September 16, 2010
Intervention by Mrs. Siti N. Mauludiah, Director for Technical Cooperation, Ministry of Foreign Affairs of Indonesia, Agenda Item 5: The evolution of the international trading system and of internatio
Agenda Item 5: The evolution of the international trading system and of international trade from a development perspective : The impact of the crisis-mitigation measures and prospects for recovery
Allow me to follow the other speakers in thanking you for convening our meeting today. I am sure that through insightful and frank discussions, we will be able to generate some constructive ideas and recommendations.
Indonesia values highly the substantive note prepared by UNCTAD which is aptly titled “Evolution of the international trading system and of international trade from a development perspective”. I commend those involved in its production for its depth and focus on solution-oriented analyses.
As highlighted in the note, recovery from the global economic crisis has been unevenly spread and occurred at different speeds throughout various regions, including the Asian region. It was also identified that remittances have become a new key feature of economic growth strategies in developing countries. In the case of Indonesia, remittance has been playing an influential role in reducing poverty in many areas of the country, and thus by attaining MDGs Goal 1 subsequently. Indonesia calls UNCTAD to look into these issues to come up with policy recommendations for developing countries in how to better manage the remittance including on how to productively use the remittances for rural development.
Economic growth and the consistent flow of trade are crucial to the advancement of developing countries. Falling commodity prices and a reduction in international demand for exports can have a negative effect on weaker economies. Export-oriented developing countries, with small domestic economies, are particularly at risk from such factors.
In light of this, many workers are increasingly moving away from urban-based, export-oriented sectors into lower productivity activities in rural areas. This trend, combined with the impact of the food crisis, volatile energy prices and climate change, could result in millions of people falling back into poverty and hinder progress towards internationally agreed development goals such as the MDGs.
In addition, the availability of trade finance – an important element of international trade – has become scarce, and obtaining such funding is becoming increasingly more difficult and costly. This has serious implications for both global exporters and importers, especially in developing countries and we must continue to work at all levels to ensure the regular availability of trade finance.
On this note, Indonesia would like to underline the importance of finding a constructive, long-term, pro-development solution to negative trade growth, particularly in developing countries.
Against the backdrop of the fragile economic recovery post global financial crisis, Indonesia views there are several important steps to be taken in order to strengthen and sustain recovery:
- The importance of acting collectively at the multilateral level and finding realistic solutions to the global economic crisis and its impact on the international trade.
- There is an urgent need for all WTO member countries to re-engage at the political level and use all available avenues to push the Doha Development Agenda (DDA) toward an acceptable conclusion.
- As a chairperson of the G-33, Indonesia maintains that the Doha Round must fulfill its developmental mandate through the provision of an operational and effective Special & Differential Treatment mechanism. The Special Products (SP) and Special Safeguard Mechanism (SSM) will ensure the food security, livelihood security and rural development of poor and vulnerable farmers in the developing world.
Before I end my intervention, I would like to again underline that the international trading system in a multi-polar environment with multilateral, regional, sub-regional and bilateral initiatives, needs to better support country efforts to tackle post-crisis recovery, growth and pressing development challenges by providing greater policy space. In order to fully attain the MDGs by 2015, the international community should work together in making the system a development-friendly one. In this regard, greater inclusiveness, equity and fairness need to be mainstreamed into the international trading system.
In conclusion, may I reaffirm Indonesia’s strong support for UNCTAD and its efforts in monitoring and addressing the impact of crisis on trade and development. UNCTAD plays a unique and pivotal role not only in promoting the trade and development issues of developing countries, but also in navigating a clear path through these turbulent economic times.