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Last Updated: Feb 13, 2017 - 1:45:37 AM |
WASHINGTON, D.C. - The Hon. Fred Mitchell, Bahamas Minister of Foreign Affairs and Immigration, is pictured during a special presentation to members of the Permanent Council of the Organization of American States (OAS) on Wednesday, September 14, 2016, in the Ruben Dario Room of the OAS General Secretariat Building, 1889 Street, NW. Seated behind Mr. Mitchell from left to right are Mr. Mikhail Bullard, Second Secretary, Embassy of The Bahamas; Ms. Paulette Zonicle, Bahamas Consul General to Washington, D.C.; Ms. Tracee Dorestant, Second Secretary, Embassy of The Bahamas; and Ms. Krissy Hanna, Second Secretary Embassy of The Bahamas.
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Washington, D.C - Following is the full text of a special presentation by the Hon. Fred Mitchell, Bahamas Minister of Foreign Affairs and Immigration, during the Permanent Council of the Organization of American States (OAS) Conversation on Wednesday, September 14, 2016, in the Ruben Dario Room of the OAS General Secretariat Building, 1889 Street, N.W., Washington, D.C.
Mr. President, Excellencies, Friends,
I am delighted to join you here at this Conversation. I commend you Mr. President for organizing this dialogue which is taking place at a timely juncture – it is opportune as it has now been almost one year since the global Agreement on the bold and transformative 2030 Agenda, a few months since the historic Paris Agreement on Climate Change and other landmark Agreements such as those on Financing for Development, the recently adopted Inter-American Programme for Sustainable Development and the immediate past General Assembly’s Declaration on “Institutional Strengthening for Sustainable Development in the Americas”.
Already steps are well underway towards implementation of the actions laid out in these Agreements, such as the Ocean’s Conference, hosted by Secretary Kerry, which will begin tomorrow, and in which I am pleased to represent The Bahamas along with my colleague the Minister of the Environment, Mr. Kenred Dorsett. SDG 14, as you all know, deals with the conservation and sustainable use of the world’s oceans, seas and marine resources. In this context, The Bahamas is pleased to join the United States and others in the Safe Ocean Network, which is a global initiative aimed at combating all aspects of the fight against illegal fishing, including detection, enforcement, and prosecution. Within the next few days we expect to sign onto the FAO’s Port State Measures Agreement which deals with Measures to Prevent, Deter and Eliminate Illegal, Unreported and Unregulated Fishing. At the national level, The Bahamas is actively engaged in preparing its own National Development Plan, where we are making every effort to ensure its full alignment with the 2030 Agenda.
Your conversation today is taking place at a time when many question the role, relevancy and legitimacy of the OAS. At the same time we have to contend with the complexities of development, and the myriad challenges we all face, in some cases existential. Against this backdrop, it is my conviction that at no more time than the present can we affirm that this organization has a role to play in world, hemispheric and regional affairs. The Organization is on the front line of witnessing the problems we face in the region and is therefore best disposed to come up with solutions. Furthermore, the people of the hemisphere want the organization to play a constructive and virtuous role in all our countries, a role that facilitates mutual accountability and which also respects national sovereignty. We must remember that ultimately it is the people of the hemisphere we serve and apply ourselves as honest brokers in that role.
The organization therefore requires skillful management and strategic leadership, with a staff that reflects equitable geographical representation and gender balance and with strong governing bodies, that are well-able to provide the policy guidance and direction needed to carry out the tasks ahead. Further, we know that the OAS works best when there is engagement in an atmosphere of mutual respect, trust and a common understanding of the role that we all play in the proper functioning of the system.
The Permanent Council of Ambassadors has an important role to fulfill in this context as the organ most directly involved in the political direction of the Organization.
DEVELOPMENT FINANCE AND BANKING CHALLENGES TO INTEGRAL DEVELOPMENT
The Charter of this Organization, which forms the keystone for our work, spends a great deal of time focusing on the important area of integral development. Within this context we recognize the close interdependence between foreign trade and economic and social development.
While the challenges to sustainable development in the Americas are manifold, I will focus briefly on the continuing and real threats to integral development in my country, and in many countries across the Americas, in the areas of access to development finance and international banking.
CHALLENGES TO INTERNATIONAL BANKING
In March, the Permanent Council engaged on the emergent banking issue of “de-risking” within the Americas, which threatens to undermine the integrity of the banking systems in many countries throughout the Americas, including my own, through disrupting correspondent banking relations with global banks in the hemisphere.
“Correspondent banking”, which can broadly be defined as the provision of banking services by one bank (the “correspondent bank”) to another bank (the “respondent bank”), is essential for customer payments, especially across borders, and for the access of banks themselves to foreign financial systems. The ability to make and receive international payments via correspondent banking is vital for businesses and individuals.” Correspondent banks are private sector institutions that, pursuant to recommendations issued by the Financial Action Task Force (FATF), are required to evaluate risks when doing business with other banks and jurisdictions.
The practice of ending banking relationships with clients or closing accounts deemed to be of “high risk” is referred to as “de-risking”. Across the Caribbean region and in many Latin American countries, we have seen a surge in “the phenomenon of global financial institutions terminating or restricting business relationships with clients or categories of clients to avoid, rather than manage, perceived risk around such concerns as profitability, prudential requirements, anxiety after the global financial crisis, and reputational risk (money laundering or terrorism financing)
The facilitation of banking services is the lifeblood of any economy, particularly so in the Caribbean region. Despite the best efforts of international financial institutions to work together to increase financial inclusion, de-risking and the resultant withdrawal of banking services risks only retarding regional development and alienating regional economies from international commerce. Further, the consequent shrinking legal space in which one can transmit remittance or conduct trade across the hemisphere threatens to not only impose severe negative economic effects on our societies but also proliferate social decay.
It is important therefore for the OAS to recognize that this prevailing situation of the severing of correspondent banking relationships with commercial banks in some of our Members States by global banks based in other Member States poses a severe threat to the economic growth, social development and political stability, particularly of small economies, by undermining our ability to participate in standard international financial and economic transactions.
While States like The Bahamas are committed to full and continued participation in the evolving rules-based system of global financial governance, there is urgent need for action to ensure that banking regulations designed to foster transparency and accountability and prevent money laundering and terrorism financing do not facilitate unintended consequences of financial exclusion and economic decline of small economies by cutting their access to international correspondent banks.
CHALLENGES TO ACCESS TO DEVELOPMENT FINANCING
In June in the Draft Declaration on Institutional Strengthening adopted at the General Assembly, we as Member States acknowledged the persistent challenge many of our Governments face with respect to access to development financing.
To achieve the more than 160 targets which comprise the 17 Sustainable Development Goals of the 2030 Agenda, The Bahamas, an archipelagic Small Island Developing State, like others, will need the assistance of the international community. International commitments and national goals could be rendered meaningless if developing countries do not have access to sufficient affordable financing for development. The economy of The Bahamas, like that of so many countries of the region, is exceptionally exposed to various types of vulnerabilities including, environmental, economic and social, and other external shocks, all of which at times disrupt the planned fiscal policy of the Government that is geared towards the further development of a sustainable economy. The reverberations and duration of these shocks are protracted and much more profound on nations like The Bahamas.
We have a small population and face challenges due to our archipelagic geographical configuration. This therefore necessitates the continued maintenance of approximately 54 airports, 20 of which are international airports, over 100 public health care facilities and more than 150 public schools. Despite these immense costs of duplication of infrastructure, often my country is misguidedly dismissed as a “high income” country that is not in need of aid or assistance.
What we want is a broadening and modernizing of the development financing indicators used to assess development level and development need. We have stated, and continue to argue, that GDP per capita should not be the primary determinant for the question of international economic assistance or concessional access to development financing.
In order to meet our joint 2030 targets, the unique circumstances of developing states especially those that are among the most vulnerable such as SIDS, should be given due consideration when deciding qualifications for economic assistance and development financing.
TOWARDS OAS RENEWED RELEVANCE THROUGH MEETING REAL DEVELOPMENT CHALLENGES
It is my firm view that there remains a vital role for the OAS, through the Permanent Council, to provide a forum for the examination of the aforementioned problems and facilitation of solutions to these common challenges.
Consideration of challenges such as these undoubtedly makes real the Charter’s mandate on common and joint responsibility to seek solutions to actions or measures which have an adverse effect on another Member State’s development, particularly when these resultant conditions cannot be remedied through the efforts of that State.
Bearing in mind the convening power of the OAS, I wish to reinforce the need for an inclusive, participatory and broad-based dialogue on international cooperation in banking matters in the hemisphere and the need to move towards a uniform and level playing field in the Americas that we all desire. Further, I call on the OAS to play a greater role in encouraging relevant stakeholders in development financing to broaden and modernize the decision making criteria used to assess the level of development and development needs of our countries.
Lastly, as we move forward, the OAS must continue to strive to offer equitable political access for all Member States, large or small, developed or developing. We have to work to ensure that this Organization’s legitimacy as a political forum is maintained and that it continues to function as a place where each Member State’s issues can be brought to the table and every country’s vote and voice carries equal weight. The work of maintaining political and tangible relevance is an ongoing task and it requires that this Organization listen to Member States and optimizes use of its capabilities to meet the common and specific challenges that Member States face.
It is only through the required political focus on the real developmental challenges that we face that the promise of the OAS will be realized and this august body will animate the Charter’s commitments to helping foster appropriate conditions for integral development.
The Bahamas is committed to its engagement as a constructive partner at the OAS and I am hopeful that today’s discussions will catalyse a redoubling of our collective efforts to make this institution work better to help Member States meet the real developmental challenges of our time.
I thank you.
© Copyright 2016 by thebahamasweekly.com
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