Mr. President
Mr. Secretary General 
Distinguished Colleagues 
Excellencies
Ladies and Gentlemen:

It is truly an honor to stand here today, before a group of such distinguished world leaders, and to address you on the issue of financing development in this new millenium.

For those of you who are not familiar with Palau, and I am sure there are many of you; Palau is a small island nation, located in the North Pacific. In 1994 Palau received its political independence, and since then has been working very diligently to establish a real and effective framework for the achievement of sustainable development. The ultimate goal of this framework is to provide for economic selfsufficiency.

While Palau would certainly prefer to accomplish its development goals without depending on outside assistance, we realize that certain aspects of such development are beyond our current knowledge and available resources.

Palau has a saying, "you can give a man a fish today, and he will need another fish from you tomorrow, or you can teach a man to fish today and he will provide for his own fish tomorrow." In this context, there must be a special recognition and support for those developing countries making genuine efforts to help themselves.

The Republic of Palau seeks only the necessary training, tools and initial funding to establish its own self-sufficiency. Within this context, we are very willing to accept direct responsibility for our future successes or failures. We are consequently supportive of the notion that donor nations should expect each developing nation to establish a strong policy framework as a prerequisite to the receipt of financial assistance. This will help ensure that technical assistance and direct funding contributions are not wasted through non-performance by the recipient nation.
 

We would therefore support recent suggestions put forth by President Bush of the United States, that an international financing program be established that creates real incentives for nations that seek funding from donor nations and that sets planned strategies and well defined criteria to qualify for such incentives. By incentives I refer to the implementation of measures such as:

• performance budgeting;
• requirements for balanced budgets;
• strict audit requirements;
• transparent banking laws that protect domestic depositors and restrict unlawful international transactions; and
• strong support for private sector development

Countries that put in place such policies of good governance, and thereby meet the established criteria for incentive treatment, should then be given easier access to and a larger share of the development pie made available under this program. They should also have access to an expedited process of review and distribution.

In addition, priority should also be given to nations that have established positive track records in their use of financing assistance. Past failures to use developmental funding for intended purposes and parallel failures to implement funded programs should not be rewarded. It certainly should not result in equal development funding status to those countries that have made good faith efforts to achieve the stated goals of the development projects. Developing nations that have taken the initiative to reform their basic economic and political institutions and that have strong and positive records should be placed on a fast track program to receive assistance that leads to real self-sufficiency.

The difficult aspect of this Incentive" approach to development efforts is that we must simultaneously respect the rights of all nations to define their own development plans and patterns. Clearly, development has been shown to succeed only when the ownership of such development sits firmly in the lap of the developing country.

In addition, `sustainability´ should be a key element in any discussion on the financing of development. We strongly believe that any international effort to finance development should place clear and cohesive environmental standards on types of projects funded. If the developing world seeks to achieve the historical model of industrialized development at any cost, I can assure you, the quality of life for the people will not rise. Rather, we will grow and grow and grow only to realize that our lives have far less value than the lives of our mothers and our fathers. I am sure this is not reflective of their hopes for their children nor is it our hope for our children. This is especially true for the Pacific Island Nations where sustainable development is really the only key to success.

Ultimately, we must resolve this issue through continued global strategies that successfully and consensually deal with sustainability issues. Global warming is a reality. Biodiversity is under attack. Our very way of life is changing before our eyes and we must not sit back and helplessly watch the degradation of our future.

My fellow delegates to this very important Conference; there are so many difficult issues to face in establishing a realistic and effective development financing process.

We believe that it is important to recognize that the past is not necessarily an appropriate model for the future. Rather than continue to repeat our mistakes, we must seek new models and programs that result in real outcomes. All people clearly have an inalienable right to climb out of poverty, poverty that breeds terrorism and radicalism and that limits the opportunities and aspirations of all the peoples of the world. For the good of the world community, we must establish a process for transferring development capacities and capabilities that work. To this, I say the business of "playing defense" and reacting always to world poverty and rising tensions is too costly and never adequate. Let's "play offense" and be pro-active for a change and attack the problems with meaningful and lasting solutions beginning with this conference. Thank you.