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 e have
made significant progress in fulfilling our obligations to the world’s
poorest people…” was how the President of The World Bank, Paul Wolfowitz,
characterised the plan agreed upon by the world’s financial leaders to
wipe out poor countries’ debt and to limit the effect of rising energy
prices, during three days of talks, in September, in Washington DC.
 At
a time when the gap between the rich and poor nations is widening, and
there are concerns that high energy costs – exacerbated by the two US
hurricanes, Katrina and Rita, which crippled oil platforms, refineries and
pipelines along the US coast of the Gulf of Mexico – could affect global
growth, the meetings agreed on debt cancellation, developed a strategy on
energy prices and struggled with other economic issues. It was, indeed, a
historic endorsement of the debt-relief promise put forward by the G7
Finance Ministers in London, last June, and approved by the heads of G8
countries in Gleneagles in July. What entered the Washington meeting as G8
agreements, emerged as G184 agreements, carrying the full weight and
support of all 184 member states of the International Monetary Fund (IMF)
and The World Bank.
While the world’s seven industrial
powers, the so-called G7 – comprising the US, Japan, Germany, France, the
UK, Italy and Canada – met as a group the day before, finance and
development ministers of 184 nations gathered over the last weekend of
September for the annual meetings of the IMF and The World Bank to forge
agreement. Thereafter, the semi-annual meeting of the ministerial-level
development committee of the governors of The World Bank and the IMF
ratified the agreements to cancel 100 per cent of the debts of some of the
world’s poorest countries. In the final communiqué of the development
committee, shareholders did commit to preserving the IDA’s financing
capacity, dollar-for-dollar, by assuring additional funds.
The path to complete debt relief has now
been cleared. Across Africa and around the world, leaders in 38 countries
will no longer have to choose between spending to benefit their people and
repaying impossible debts – often the legacy of governments past,
according to Wolfowitz. Calling the decisions a “sea change”, South
African Finance Minister Trevor Manuel, Chairman of the Development
Committee, said the new agreement allows for faster implementation of the
internationally agreed Millennium Development Goals (MDGs).
The plan would forgive an estimated US$
40 billion worth of debt for at least 18 poor countries, most of them in
Africa. It could allow them to spend more on fighting poverty, improving
education, or buying drugs for HIV/AIDS or malaria. The money is owed to
the IMF, The World Bank and the African Development Bank. The G8 economic
powers are pledging to underwrite the debt plan by covering the loan
repayments lost. As many as 20 other countries could get relief if they
met certain conditions. That could push the total amount of debt
cancellation to more than US$ 55 billion, to be spread over decades.
The development committee also supported
The World Bank’s new Africa Action Plan and committed the bank to
increased financing of infrastructure as part of a growth agenda. Taken
together, the G8 commitments and the African Action Plan represent the
largest commitment to increase development assistance in the past 50
years. As important as debt relief is, this scaling up of assistance to
Africa is even more so – because it is a commitment to support outside the
scope of the debt relief effort. However, Wolfowitz cautioned: “Increased
assistance must be matched with strong performance by the developing
countries.”
Performance in Africa has been improving
in recent years, and there is agreement that current conditions create an
opportunity. Macroeconomic reforms have been undertaken, resulting in a
seven per cent average growth rate across Africa. But no African country
is currently on track to meet any of the MDGs. The development committee
emphasised the importance of a comprehensive, pro-poor trade agreement at
the conclusion of the Doha Round, in December, in Hong Kong – with the
ministerial-level meeting of the World Trade Organization (WTO). “The
momentum we now have must be maintained, heading into the WTO negotiations
in Hong Kong,” said Wolfowitz. “We have agreement on more aid, we have
consensus on debt relief; now, let’s complete the picture and deliver a
true development round on trade.”
Anti-poverty groups, which were pressing
for the debt plan to be agreed on, hailed the action. Getting the debt
agreement was seen as an important first test of Wolfowitz’s leadership.
He took the helm of The World Bank on 1 June, 2005. Before that, he served
as the No. 2 official at the Pentagon and was an architect of the Iraq
war.
On the energy front, finance officials
pledged to increase supplies, promote conservation and improve the release
of timely data on oil production as a way of reducing wild price swings in
energy markets. Officials “recognised with oil that a global problem
requires a truly global solution, with concerted action from oil producers
and consumers alike to take steps necessary to stabilise the market”, said
Gordon Brown, Britain’s Finance Minister.
Meanwhile, representatives of the global
travel and tourism industry met in New York on the eve of the special
general assembly of the United Nations (UN) and issued a declaration
calling on the UN and public, private and civil-society decision makers
worldwide, to encourage tourism as one of the most effective tools for
sustainable growth in the world’s poorest countries. Hailing the
declaration, the Secretary General of the WTO, Francesco Frangialli said
that tourism needs greater recognition by governments and development
institutions for its capacity to generate economic, environmental and
social benefits. It is also a sector that promotes inter-cultural
understanding and peace among nations, he added. For poor countries and
small island states, tourism is the leading export – often, the only
sustained growth sector of their economies and a catalyst for many related
sectors. It can play a key role in the overall achievement of the MDGs by
2015.
The declaration calls for:
r Tourism
to be integrated into all development and poverty-reduction strategies,
with an emphasis on positive linkages with local economic activities.
r
Increased recognition of the role of tourism in national economies, using
‘tourism satellite accounts’ to measure the scale of the sector and its
linkages with other sectors.
r Good
governance by host countries and tourism providers, with a strong emphasis
on social and cultural development, built around the WTO Global Code Of
Ethics and the campaign against the exploitation of children.
r
Mobilisation of financing for tourism infrastructure, market access, human
capacity and technologically developing states, as well as local-level
micro-credit schemes.
r Support
for the WTO ST-EP initiative to use Sustainable Tourism for the
Elimination of Poverty (ST-EP) through ecotourism, sports tourism and
rural tourism programmes at community level.
r
Recognition of the interrelationship of aviation and tourism, as well as
the need to increase air-service access to poor countries; and special
measures and funding to meet safety, security and facilitation standards
for those markets.
r Action
to harness the human-resource potential of poor people in the delivery of
quality services through the tourism value chain.
r Higher
priority for tourism liberalisation in the Doha development round, to
capitalise at the forthcoming Hong Kong summit on its potential as an
export and economic driver for small islands and poor states.
r Support
for the 2003 Djerba Declaration On Climate Change And Tourism, so that the
industry can effectively play its role in greenhouse gas reduction – and
so that destinations are protected from the adverse impacts of climate
change.
r
Endorsement of the UN Secretary-General’s initiatives to introduce
innovative financial-support mechanisms for development, while urging that
any voluntary taxes aimed at air travel respect international aviation
accords and avoid burdening tourism flows to poor countries.
r Improved
access to the UNDP’s GEF (Global Environment Facility) funding for tourism
development projects – particularly, ecotourism and water-development
projects.
The declaration was transmitted to all
states and organisations participating in the 60th session of
general assembly of the UN.
In the days following the WTO declaration
came news of the terrorist bombings on the Indonesian resort island of
Bali – yet another in a series of negative events that will surely impact
adversely on the growth of tourism, particularly in East Asia. It was a
clear reminder that soft targets like tourism hotels were easy prey to
terrorism. Bali offers an appealing target for Islamic extremists, because
it is a popular destination for foreign tourists – especially Australians.
While Indonesia has the world’s largest Muslim population, Bali is
predominantly Hindu – but is known for its liberal party scene, which
devout Muslims find offensive. Tourism in Bali had been slowly returning
to normal in the wake of previous terrorist bombings in 2002, which then
killed over 200 foreigners. Many Balinese, who depend on tourism for their
livelihood, feared that the latest bombings would once again wreak havoc
on the island’s economy.
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