Let me, at this point, recognize and commend the essential role of the European Union in the world economy and the Union’s welcomed strategies toward Africa and the Arab world. These strategies -- and particularly the dominance of the European aid programs -- are for us another justification for our being here.
We are aware of the need for aid coordination and the harmonization of donor efforts. It is our delight that OFID projects in these parts of the world are complementary to EU programs. This was demonstrated at a meeting held recently in Kuwait between the development institutions of the Arab World and OECD/DAC.
OFID, has accepted the call of the International community. We have created plans to live up to our commitment to stand by our partner countries.
Thus, far from scaling-back, OFID is joining global programs to better capitalize banks; restore credit to trade; and fund small and micro-enterprises. OFID is providing funds to regional development institutions, which are in weak positions and unable to gain access to markets. We are in fact, expanding our Network of Partners to deal with new situations and honor our commitment to international coordination and harmonization.
Last week, the Governing Board of OFID examined and approved a record level of operations in any one session, US$912 m in new commitments. These included support for public and private-sector investments; trade financing; and grant financing to back humanitarian causes.
In addition, and in line with the guidance we received from the Heads of States of OPEC Member Countries with the 2007 Riyadh Declaration, OFID has given a key priority to the eradication of energy poverty. This priority has been further emphasized when in June 2008, The King Abdullah of Saudi Arabia called for an international energy pro-poor initiative aiming at increasing energy access by the poor.
Excellencies
Ladies and Gentlemen;
The task of eradicating energy poverty is immense. The required capital investment is significantly high at all levels. To reach the basic MDGs, 500 million more people need to have access to electricity at an additional investment of USD 16 billion per year. If indeed access to energy underpins the eight MDGs, my opinion is that, and I have often said it, combating energy poverty is so crucial that it should be declared the ninth Millennium Development Goal.
Today OFID is tackling energy poverty on many fronts.
First, to comfort our vision and experience we organized last year a workshop in Abuja, Nigeria on the very theme of Energy poverty in Africa, a continent where only a quarter of its people have electricity. One of the conclusions was to make concrete proposals to break the vicious circle of energy poverty linking energy development, real demand and income.
Enabling poor people to increase and diversify their income by providing them with appropriate financial services (such as microfinance among other mechanisms) is the key to break this vicious circle.
Second: OFID aims at triggering the appropriate synergies with other institutions in order to meet the huge financial requirements. OFID is involved in the latest initiative launched by the World Bank, in response to the call by the King of Saudi Arabia, which aims at providing assistance to help the poor access energy in an affordable way.
Third: In May this year the Energy Ministers of the G8, the European Commissioner and a further fifteen countries, including five OPEC Member Countries, confirmed their support for this initiative. This is most welcome with regard to alleviating energy poverty. Clearly we, in OFID, are not waiting that all these initiatives to be fully operational to deliver on the ground. Let me mention some concrete actions: Just last week the Governing Board of OFID approved close to US$ 50 million to participate in three important projects with the World Bank. These projects aim at reducing energy poverty:
- in Mozambique to improve electrical access. Poor families in peri-urban and rural areas will be the main beneficiaries. Renewable energies such as solar, hydro and biomass based on waste are part of this important project.
- in Pakistan with the construction of 970 MW power plant to offset 25% of country’s deficit and
- in Rwanda with a package of actions to increase the access to reliable and cost-effective electricity services to reach 210,000 households.
Excellencies
Ladies and Gentlemen;
It is with the moral strength of those who believe that they are doing their best that we, at OFID, appeal for even greater efforts in favor of the developing countries. Let us recall that these are countries which suffer from a crisis born elsewhere.
- We call on those who decide on aid budgets to differentiate between the loss of welfare and the abject conditions of malnutrition, disease and despair.
- We call for more effective representation of decision makers from the developing world in the processes which, in the end, decide the fate of their countries.
- We also urge dialogue between the rich and the poor. We ask for fairness and for a level playing-field. And, it is in this context that I would like to commend the Crans Montana Forum and its Chairman, Mr. Jean-Paul Carteron, for offering opportunities for dialogue between all parties in the global society, for networking and above all for giving a voice to those who feel left out of international governance.
Excellencies
Ladies and Gentlemen;
To conclude my intervention and on the occasion of the 20th annual session, it is my pleasure to offer the Chairman of the Forum, Mr. Jean Paul-Carteron, a token of OFID’s appreciation for the contribution of the Crans Montana Forum to the global dialogue for peace, cooperation and solidarity among the nations of the world.