2011 FEMM: Outcomes

Latest Press Statement

22 July 2011

2011 FEMM: Outcomes

PRESS STATEMENT 55/11

[Thursday 21st July 2011, Apia, Samoa] The 2011 Forum Economic Ministers Meeting (FEMM) concluded today in Apia, Samoa, with Ministers providing guidance on advancing issues of economic management and development.

In concluding their meeting, Economic Ministers released the Forum Economic Action Plan 2011.
Broadening the Economic Base

“While the global economy is now showing signs of recovery, Ministers believe this is still fragile and uneven,” said FEMM Chair, Samoa’s Minister for Finance, Hon Faumuina Tiatia Faaolatane Liuga, in reference to the Action Plan. “There is need to continue to maintain macroeconomic stability and necessary reforms.”

Ministers recognized the importance of providing leadership, maintaining political stability and building a coalition for change through proactive consultations with private sector and the community.

“Reform is an ongoing process,” acknowledged Ministers, agreeing to persevere with reform and implementation of policies, supported by strong leadership and political will.

Ministers further committed to pursuing reforms to create an enabling environment for private sector development.
Strengthening Development Coordination

Progress of advancing the Forum’s Compact on Strengthening Development Coordination in the Pacific featured high on Economic Ministers’ agenda.

“Consequently, Ministers reiterated the importance of the Compact in encouraging more effective coordination of available development resources to achieve real progress against national development priorities, through national planning, budgeting, public financial and aid management,” said the FEMM Chair.

“Ministers also reiterated the importance of the peer review process in promoting peer learning and the possible replication of good practices in national planning, budgeting, public financial management and aid coordination among Forum Island Countries and development partners.”
Improving access to climate change funding

Ministers highlighted the importance of adequate, sustainable and timely resources being made available to Forum Island Countries to address their needs to mitigate and adapt to climate change.

“Varying circumstances of Forum Island Countries may necessitate different modalities for effective delivery of climate change resources,” said Ministers, further recommending direct budgetary support and sector budgetary support as the most effective modalities for the delivery of climate change resources.

Ministers also agreed to consider the use of national trust fund arrangements as a possible modality for climate change resources.

“Where a national trust fund may not be feasible, a sub-regional or a regional trust fund arrangement may present an alternative,” Ministers noted.
Regional remittance issues

Economic Ministers welcomed Australia’s update on reducing the cost of sending remittances from Australia to the Pacific, noting the price through money transfer operators had fallen to 13.6 per cent of the total amount remitted.

Ministers further welcomed efforts of the private sector to offer innovative low cost remittance products and support financial literacy and inclusion.
Regional interest rates

Economic Ministers noted that lending rates and interest rate spreads in the region are generally in line with comparable countries.

“Profitability from interest does not appear to be out of line with international norms,” said the FEMM Chair. “When considering all sources of income, overall profitability has been consistently higher than other comparable regions, largely as a result of substantial income from foreign exchange operations.”

Ministers called for longer term methods of increasing access to financial services to be pursued.

“Such efforts remain primarily at the national level and include creating deeper, more competitive financial markets, improving transparency and disclosure both at the market and individual customer level, and strengthening consumer protection and financial literacy.”
Update on G20

Ministers welcomed the update on G20 progress, including G20 Leaders’ endorsement of the Multi-Year Action Plan on Development and the implementation of quota and governance reforms to create an International Monetary Fund that better represents emerging markets and developing countries.

Ministers also welcomed the agreement on the Financial Inclusion Action Plan and investigation of the drivers of, and possible risk management options to address commodity price volatility.
SME Financing Facility

Economic Ministers reiterated the urgency of improving access to finance in Forum Island Countries to develop the private sector, noting the work in progress to explore the possibility of a regional facility to assist with SME financing.

Ministers tasked the Pacific Islands Forum Secretariat to continue liaising with the World Bank Group and report back to the 2012 FEMM.
Forum Economic Ministers will meet again in July 2012 in Kiribati.

(Ends)

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