Excellencies;
Distinguished Delegates;
Ladies and Gentlemen:
It is with pleasure that I address you today, at this 32nd International Energy Conference. My topic relates to the efforts of the OPEC Fund for International Development at helping foster sustainable development in the South. I should thank Dr. Dorothea Al-Mallakh, Director of the International Research Center for Energy and Economic Development, for her kind invitation.
The OPEC Fund, as many here are aware, is a development finance institution created back in 1976 by Member States of the Organization of the Petroleum Exporting Countries (OPEC). The mandate of the Fund is to reinforce financial cooperation between Member States and other developing countries. The Fund helps particularly the world’s poorest nations and the poorest segments of their societies in pursuit of their sustainable development efforts.
I shall return to the OPEC Fund in a minute, to discuss the aims and record of the institution especially as they relate to sustainable development, and the Millennium Development Goals (MDGs) adopted by the international community. But before I continue, I would first like to clarify the concept of sustainable development, and its relevance and importance to the works of the Fund.
Distinguished Delegates;
Ladies and Gentlemen:
Sustainable development was first defined in the Brundtland Report of 1987 as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs.” This definition, whether accurate or not, was subsequently adopted by the first Earth Summit, the United Nations Conference on Environment and Development (UNCED) in Rio de Janeiro, Brazil, in 1992. It was incorporated, as such, in the Rio Declaration and Agenda 21. The Rio Conference concluded that development can be sustainable only if it manages to balance three elements or pillars: social progress; economic growth; and environmental protection.
At the United Nations Millennium Summit, in New York, in September 2000, world leaders reaffirmed their commitment to sustainable development. They adopted a set of targets, the MDGs, to be achieved by the international community by 2015. The goals include the ambitious target of reducing poverty by half.
Two years later, at the World Summit on Sustainable Development (WSSD ), in Johannesburg, South Africa, in September 2002, the world community took stock of progress made toward the implementation of Agenda 21. The results were disappointing:
- Despite the pledges of Rio, threats were higher than ever to natural resources, such as clean water and air, and the gap between rich and poor had widened even further;
- Three billion people - about half the world’s population – still have to survive on less than two US dollars a day;
- Poverty and environmental degradation, which are intrinsically related, have grown, as have the ranks of the poor, especially in rural areas. This rapid population growth and a lack of appropriate agricultural technologies and know-how have led to a depletion of scarce natural resources;
- An estimated US$100 billion will be required annually to fight poverty and move toward accomplishing the MDGs. However, only 50% of this amount is currently available in the form of official development assistance (ODA).
Distinguished Delegates;
Ladies and Gentlemen:
Against the background of these challenges and concerns, the OPEC Fund has stood firm in its commitment to assisting, particularly, the poorer, low-income countries and the poorest segments of their societies. On a cumulative basis, the OPEC Fund has made available more than US$7.4 billion in concessional, untied development financing over the past 29 years, benefiting millions of people, worldwide.
This financing provided by OPEC Fund Member Countries through our institution complements the resources they make available through several other bilateral and multilateral channels. Working through the Fund and its sister Arab/Islamic institutions, OPEC Fund Member Countries have cumulatively provided more than US$81 billion in development financing. This is a noble achievement, particularly if one considers that all of these Member Countries are themselves developing countries.
Ladies and Gentlemen:
Over the past 29 years, the OPEC Fund has spread its presence to 113 countries, of which 50 are in Africa, 37 in Asia, 22 in Latin America and the Caribbean, and four in Europe. Since inception, the Fund has implemented, within the orbit of its public sector operations, 15 Lending Programs. The 16 th is currently underway. In the private sector, the Fund has equally been active, with a considerable number of operations on-going in support of private enterprise in Africa, Asia, Latin America and Europe.
These projects and programs are supplemented by grants, which finance technical assistance, research and studies, and humanitarian and emergency aid. The grants sponsor capacity building; sound environmental management; and transfers of appropriate technologies and know-how. I should add that under the grants program of the Fund, there are “Special Accounts” which have gone toward battling poverty and helping in areas of acute need. A Special Grant Account is aiding Palestinians in their struggle for social and economic survival; and another is funding projects and initiatives in the global campaign against HIV/AIDS.
The OPEC Fund has devoted considerable resources to assisting the worldwide work of other international institutions which directly benefit developing countries. The Fund is a major contributor to the Amsterdam-based Common Fund for Commodities (CFC) and had been instrumental in the establishment of the Rome-based International Fund for Agricultural Development (IFAD). Equally, the Fund had earlier in its history made irrevocable transfers, in the name of seven of its Members States, to the Trust Fund of the International Monetary Fund.
Ladies and Gentlemen:
As I mentioned, the first pillar of sustainable development is social progress. This covers equity, participation and inclusion. Despite important progress, issues of growth with equity have remained largely unresolved. The prevailing economic ideology and doctrine which says “grow first, distribute later” has not helped the world to attain the MDGs and, thus, realize the objectives of Agenda 21. The world’s poorest countries - the traditional focus of the OPEC Fund - have not been able to share in the benefits of globalization; indeed, they face further marginalization from the mainstream of the world economy.
Limited progress has been also made in strengthening the voice and participation of developing countries in the decision making processes of institutions for global governance. The Brundtland Commission definition of sustainable development became very influential, and is often cited. I have abided by this formal definition, which can be interpreted in many ways. Important as it is, however, the concept is still being developed, and the definition of the term is constantly being revised and refined. Developing countries should get greater say in helping determine what we mean by sustainability and progress, and in setting the international development agenda, which should give greater attention to issues of equity and inclusion. Despite initial discussions, progress in this area has been limited to date.
Looking back, one cannot but conclude that the political will to shift from dialogue into action remains key to transforming the vision of sustainable development into reality. The World Summit on Sustainable Development ended with a political declaration in which Heads of State and Government committed to realizing the common goal of sustainable development, and to “building a humane, equitable and caring global society, cognizant of the need for human dignity for all.”
OPEC Fund Member Countries have demonstrated the political will to live up to their commitments. They put to practice the pledges they made in the Solemn Declaration of the First OPEC Summit of Sovereigns and Heads of State, in Algiers, Algeria, in 1975. The declaration committed OPEC countries to helping spur social and economic progress in sister developing countries, as a means of narrowing the gap between rich and poor and enhancing international stability. This commitment was reaffirmed at the Second OPEC Summit in Caracas, Venezuela, in the year 2000.
Distinguished Delegates;
Ladies and Gentlemen:
Allow me to conclude with the assurance that the resolve of OPEC Fund Member Countries to realizing the vision of the institution as a token of South-South solidarity and global social responsibility is as strong today as it ever was. The Fund proposes to continue to reach out to the poor, and to put “people first,” as it goes on responding to the needs and priorities of recipient countries, which take the driving seat.
Fund beneficiary countries include many of the transition economies and some of the less developed of European countries. With a variety of traditional partners graduating out of the Fund’s concessional window, policy instruments are being developed, including a new product, the Blend Facility, to continue working with these countries to enhance growth and employment opportunities.
The OPEC Fund makes sure that its public and private sector projects are technically, financially and environmentally sound. More than 60% of the institution’s cumulative public sector lending has been dedicated to building infrastructure, particularly in transportation and energy, which are areas of critical importance for fighting poverty. Although the Fund has evolved over time, growing and adjusting to meet the ever-varying needs of beneficiary countries and partner institutions, the aims of the institution will remain the same: to continue to foster sustainable development and help reduce hardships and suffering for billions in poverty, in line with the MDGs.
Thank you very much for your kind attention.