Mr. President,

Saint Lucia gladly adds its voice to the rising chorus of commendation that has greeted your election to preside over this important Conference. We are confident that you will shepherd this gathering through the thrust and parry of debate to a fountain of rich and lasting conclusions that will redound to the benefit of present and future generations.

Mr. President, Saint Lucia has been resolute in its call for this Conference. Consequently, it is with a supreme sense of pride and satisfaction that its delegation takes its place among the family of nations at this historic event.

Saint Lucia's full and open support for this Conference has been driven by a deep and abiding concern about the way in which the global economy has been evolving over the past two decades in particular, and its effect on the poorer and more vulnerable states.

The call for an inclusive and equitable global economic system:

Mr. President, Saint Lucia has come to this scenic and hospitable city of Monterrey not to beg for international financial assistance, but rather to call for a comprehensive and dispassionate assessment of the structure and functioning of the global economy against the often repeated aims expressed in numerous UN Declarations - that of creating a secure, peaceful and prosperous world.

The decision to convene this Conference was driven by the recognition that the continuation of a "business as usual" approach will not allow a fully inclusive and equitable global economic system to evolve. This Conference will have failed if it does not result in the establishment of the requisite policies and strategies that can allow all the world's peoples to lead peaceful, prosperous and productive lives.

Mr. President, Saint Lucia subscribes fully to the principle expressed in the Monterrey Consensus, that each country must accept full responsibility for its own social and economic development. However, our experience since attaining nationhood 23 years ago, has clearly shown that sustainable development at the national level is not achievable within a global economic system that relies exclusively on the market as the alpha and omega of social and economic progress.

Saint Lucia has been pursuing many of the actions recommended in the Monterrey Consensus. A number of coherent strategies are being implemented in a number of policy areas, aimed at stabilising its economy, diversifying production, increasing productivity and boosting domestic and foreign investment levels. This is being attempted within the context of an open, democratic and accountable system of governance based on respect for human rights and the rule of law and is supported by a participatory decision making process, involving civil society and the private sector.

Recognition of the Special Circumstances of Small States:

But Mr. President, it has become patently clear that these efforts are being stymied by a range of domestic and international factors over which Saint Lucia has little or no control.

For example, Mr. President, just what can a government do to energise its private sector in the context of a population of less than 150, 000 persons, nearly half of whom are under the age of 15 years? How can a micro-state successfully overcome the limitations on the range of activities, skills, and institutional capacities that are presented by a population of this size? How does it deal with the relatively high transaction costs and the high per capita cost of infrastructure associated with the absence of scale economies? Indeed, Mr. President, our efforts at creating scale economies within the banana industry, have served only to further restrict product range and increase vulnerability to earnings fluctuations linked to adverse price movements or natural disasters. Given these circumstances, how can a small state accumulate the requisite domestic funding for large domestic projects? And how does such a state address the high income volatility arising out of commodity price fluctuations caused by external demand and supply developments, caused by adverse domestic events such as natural disasters?

Mr. President, these questions have dominated the policy dialogue in Saint Lucia's ever since it attained its Independence. They are raised here to indicate that there are certain conditions - especially those that are related to small size - that are not treatable by market-based prescriptions.

Mr. President, Saint Lucia recognises that the process of economic transformation even in large countries, is never smooth. However, the point needs to be made that in small states economic transformation is particularly difficult. For example, Saint Lucia does not have the ability to deal with income volatility arising from production-related causes by "hedging" in international financial markets. However, Saint Lucia is continuously seeking to transform its economic and social systems, by utilising earned, borrowed and grant resources to finance that transformation. While in "good" times efforts have been directed at accelerating the pace of transformation; in bad times such as those that now prevail, poor credit risk becomes a significant issue.

Challenges to National and Regional Efforts at Sustainable Development:

Mr. President, it must be noted that despite these difficulties, Saint Lucia and other Small Island Developing States in the Caribbean are not giving up on the fight. The search for solutions is a constant preoccupation. An example of the regions' resolve can be found in the decision to set up the Caribbean Community Single Market and Economy. While theoretically, this initiative seeks to provide the region's private sector with a market of 6 million people, the fact that this market is spread across 15 countries, means that high transportation and communication costs will severely limit the benefits to be gained from such an initiative.

But the greatest challenge to the CARICOM Single Market and Economy initiative comes not from within but from without.

Mr. President, the Monterrey Consensus reminds us that globalisation offers opportunities and challenges. But thus far, our energies have been consumed mainly by the challenges of globalisation. The fact of the matter, is that in its present form, globalisation is neither inclusive nor equitable. This is evident in its devastating impact on the organisation of production and on the arrangements for factor movements, trade, investment and financial flows in Caribbean SIDS. Already, the liberalisation process that drives globalisation has significantly reduced the preferential and secure market access on which small states in the Caribbean depended to maintain incomes and employment. Further, we are having to contend with increasing competition for domestic and foreign investment and human capital. In the recent past, the region has been struggling to adjust to a rapidly depleting pool of skilled labour caused by the loss of hundreds of its teachers and nurses, who have been lured away by the purchasing might of powerful nations, with whom the region simply cannot compete. And so, the region is left to struggle to avoid any slippage in the quality of its health and education services, while it seeks to mobilise the necessary capital to replace those skilled personnel.

Mr. President, the lowering of trade and tariff barriers, and the increased mobility of capital investment, have increased the level of competition faced by domestic producers in small states, without providing for the absorption and utilisation of production factors displaced by such competition. It is one thing to have a more efficient global allocation of resources; it is another when this leaves pools of unutilised resources and reduced income flows in a particular national jurisdiction, with the associated social and political consequences.

Mr. President, these are among some of the reasons why Saint Lucia wholeheartedly supports the call made in the Monterrey Consensus for "...a holistic approach to the interconnected national, international and systemic changes for financing sustainable, gender-sensitive and people-centred development, in all parts of the globe."

The Case for Special and Differential Treatment:

Mr. President, this Conference will have failed, if the many acknowledgments contained in the Monterrey Consensus regarding the special circumstances of small island developing states. Small states need to be assisted to meet the relatively higher adjustment costs that are associated with the negative, short-run outcomes that attend trade liberalisation such as a reduction in employment and output, and macroeconomic instability linked with balance of payment difficulties or reduction in government revenue.

Mr. President, Saint Lucia also welcomes the recognition contained in the Consensus as well as in the Millennium Declaration regarding the importance of SIDS being assisted to supply the requisite vocational, technical and management training and educational opportunities needed to adapt to a knowledge-based, global economy.

Mr. President, Saint Lucia would also welcome undertakings that would permit SIDS to undertake international commitments and concessions that are consistent with their adjustment capacity, development, financial and trade needs and their administrative and institutional capabilities. Saint Lucia supports the call for increased levels of official development assistance to help SIDS having the requisite policies in place for such assistance to be effective. Assistance with risk-pooling arrangements, is also needed to complement improved disaster mitigation and prevention measures which can reduce the costs of disasters when they occur.

The Call for a Transparent, and Inclusive Global Governance:

Mr. President, Saint Lucia agrees that the growing integration and interdependence of national economies make it imperative that collective and coherent action is needed in each inter-related area, involving stakeholders in an active partnership.

For its part, Saint Lucia has long recognised that there must be joint ownership of the process of change and that it is in the national interest for there to be the widest possible participation in such discourse. Government has encouraged consultations on financial management reform, private sector development, health sector reform, public sector reform, education and culture. Recently, the Government decided to consolidate its practice of dialogue and effective consultation among the social partners, on fundamental issues of economic, social and environmental policy. To this end, a National Economic and Social Council has been established to serve as a forum for informed discussion among the social partners with the aim of identifying key development challenges facing Saint Lucia in the short, medium and long-term and recommending realistic and cost-effective measures that can assist Saint Lucia to respond successfully to these challenges. The Council is also seen as contributing to the emergence of a shared vision of transformation of Saint Lucia's economy and society over the next two decades.

Similar initiatives are also being pursued at the regional level within the context of the institutional arrangements of the Organisation of Eastern Caribbean States (OECS) and the Caribbean Community (CARICOM).

Mr. President, Saint Lucia would wish to see similar arrangements established at the international level especially among multi-national organisations, such as the World Trade Organisation, the World Bank and the United Nations. Saint Lucia believes that such arrangements are critical to achieving coherence and consistency in the policy decisions that emerge from these organisations. To this end, Saint Lucia recommends the establishment of a permanent Inter-Organisational Coordinating Committee, under the chairmanship of the Secretary General of the UN. Saint Lucia also calls for the reinstatement of the UN Transnational Corporation Unit to oversee the activities of TNCs.

Mr. President, Saint Lucia reiterates its deep concern over the attempts being made by certain groups, to usurp the sovereign rights of states to set their tax policies. Saint Lucia is of the view that bodies setting norms, codes and standards on other states should be required to ensure the full and effective participation of all states in their formulation.

Conclusion:

Mr. President, Saint Lucia pledges to play a full and active role in the follow-up arrangements from this Conference. We are greatly encouraged by the resolve of the global community as, expressed in the Monterrey Consensus, to work assiduously towards the establishment of conditions that will bring about an equitable and inclusive global economy and society.

It is our hope that by the end of this Conference, it will have accepted that while market-oriented policies are a necessary precondition to achieving development, that the market cannot be relied upon as a means of distributing the gains from the global economy, neither can it be seen as being capable of correcting the systemic constraints posed by small size.

Mr. President, it is also our hope that all states will have recognised that the market is not perfect and that transparent mechanisms must be built into the global economic system to guard against market failure.

While the rationale behind this system – that of making the global economy more efficient and increasing global welfare through the use of market forces, is often highlighted – the critical issue of the distribution of these welfare gains has note been addressed, neither are the consequences of market failure.

I thank you.