India, Pakistan and Sri Lanka
5th session of the Open Working Group (OWG) on Sustainable
Development Goals (SDGs)
November 25-27, New York
Remarks by Ambassador Masood Khan, Permanent Representative of
Pakistan on behalf of Troika (India, Pakistan and Sri Lanka)
Macro-Economic Policy Questions
Co-Chairs,
I have the honour to deliver these remarks on behalf of India, Sri Lanka and my
own delegation, Pakistan.
We align ourselves with the remarks made by the Permanent Representative of
Fiji, H.E. Mr. Perter Thomson, on behalf of the Group of 77 and China.
We express deep gratitude to Professor Jagdish Bhagwati, and Mr. Li Yong,
Director General (UNIDO) for a lively debate and exchange of views on the
Macro-Economic policy questions including international trade, international
financial system and external debt sustainability.
We also thank the Technical Support Team (TST) for preparing informative notes
that capture the state of play on these issues as well as forward looking messages.
Co-Chairs,
The distinguished panelists have outlined a definitive case for the key role of
economic growth and industrialization in poverty reduction, other social
outcomes and sustainable development.
There is little doubt that economic growth matters, as Professor Bhagwati has
said authoritatively. Our MDGs' experience substantiates that emphasis on social
outcomes without economic growth only stunts growth patterns and does not
lead to the desired outcomes in poverty eradication.
Evidence and experience gathered from some developing economies, including
India and China, clearly demonstrate that higher growth, when accompanied
with inclusive policies, has a positive impact on poverty reduction.
The economic dimension must therefore be captured in the form of dedicated
and equal number of goals as part of the SDGs. We must place equal emphasis on
policies and actions leading to acceleration of economic growth at the national,
regional and international levels.
To this end, we believe that Co-Chairs' conclusions from this session should
underline the following elements:
First, the post-2015 Development Agenda should be first and foremost about
economic development and economic transformation in the developing
countries. It must therefore help assist countries in enhancing productive
capacity, generating employment, increasing per capita income, and augmenting
resource endowments of the poor; while improving social and environmental
outcomes.
Second, we must place economic growth as a pre-requisite for poverty reduction
as part of the SDGs. We recognize that economic growth alone is not sufficient
for reducing poverty, enhancing economic inclusivity, and sharing prosperity. At
the same time, without economic growth we cannot hope to achieve meaningful
reduction in poverty or enhance equitable economic gains. We should therefore
explore stand-alone targets for economic growth in developing countries.
Third, the SDGs must place high emphasis on industrialization. As the Director
General of UNIDO very rightly said, job creation in high productivity sectors and
improvements in wages have a pull-effect on other sectors and services.
In addition, industrialization is a potent agent transfer of technology,
technological production and knowledge-based innovation. Industrialization
cannot be pursued without addressing issues such as enhanced FDI, technology
transfer, intellectual property rights, better market access for developing
countries and investments in productive capacities and infrastructure.
Fourth, the SDGs within the post-2015 Agenda must be inspirational and should
seek to encourage removal of developed world's bias in the international trading
regime, and investment rules.
Continuous reform of the international trading regime to provide a level playing
field to developing countries, dismantling of the agricultural subsidies in the
developed countries, and enhancing non-agricultural market access is needed for
achieving the Sustainable Development Goals.
Fifth, post-2015 Development agenda should not impose pre-designed strategies
or frameworks. Policy space of the developing countries to pursue inclusive
growth must be fully preserved. Countries must shape their own targets and
strategies under the relevant inspirational goals.
Sixth, full and productive employment needs to be identified as a key policy
objective
Finally, creation of the infrastructure must be identified as a stand-alone
objective and promoted through relevant national and international policy
instruments.
Co-Chairs,
There has been considerable discussion on what countries could do at the
national level to sustain economic growth and improve its macro-economic
policies.
Notwithstanding the importance of the primary responsibility of countries
towards their development, the post-2015 Development Agenda should draw
significant lessons from the indifferent implementation of MDG 8 on Global
Partnership, and must equally emphasize policy actions at the international level.
In our view, international actions are critically important for allowing a vast
majority of developing countries to realize much-needed economic growth. A
revamped and broadened global partnership for development would be critical in
order to create a development-friendly global economic environment.
Reform and better regulation of the international financial system, removal of
restrictions to transfer of technologies, and reform of the global economic
governance, including the Bretton Woods Institutions, to give more voice to the
developing countries are important objectives to ensure rapid, sustained and
inclusive growth.
It would be useful to explore this area through a study by Technical Support
Team with a view to crafting necessary indicators and targets under the SDGs.
In concrete terms, some additional areas of cooperation should include labor
migration, investment, and explore ways and means for enhanced development
finance. Empirical evidence suggests that these types of cross-border flows
significantly improve global welfare mainly by relocating labor and capital to
where they are most productive and sustain economic growth in the developing
countries.
Co-Chairs,
Recent reviews and empirical estimates suggest that the elimination of all
barriers to international migration could generate considerable economic gains.
Even a partial removal of these barriers could produce large benefits for the
world economy. Migration flows leading to net emigration rates of 7 per cent and
10 per cent in poor regions would create global efficiency gains worth about $7
trillion and $15 trillion, respectively. Some studies have indicated that even small
increase in migration would yield between $0.3 trillion and $1.6 trillion.
Similarly, in the case of the Foreign Direct Investment (FDI), income earned by
multinationals could help provide much needed support to economic growth in
the developing countries.
UNCTAD has estimated that FDI in developing countries grew from $238 billion
in 2005 to $555 billion in 2011. In 2011, about $214 billion were retained in
developing countries (49 per cent of FDI earnings), while a slightly higher value
was repatriated.
A global partnership that promotes greater retention of FDI profits could
generate significant resources for host countries. For instance, a 10 per cent
increase in FDI income retention could generate about $22 billion of new
investments in developing countries.
Finally, this revamped global partnership must emphasize on issuing new SDRs
and allocating them to developing countries.
Such an approach would not only reduce developing world's immediate need to
accumulate foreign-exchange reserves for self- insurance but also release
considerable resources for development.
Alternatively, SDR holdings of reserve-rich countries could be used as securities
to leverage additional development finance in international capital markets for
use in the developing world. As UN-DESA in 2012 pointed out, a global issuance
of SDR 150 to 250 billion per year coupled with an increase in the developing
countries’ allocation share from 42 per cent to 67 per cent would generate about
$160-$270 billion. Moreover, the estimated $100 billion of ‘idle’ SDRs could be
used to back the issuance of $1 trillion in bonds (for example Green Climate
Fund)
Co-Chairs,
In conclusion, we are of the view that the sustained and higher economic growth
targets must be embedded into all sustainable development goals and strongly
supported by a revamped global partnership for development.
I thank you Co-Chairs.
Development Goals (SDGs)
November 25-27, New York
Remarks by Ambassador Masood Khan, Permanent Representative of
Pakistan on behalf of Troika (India, Pakistan and Sri Lanka)
Macro-Economic Policy Questions
Co-Chairs,
I have the honour to deliver these remarks on behalf of India, Sri Lanka and my
own delegation, Pakistan.
We align ourselves with the remarks made by the Permanent Representative of
Fiji, H.E. Mr. Perter Thomson, on behalf of the Group of 77 and China.
We express deep gratitude to Professor Jagdish Bhagwati, and Mr. Li Yong,
Director General (UNIDO) for a lively debate and exchange of views on the
Macro-Economic policy questions including international trade, international
financial system and external debt sustainability.
We also thank the Technical Support Team (TST) for preparing informative notes
that capture the state of play on these issues as well as forward looking messages.
Co-Chairs,
The distinguished panelists have outlined a definitive case for the key role of
economic growth and industrialization in poverty reduction, other social
outcomes and sustainable development.
There is little doubt that economic growth matters, as Professor Bhagwati has
said authoritatively. Our MDGs' experience substantiates that emphasis on social
outcomes without economic growth only stunts growth patterns and does not
lead to the desired outcomes in poverty eradication.
Evidence and experience gathered from some developing economies, including
India and China, clearly demonstrate that higher growth, when accompanied
with inclusive policies, has a positive impact on poverty reduction.
The economic dimension must therefore be captured in the form of dedicated
and equal number of goals as part of the SDGs. We must place equal emphasis on
policies and actions leading to acceleration of economic growth at the national,
regional and international levels.
To this end, we believe that Co-Chairs' conclusions from this session should
underline the following elements:
First, the post-2015 Development Agenda should be first and foremost about
economic development and economic transformation in the developing
countries. It must therefore help assist countries in enhancing productive
capacity, generating employment, increasing per capita income, and augmenting
resource endowments of the poor; while improving social and environmental
outcomes.
Second, we must place economic growth as a pre-requisite for poverty reduction
as part of the SDGs. We recognize that economic growth alone is not sufficient
for reducing poverty, enhancing economic inclusivity, and sharing prosperity. At
the same time, without economic growth we cannot hope to achieve meaningful
reduction in poverty or enhance equitable economic gains. We should therefore
explore stand-alone targets for economic growth in developing countries.
Third, the SDGs must place high emphasis on industrialization. As the Director
General of UNIDO very rightly said, job creation in high productivity sectors and
improvements in wages have a pull-effect on other sectors and services.
In addition, industrialization is a potent agent transfer of technology,
technological production and knowledge-based innovation. Industrialization
cannot be pursued without addressing issues such as enhanced FDI, technology
transfer, intellectual property rights, better market access for developing
countries and investments in productive capacities and infrastructure.
Fourth, the SDGs within the post-2015 Agenda must be inspirational and should
seek to encourage removal of developed world's bias in the international trading
regime, and investment rules.
Continuous reform of the international trading regime to provide a level playing
field to developing countries, dismantling of the agricultural subsidies in the
developed countries, and enhancing non-agricultural market access is needed for
achieving the Sustainable Development Goals.
Fifth, post-2015 Development agenda should not impose pre-designed strategies
or frameworks. Policy space of the developing countries to pursue inclusive
growth must be fully preserved. Countries must shape their own targets and
strategies under the relevant inspirational goals.
Sixth, full and productive employment needs to be identified as a key policy
objective
Finally, creation of the infrastructure must be identified as a stand-alone
objective and promoted through relevant national and international policy
instruments.
Co-Chairs,
There has been considerable discussion on what countries could do at the
national level to sustain economic growth and improve its macro-economic
policies.
Notwithstanding the importance of the primary responsibility of countries
towards their development, the post-2015 Development Agenda should draw
significant lessons from the indifferent implementation of MDG 8 on Global
Partnership, and must equally emphasize policy actions at the international level.
In our view, international actions are critically important for allowing a vast
majority of developing countries to realize much-needed economic growth. A
revamped and broadened global partnership for development would be critical in
order to create a development-friendly global economic environment.
Reform and better regulation of the international financial system, removal of
restrictions to transfer of technologies, and reform of the global economic
governance, including the Bretton Woods Institutions, to give more voice to the
developing countries are important objectives to ensure rapid, sustained and
inclusive growth.
It would be useful to explore this area through a study by Technical Support
Team with a view to crafting necessary indicators and targets under the SDGs.
In concrete terms, some additional areas of cooperation should include labor
migration, investment, and explore ways and means for enhanced development
finance. Empirical evidence suggests that these types of cross-border flows
significantly improve global welfare mainly by relocating labor and capital to
where they are most productive and sustain economic growth in the developing
countries.
Co-Chairs,
Recent reviews and empirical estimates suggest that the elimination of all
barriers to international migration could generate considerable economic gains.
Even a partial removal of these barriers could produce large benefits for the
world economy. Migration flows leading to net emigration rates of 7 per cent and
10 per cent in poor regions would create global efficiency gains worth about $7
trillion and $15 trillion, respectively. Some studies have indicated that even small
increase in migration would yield between $0.3 trillion and $1.6 trillion.
Similarly, in the case of the Foreign Direct Investment (FDI), income earned by
multinationals could help provide much needed support to economic growth in
the developing countries.
UNCTAD has estimated that FDI in developing countries grew from $238 billion
in 2005 to $555 billion in 2011. In 2011, about $214 billion were retained in
developing countries (49 per cent of FDI earnings), while a slightly higher value
was repatriated.
A global partnership that promotes greater retention of FDI profits could
generate significant resources for host countries. For instance, a 10 per cent
increase in FDI income retention could generate about $22 billion of new
investments in developing countries.
Finally, this revamped global partnership must emphasize on issuing new SDRs
and allocating them to developing countries.
Such an approach would not only reduce developing world's immediate need to
accumulate foreign-exchange reserves for self- insurance but also release
considerable resources for development.
Alternatively, SDR holdings of reserve-rich countries could be used as securities
to leverage additional development finance in international capital markets for
use in the developing world. As UN-DESA in 2012 pointed out, a global issuance
of SDR 150 to 250 billion per year coupled with an increase in the developing
countries’ allocation share from 42 per cent to 67 per cent would generate about
$160-$270 billion. Moreover, the estimated $100 billion of ‘idle’ SDRs could be
used to back the issuance of $1 trillion in bonds (for example Green Climate
Fund)
Co-Chairs,
In conclusion, we are of the view that the sustained and higher economic growth
targets must be embedded into all sustainable development goals and strongly
supported by a revamped global partnership for development.
I thank you Co-Chairs.