STATEMENT OF THE CHAIRMAN OF THE PACIFIC ISLANDS FORUM AND

THE PRESIDENT OF THE REPUBLIC OF KIRIBATI H.E. TEBURORO TITO

AT THE UN LDC CONFERENCE , BRUSSELS , 14 - 20 May 2001

Mr President,
Your Excellencies,
Distinguished Delegates
Ladies and Gentlemen

Mr. President, I join other speakers and colleagues in congratulating you for your appointments to lead and guide this important third conference of the least developed countries of the world.

1. At the very outset I convey to you the greetings and best wishes of the Governments and peoples of the Pacific Islands in my humble capacity as the Chairman of the Pacific Islands Forum, made up of 16 member Governments of the Pacific, occupying close to 10 million sq. km. of land area scattered over about 50 million sq. km. of ocean area, roughly 5% of the planet. I also convey to you all the respect and goodwill of the Government and people of the Republic of Kiribati, situated in the Central Pacific area on the equator and the international date line. For those of you who know very little about Kiribati then I suggest that you take a look at the CNN or BBC footage of the recent world celebration of the new millennium and you will see our people raising the curtain that historic moment dressed in their
traditional costumes and welcoming the new age, on behalf of the entire human family, with traditional songs, dances and ceremonies on the pristine white coral sand of Millennium Island set against a background curtain of coconut palms and salt bush fringing a crystalline blue lagoon.

2. 1 am grateful indeed for this opportunity to participate in this august gathering and to gain from it many useful things for the benefit of those I serve and also for the privilege of sharing with you the views and experiences of the Pacific least developed countries, (LDCs ), in general and the Republic of Kiribati, in particular, as one of the smallest, the most disadvantaged and the most highly vulnerable member of the Least Developed Countries in the world.

3. May I also take this opportunity to place on the record our heartfelt appreciation to the UN Secretary General and the other officers and staff of the UN, in particular the UNDP office in Suva, and also to the European Union and the host country, Belgium, for the efficient organisation and hosting of the
Conference.

4. I also wish to pay my respect to His Majesty the King of Belgium and to the Government and people of Belgium and to also thank His Majesty for all the wonderful Belgian kindness and hospitalities that have been extended to us since we arrived in this beautiful city of Brussels which reminds me of a pleasant historical tie, between the people of Belgium and part of Kiribati, something that I
had the privilege of relating to His Majesty at yesterday's Fundecor ceremony, a historical tie which began with a Belgian missionary who arrived in Kiribati over a hundred years ago and was so loving, devoted and committed to his congregation, so much so that the people were deeply touched and decided to name their village as Belgium, written in the vernacular as Borotiam but pronounced `Borosiam,' a name which they have proudly kept to this day as a symbol of their everlasting appreciation for the Belgian sacrifice that had contributed significantly to their progress and wellbeing.

5. Now that members of my delegation and I have spent a few days in Brussels and as I share my experiences of the host country with fellow delegates I begin to feel the depth of the special warmth and the many other good gifts of the human heart that the Belgian people are blessed with, a pleasant experience which is inspiring and empowering to those of us who are here to seek a way out of poverty for our people. Thank you our Belgian hosts for showing us the way!

6. Mr. Chairman, when I first received an invitation to attend this meeting I must admit that I was not absolutely certain what the meeting was for and what are we to achieve from it that would dramatically change things for the better. I knew that it was a conference of the so called least developed countries of the world, countries that have failed to score a pass mark in an economic development yardstick that must have been set several decades back by the United Nations.

7. So I set out to this conference not really sure as to how I should play my part other than going through the normal exchanges of information and ideas that goes on in every international conference. In this connection I must thank all those who spoke at the opening session yesterday for they have really enlightened me that there is something far more fundamental for the world and the entire humanity that we should really be focusing on at this conference- the fundamental problem of human suffering in all its forms and manifestations and how we can collectively tackle it within the narrow context of the LDC grouping and the wider context of our broader partnership with the UN system, the World Bank, the World Trade Organisation, the European Union, the Commonwealth, regional organisations, including the Pacific Islands Forum, the private sector, the NGOs and other parts of the civil society.

8. I have therefore decided to focus the first part of my statement and discussion on, what I believe to be, the most fundamental questions before us given the broadest definition of human poverty by President Obasanjo of Nigeria and the way to deal with it through empowerment of the people in poverty themselves as articulated by the President of the World Bank and also in the famous Chinese proverb of Confucius that says that if you really want to help a starving man don't give him the fish but teach him how to fish. The second part of my statement will be on the challenges facing the Pacific islands, in general, and Kiribati, in particular, in their development efforts.

9. The first fundamental question is what else do we need to do, individually or collectively, in addition to what is already in place, to help solve the terrible miseries of the landless, the shelterless, the foodless, the clotheless, the peniless, the helpless and the unloved people in our families, villages, towns, communities and the world at large.

10. The second question is how do we, individually or collectively, go about doing the additional works or tasks that we need to do to help save the poor people in our respective countries and the world at large.

11. The third question is how could we stop the further proliferation of poverty in our communities or can we totally eliminate poverty from the surface of the earth. Related to this is the question of whether or not there are cultural practices and institutions in our countries and communities or are there ideologies, practices and institutions at the international or global level that are inherently inclined to breed and perpetuate poverty in its various manifestations.

12. On the first and second questions, relating to other additional tasks to be undertaken for the poor and how do we go about doing it, I would propose that individually we should be given time of about a year or two to formulate with our own people from all walks of life, and with the technical guidance of poverty alleviation experts, a nationwide poverty alleviation programme that is targeted on the active participation of the poor people in our communities as earlier addressed by the President of the World Bank. On the completion of this draft programme detailed costing could be drawn up by or in consultation with relevant aid agencies, financial institutions and major development partners where further scrutiny of the programme and its various activities and sub activities is carried out to ensure that the programme will be most effective on the poorest people of our communities. The UN Secretariat or a specialised agency of the UN and the World Bank could then be tasked to oversee the programme from the initial formulation stage, the scrutinising, the funding, the implementation and the periodical appraisal to the time all the activities have been successfully completed and the targeted poor have celebrated their victory over the evils of poverty. In order to get a feel of how other LDCs are progressing with their programmes and to learn from each other's experiences, I would suggest that
information sharing and regular conferences be encouraged and funded by the UN and our development partners.

13. On the third question on actions needed to stop the further spread of poverty or the eradication of the root causes of poverty in the various adverse cultural practices and faulty ideologies that have become institutionalised at the community and some at the global level, I would like to say that I take the view that time has come for mankind to reassess its many cultures and to critically question its own civilisation at the various social level as I believe much of the poverty that we see today is a mathematical function I often describe as a misfit between a human being, the small organism, and the society, the larger `organism' comprising the man made social, cultural, political, economic environment and institutions, surrounding that human being. I do not wish to be too dogmatic about this but, from my limited practical experience of dealing with the poverty problem, I know this is true in my own country and it constitutes one of the greatest challenges of our time. The alternatives before us are (1) that we either re-shape the small organism to fit the larger organism, (2) we re-shape the large to fit the small or,(3) we do a bit of both. Mr. President, in Kiribati we have adopted the third approach and we are beginning to see some encouraging results.

14. 1 would therefore recommend to my colleagues that they consider this approach seriously individually within their own poverty alleviation activities and that we collectively examine the relevance of this `a bit of both' approach in tackling the existing misfits between an individual LDC and the larger global system in the global village.

15. While many cultural practices and institutions represent everlasting moral and natural truths that should be guarded and preserved at all times there are also a number of traditional practices and institutions that breed more vice than virtue and, I would suggest, that these be reviewed and modified. By way of illustration, the old cultural attitude towards women as only fit for domestic duties in the pre-industrial revolution period has to give in to one which encourages women to pursue any career of their choice, even if it means choosing a career which traditionally favours the more muscled gender. This requires a simultaneous adjustment of both the society and the woman to avoid or minimise any misfit. There are many other areas of misfits that one can refer to in any culture or any LDC. At the regional, international and global levels I know there are also old and outdated perceptions, practices and institutions that have created more misfits and poverty than otherwise, particularly at this time of
rapid changes and fast sweeping globalisation resulting in a global environment in which the survival of the fittest is the name of the game, making it almost impossible for any LDC to survive on its own effort. In this connection I would re-echo the call by a number of leaders at the UN millennium summit last September, calling on the United Nations to urgently consider the proposition of creating some global financial control mechanism, more effective than existing arrangements, so that the world economy can be looked after by a body which is truly democratic, transparent and accountable to the Governments and peoples of the world.

16. Having contributed fundamental issue at stake let me now share with you how the Pacific Islands in general and Kiribati in particular have attempted to develop their economies in the face of many challenges and obstacles.

17. Mr Chairman, it has been almost 30 years since the plight of LDCs was given due acknowledgement by the United Nations and the international community. Such recognition is gratefully acknowledged and we believe it is a positive step forward in the right direction for all humanity. In that span of time however, it is saddening and alarming to note that there is still persistent socio-economic underdevelopment of Least Developed Countries and they continue to be marginalized in the global economy and world trade of this modern age. Obviously we cannot afford to allow this trend to continue. We must all work together to reverse the trend for there is too much at stake. We must do a lot more than merely talking about what went wrong and how such wrongs could be corrected. We must be more united, pragmatic and proactive in influencing the future direction of mankind and the planet we live in to ensure there is always the right balance of power or constant harmony between the free economies and the regulated economies, between the most highly monetized modern economies and the least monetized traditional societies and between the donor driven and the recipient driven economic development as, I genuinely believe, the over shift of the balance towards the free market mechanism and the highly monetized and non traditional societies and the predominance of donor driven development assistance over the real needs of the receiving people, sadly accounts for much of the failure of the LDCs, including Kiribati and the other island nations of the Pacific to meet the benchmark that were set by the United Nations 20 years ago, a sad episode that we are all here to review. It would be imprudent for us to at this time to leave this review conference without any clear idea of the fundamental factors that accounts for the failure of the LDCs in the past 20 years. It would be like treating the symptoms on the skin of a patient without a clue as to the internal causes of such symptoms. This first year of the new millennium is the right moment for a total rethink of what we have gone through and what are we to do next. Nowadays people speak and sing about better world while leaders and experts preach about world peace, social stability and good governance. At the dawn of the new millennium the people of Kiribati lit a traditional fishing torch to symbolise mankind's hope for a world of peace, harmony and happiness in the new millennium. But how can these noble goals be achieved when clearly Least Developed Countries simply lack the basic prerequisites for them apart from the harmony with nature that most of us seem to enjoy far more than our counterparts in the developed countries.

18. Social stability in society is enhanced by good governance when the people are happy and satisfied because their needs are being adequately provided for. Good governance on the other hand, would be difficult to sustain if it were not supported by a conducive environment such as a strong and healthy economy. Most Least Developed Countries are stuck in the vicious circle of not being able to adequately
provide for their people despite specially designed programs over the years to assist them out. In this meeting therefore, it is important that we as stake holders speak out our issues frankly to enable appropriate programs to be developed for the future direction of our development. By the same token, we must also ask that our audiences and the international community at large pay more attention to what we have to say and to be more tolerant to our needs and concerns. Experience have shown that when
it comes to national and self interest LDCs interests will always come second to the interests of the more advanced and more powerful bigger countries, even when it becomes a question of basic survival for LDCs. This makes us feel that there is no such thing as a pure global interest based on universal principles but what we see and hear are national interests dressed in charitable and principled words that are really hollow and this is the reality of partnership that we small LDCs must learn to deal with- regrettably a world more materialistic and less principled.

19. Mr Chairman, a case in mind here that I would like to briefly mention to illustrate my point is the deliberate delaying tactics adopted by some developed countries on grounds of national interest. The Kyoto Protocol is an important issue not only for Kiribati and other low lying LDCs but more importantly for the whole of humanity. For us the Kyoto Protocol is an issue of human survival for us and a large part of humanity. Given current trends, scientists believe the whole of Kiribati will be under water within the next 50 or so years. The Kyoto protocol is our best hope to avoid that catastrophe. Our discussions here at this very conference about good governance, social stability and world peace would otherwise be meaningless. And the need to be in harmony with nature is meaningless as nature would have been destroyed when the islands have disappeared under the rising tides.

20. Mr Chairman, our message in this regard to the countries dragging their feet over the Kyoto Protocol and to this meeting should be simple enough. We pray and call upon them to reconsider their attitude and approach to the Kyoto Protocol. We would also like to call upon the international community to take heed of our critical situation and to take a more pro-active and committed role in advancing the principles
of the Kyoto Protocol and in saving the planet earth and its various life forms, including human life. Without the collective commitment of all governments and peoples to make the world cleaner and greener the future of people in Kiribati and other low lying atolls and coastal areas would be uncertain. In fact we are already being labelled as the most endangered members of the human species. However if the world is to continue playing delaying tactics about the Kyoto Protocol then my simplest advice is to completely forget about it, give the scientists and the politicians a break and to pray to Almighty God to take over the issue.

21. Mr Chairman, as indicated earlier I will express a number of concerns on behalf of the Pacific Islands Forum, a regional association of sixteen sovereign nations of the Pacific that has been in existence for some 30 years. The Leaders of these 16 independent nations meet every year to discuss issues of importance to the region in the areas of economic, trade, international and political issues. It is
therefore appropriate for me to provide you with some regional perspective of the LDC issues at stake before I give an overview of development in my country.

22. The Pacific LDCs- Vanuatu, Samoa, Kiribati, Tuvalu and the Solomons Islands face similar development constraints as other countries in the Pacific. These include smallness, isolation limited infrastructure and susceptibility to natural disasters. As a consequence of these factors they have limited physical and human resources, face high production costs being unable to exploit the economy of scale
and therefore are less competitive in the world market and unattractive to investment.

23. In addition, Pacific LDCs along with other Pacific Islands faced declining level of aid and steady erosion of preferences as a consequence of trade liberalisation by their major trading partners. These, coupled with globalisation of aid, Pacific LDCs will need to adjust to more competitive international environment. This is a serious difficulty for Pacific LDCs given their dependence on a few major exports commodities that rely on preferential access to major markets and physical constraints that limit their ability to diversify their economies quickly. I am sure that most of our concerns will be shared by the other LDCs from the other regions of the world.

24. However, given the realities of the new world trading environment and the pressure for trade-led economic reforms to sustain their economies in the long term the Pacific LDCs recognise they can no longer remain isolated from the world economy. The Pacific Island Forum Secretariat, which is the Secretariat of the Pacific Islands Forum, has been assisting Pacific LDCs improve economic benefit from trade and investment through various programmes and in pursuit of supportive policies in international trade.

25. As part of the wider economic reform to respond to globalisation and facilitate integration into the world economy the Leaders of the Pacific Island Forum in 1999 took an important position to establish a Pacific Free Trade Area. This Free Trade Area is currently being negotiated among fourteen countries of the Forum as a first step. This "stepping stone" approach will ensure that our developing countries and particularly the small island states and the LDCs do not suffer from the pains of adjustment they will have to undertake.

26. The multi lateral trading rules of the WTO have significant implications for Pacific LDCs. While the WTO objective of creating a more open, transparent, equitable and secure environment for global trade is laudable, LDCs are unable to benefit greatly from this for a number of reasons. Of the Pacific LDCs only one (Solomons Islands) is a WTO member and two (Samoa and Vanuatu) are observers since they are in the process of accession. The Pacific LDCs face a number of problems relating to WTO rules. Once such area is accession to WTO. The frustrating experience of Vanuatu with their accession is an example. Vanuatu has been trying to accede for the last six years but have yet to achieve this. Vanuatu's experience is becoming a real deterrent to the accession of other Pacific LDCs and indeed are the Pacific Island Countries. Clearly there is a need for an accelerated accession provision for LDC states that have a very small share of global trade.

27. The Pacific LDCs require capacity building at various levels to adjust successfully to the new competitive environment created by the WTO. However it must be recognised that no matter how capacity building is put into a small and isolated LDC it will always remain small and handicapped to compete equally on a level playing field and there must always be some flexibility in the international trading rules to cater for the special circumstances of the small LDCs.

28. We are pleased to know that the EU, Canada and other countries have provided improved market conditions for LDCs. For the EU this include the duty free entry of generally of all LDC products by 2005. In this regard LDCs themselves have to work on their supply side constraints to take advantage of this market access.

29. The Special and Differential Treatment (SDT) allowed developing countries and LDCs lesser reduction commitments and longer time frames to implement their obligations, but the implementation of SDT provision involving developing countries' assistance showed little progress. This need to be taken seriously.

30. While assisting individual LDCs within the Programme of Action that is being developed it may be appropriate also to allocate resource on a regional that can be used to address common issues. The meeting may wish to consider this as well.

31. On the question of Good Governance the Pacific LDCs, as members of the Pacific Islands Forum, have adopted the eight principles of accountability and have also endorsed the Biketawa Declaration to further cement their commitment to democracy and the rule of law.

32. Mr Chairman, allow me now to briefly give an overview of the economic performance of my country in the 1990's.

33. In the five-year period 1995 - 1999, the current price gross domestic product (GDP) of Kiribati has enjoyed a continued increase of 21.5% per annum. This is equal to an average annual growth rate of 5% which, in real terms is equivalent to 3.3%.

34. In per capita terms, real GDP had increased from $775 to $805 equivalent to an average per annum growth rate of only 1.0%. Government contributed an average of about 42% of GDP for the period. Inflation increased at an average annual rate of 2% per annum.

35. Total formal employment increased at an average annual growth rate of 6.0%., and in trade, there was an upward trend in external trade.

36. Imports exceed exports by about 5 to 6 times in value terms, whilst Government recurrent expenditure for the period also increased at an average of 5% per annum.

37. The major policy thrust for the period was to make government more efficient and responsive to changing growth and developmental needs.

38. Specific economic reforms include; restructuring the economy in favour of both community and business led activities, rationalising the role of government and adoption of value for money audits.

39. A program of action for the implementation of these strategies identified five key policy priorities as follows: Reducing the relative size of government, reform of the public enterprise sector, facilitating private sector development, encouraging foreign investment, and ensuring that sector policies are consistent with national priorities.

40. Mr Chairman, the following are important factors that exert a lot of influence on the country's development objectives;

41. Due to its small size, environment and its conservation are very important to Kiribati. In this respect, Kiribati has been a strong supporter of the Kyoto Protocol. This is so due largely to the likely rise in sea level as a result of the Greenhouse effects. To control potential adverse environmental effects, the Government has implemented an Environmental Act and Regulation. The Act not only provides for environmental impact assessment, development and pollution control but also prescribes penalties for non-compliance.

44. Human resources development has been one of the driving factors constraining the country's development and the pursuit of its economic reform programs. Apart from the shortage of skills and difficulty in accessing fund for tertiary education, Kiribati is still making enormous efforts to develop its manpower requirement to face the growing population and demand from government and the private sector. In support of this effort, government has been pursuing a policy objective for the education sector that achieves high quality standards, broad coverage, relevance and cost effectiveness.

45. On gender issues, traditionally, women's place was in the home. Their lives were focused on fulfilling the roles of the mother, wife, sister and daughter. These values have slowly changed. Kiribati has endorsed the Pacific Platform for Action in 1994, making International commitments to promote the advancement of women. Kiribati has ratified the Convention on the Rights of the Child in 1995. It has also launched an awareness program on the Convention on Elimination of Discrimination Against Women (CEDAW and now studying the possibility of ratifying the convention after a number of reservation points have been cleared. In recognition of the need for the promotion of women, government has provided Institutional Strengthening of Women's Affairs, supported the Gender Sensitisation Program and has helped in establishing Outer Islands Women's Co-ordinating Committees.

46. On the issue of Governance, to bring about greater efficiency in the Public Service, reforms have been directed mainly at increasing transparency and accountability and at making services more delivery oriented.

47. Since Independence, Kiribati has been blessed with a stable democratic political system where everyone's right and desires are respected. and the government has been in the process of pursuing the so-called Eight Principles of Accountability as adopted by the Pacific Islands Forum.

48. At the same time Kiribati recognises that good governance demands transparency in the design of economic reform programs, the involvement of both the private and the public sector, civil servants and community representatives. It is also mindful of the fact that strategies should take account of appropriate sequencing and that co-ordination should be developed through open dialogue and a consultative process.

49. In pursuit of that, government has been putting a lot of consultative process in the formulation of major policy reforms. As evidence of that, last year the National Development Strategy was drawn up after a series of forums involving representatives from the rural and outer islands, the private sector, parliament and NGO's. The forum was co-ordinated by the National Planning Office of the Ministry of Finance and assisted in this exercise by ADB Consultants. The NDS form the basis of this presentation.

50. Mr Chairman, Like any other developing countries, Kiribati fully understands and appreciates the essential role of the Private Sector in the development of the country. In this respect, government has assisted through the creation of an enabling environment for private sector growth and development. Government has also established a Private Sector Consultative Committee (PSCC) and a Commercialisation Committee. The PSCC was responsible for the drafting of the Small Enterprise Development Act, which reduces the need for investors discretion, eliminate the need for feasibility study and enable the automatic issue of work permits to potential investors.

51. With the lack of lending opportunities, the bulk of its small surplus reserves (by world standard) are invested overseas. At present, a capital market does not exist. The country recognises however the need to introduce new banking registration in order to encourage domestic savings and investments.

52. Funds from ODA have helped lift the living standard of Kiribati and enable it to integrate into the global economy. Certain concessions however such as preferential export to Australia and New Zealand under SPARTECA and to Europe under the LOME Convention could not be fully utilised due to the small size of the economy and the lack of exports.

53. The country's debt burden is not a problem. For the period, it has on average been less than 0.3% of government revenue and slightly more than 1% of exports.

Programme of Action 2001- 2010

54. For the next ten years, Kiribati like any other developing country has a vision:

55. In that vision, Kiribati aspires that by the end of the decade, it will have achieved a significant increase in real per capita income, along with a steady growth in employment.

56. Within the region, we hope Kiribati will be among the leading countries in gaining improvements in education, health, environment protection and social indicators.

57. Public Sector reform will have raised productivity of the civil service, together with customer service standards and managerial accountability.

58. Through structural reforms, Kiribati will have established an effective enabling environment to sustain the significant social and economic growth, which it aims to achieve in private sector output and employment.

59. To achieve that vision, the following strategic outcomes are being pursued :

- Firstly, sound macroeconomic framework. Like other economies, Kiribati is currently pursuing conditions such as price stability, wage levels consistent with labour productivity and rate of inflation, prudent fiscal management and a sound balance of payment.

- Government fully understands and supports the urgent need to improve communications and levels of co-operation between government, non-government and the private sector.

- With the population growth rate of 2.3%, it is forecasted that the number of young people entering the labour force will average around 1100 - 1200 each year for the foreseeable future. Since the public sector cannot provide employment opportunities for this number, efforts have been made to increase private sector employment. To achieve this, government has strongly support and is committed to restructuring and refocusing the economy in favour of the private sector.

- With a narrow export base and heavy reliance on fishing license fees, the country is vulnerable to large fluctuations in external receipts. Consequently, the major focus has now been shifted to tourism and development of a variety of marine exports. Efforts have continuously been focusing on the diversification of current limited export base.

- To enhance capacity for human resource development, traditional and cultural institutions are strengthened and education and training institutions have been targeted to try and improve their efficiency and effectiveness in delivering the required educational and training services. Junior Secondary schools are being built on every island to ensure all children of Kiribati receive a basic education for life up to Form 3 level or 9 years of formal schooling. Kiribati is also in the process of adopting a population policy that addresses the management of high population density areas and the need to lower population growth. Partnership between the government and the Churches and other NGOs in the developing the talents and full potentials of youths, women and the handicapped have also been strengthened.

60. These sum up in a few pages some of the concerns of the Pacific islands and report to this conference on the efforts, the struggles and the aspirations of the people of Kiribati in their continuous endeavour to do move forward with the rest of the world. They know that they are part of the Pacific and the world at large and cannot survive or develop on their own without the encouragement and partnership of others and without a supportive larger organism around them made up of the regional and global environments. They know that they have a part to play and that the full weight and responsibility for a better Kiribati in the future falls squarely on their own shoulders.

61. To rise above the LDC line is not an easy task for Kiribati and for the other island countries of the Pacific. It requires a renewal of commitment to the tasks of development. It also calls for a critical look at the philosophies underpinning the concept of development. It also requires a deeper insight into the factors that cause poverty and an inward looking into our education system and our cultures to minimise the misfits between ourselves and the society around us so that we may feel more empowered and confident and in turn help turn the weakness and helplessness of the poor into strength and meaningfulness. I believe it is now time to act in solidarity with all our partners to make a difference to the world so that one day the world will be completely free from the evils of human poverty and suffering.

62. I believe that together we can do it and together we can make it.

Thank you.