Issue Date: 3 August 2009

The Pacific Islands and the World in the context of the Global Economic Crisis

“A meaningful development policy is not simply there for charity and filling gaps but rather to promote new global political choices and to indicate that investing in development, is investing in our future”, said Stefano Manservisi, the European Commission’s Director-General for Development and Relations with African, Caribbean and Pacific States.

Mr Manservisi was a keynote speaker at the Lowy Institute conference on the impact of the global economic crisis on the Pacific Islands region in Brisbane on 3 August.

The conference is a lead-up to the Pacific Island Forum being held in Cairns from August 4-7.

“The global economic crisis shows how deeply the prosperity and the future of advanced economies and developing countries are linked through globalization and that a global system of rules was needed for equitable sharing of benefits and costs”, said the Director-General.

Mr Manservisi stressed that advanced countries must create the conditions for a more inclusive and regulated globalization, and to fight poverty and exclusion as a necessary element of a sustainable global recovery.

“Europe has moved swiftly to supplement the IMF’s financing capacity by providing €75bn ($US 100bn) in bilateral contributions. In co-ordination with the World Bank and the IMF, the European Commission has proposed a set of concrete, targeted actions for the EU to support the poorest and most vulnerable developing countries”, he said.

Mr Manservisi argued that the participation of poor countries in global forums such as the G20 where economic and political decisions were taken, must be promoted.

“But developing countries also needed to takes measures to mobilize their domestic resources and stimulate private sector activities and growth”, warned Mr Manservisi.

Despite the global economic crisis, the EU will respect its commitments to development assistance with its average spending in 2008 rising to 0.4% of GNI, that is, $US70 bn or 60% of total ODA. The EU will increase aid to 0.7% of GNI by 2015.

The EU, that is the Commission and the Member States, remains a strong supporter of Pacific regional integration, being the second largest donor of aid in the Pacific region with $US 227.7m (2007). Last year the Commission alone tripled its financial support for regional cooperation in the Pacific to €95m bringing the total amount of grants for P-ACP to 475M€.

The European Commission has a new financial instrument, dubbed the “EU Vulnerability FLEX” to assist ACP countries to the tune of €500 m by 2010.

"The EU also stands ready to support social safety nets and to promote investments in coordination with other donor countries in the region such as Australia and New Zealand", he said.

In this context, the EU is interested in joining the Pacific Regional Infrastructure Facility that Australia, New Zealand, the World Bank and the Asian Development Bank launched at last year’s Pacific Forum.

“A serious crisis should never be allowed to go to waste …they hold real opportunities to refocus priorities, to make quantum leaps in terms of regional integration, to invest more and better, to stimulate economies, to achieve green growth and to redesign the international economic, financial and environmental architecture”, concluded Mr Manservisi.

ENDS

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