Publications & Reports
Statement by Hon. Minister of Economic Development, Mr. Ahmed Mohamed at the General Debate of the 13th Session of the United Nations Conference on Trade and Development, 23rd April 2012, Doha, Qatar
It gives me great pleasure to be here, to participate in the 13th UNCTAD Conference in this beautiful city of Doha. I would like to express sincere gratitude to the Government and the people of Qatar for hosting this Conference and for the gracious hospitality extended to us all.
I would also like to take this opportunity to express our sincere gratitude and thanks to the Secretary General of UNCTAD, Mr. Supachai Panitchpakdi, for his dynamic leadership and wisdom.
Graduation from the list of Least Developed Countries is only a statistical judgement, and does not necessarily reflect the country’s ability to sustain development. As such, the Maldives considers our graduation from the list of Least Developed Countries in 2010 with a mixed notion of achievement and challenge. It is an achievement, as this sheds light to the many years of strong growth and socio economic development. It is a challenge because we are a small island state, inherently subjected to a host of economic and environmental vulnerabilities beyond domestic control.
The Maldives has a narrow economic base. The heavy reliance on imports and the relatively small export base results in an excessively high trade deficit.
The two main economic sectors of the Maldives, tourism and fishery, are heavily integrated with the global economy and external shocks are felt deep throughout the economy.
The revenue to the government has been based majorly on import duty, tourism bed tax and lease rent from resorts, until the recent introduction of more direct forms of taxation.
Upon graduation from LDC, we faced loss of preferential market access opportunities to a number of our important export markets. Further, the reduction in concessional aid flows has meant that large scale infrastructure projects that are necessary for a country with around 1,200 islands dispersed over 90,000 square kilometers had to be met largely through budgetary finances. This has added stress to an already stretched fiscal and monetary position.
The budget deficit is expected to remain close to 20 percent of GDP and public debt ratio currently stands at 88 percent of GDP and is expected to cross 100 percent in 2013. In addition, inflation has increased to 23 percent in the past 12 months, driven largely by 20 percent devaluation of Rufiyaa, increases in taxes and rising oil prices.
The point I want to make here is that despite the good progress we have made on our growth statistics and per capita income, the economic vulnerabilities and structural handicaps needs to be recognized and considered by our trading and development partners for the Maldives to meaningfully transition from a least developed country status to a developing country status.
In 2010, Maldives initiated a resolution on the development and implementation of smooth transition strategies at the UN General Assembly because we believed that such a mechanism is crucial to ensure a more targeted focus of all stakeholders towards the transition arrangements that countries like the Maldives face.
In moving forward, we call upon greater recognition of the particular vulnerabilities of SIDS, at UN level, and a better and more efficient UN framework for responding to these vulnerabilities.
Towards this end, strengthening the role of UNCTAD is a must, especially through its active participation in the discussions of the Committee on Development Policy and relevant General Assembly debates.
We are hopeful that after UNCTAD XIII, UNCTAD will have a clearer mandate, better funding and more concrete actions and predictable resources to assist the member states.
While we pursue forward in meeting the challenges that graduation has posed, I would like to take this opportunity to note the positive spirit in which some of our development partners has reacted to the vulnerabilities of countries like the Maldives. The EU has kindly agreed to extend its “Everything but Arms” preferential trade regime until 2013 and the WTO has taken a range of steps to ensure that LDC preferences are not abruptly ceased. We thank our development partners for their considerate support and assistance.
Excellencies, Distinguished delegates,
We are delighted that SIDS is coordinating as a group at this UNCTAD Conference, and Maldives is honored to be the coordinator of this group. The concerns of SIDS are a matter close to our hearts and we look forward to working with other small island developing states to make our voices heard and our interests addressed. It is also very heartening to note that the negotiation text for UNCTAD XIII recognizes and highlights the particular vulnerabilities and needs of SIDS.
UNCTAD is a member state driven process and for UNCTAD to succeed, the international community needs to redouble its efforts to make UNCTAD relevant to address the 21st century challenges that loom ahead us. Maldives stands ready to play its part in this multilateral process.
Excellencies, Distinguished delegates,
To conclude, let me extend best wishes for a constructive and positive outcome of deliberations from this UNCTAD XIII Conference.
I thank you.