Statement by the Hon. Yuji Yamamoto, |
I. Introduction |
Mr. Chairman, Mr. President, distinguished Governors, ladies and gentlemen: It is a great pleasure for me to address the 45th Annual Meeting of theInter-American Development Bank and the 19th Annual Meeting of theInter-American Investment Corporation. On behalf of the Government of Japan, Iwould like to express our gratitude to our hosts, the Government of Peru and thepeople of Lima, for their warm hospitality. Japan’s economy is on a steady track to recovery. It is supported primarily byan increase in capital investments and exports to the Asia. To transform thismomentum into a sustainable growth against the severe fiscal situation, ourGovernment will continue to implement structural reform agenda, such as thepension reform, reform of central and local governments, postal privatization,Japan Highway privatization, and resolution of the non-performing loans problem.We will also collaborate with the Bank of Japan to overcome deflation as earlyas possible. |
II. EconomicIssues in the Region |
Now to the Latin American and Caribbean economies. Helped by the recovery of industrial economies and the rising prices of primarycommodities, the region’s economy which had remained stagnant since the 1998financial crisis has finally bottomed out, and we are now witnessing somepositive signs of recovery. Even in the face of adversity, some countries implement sound economicmanagement. The GDP growth rate for the region’s economy on the whole hasturned positive, and is expected to reach almost 4% this year. Foreign capitalinflows have also started to pick up, reversing the trend of a constant declinetriggered by the financial crisis. It should be commended, in particular, thatBrazil and other crisis countries are making steady efforts to promote reformwith the cooperation of the IDB and other international organizations. I wouldalso like to highlight that Japan and Mexico reached agreements in substance onmajor elements of the Agreement between Japan and the United Mexican States forthe Strengthening of the Economic Partnership. Having said that, however, I must point out that while many countries in thisregion enjoy higher income levels than Asia, income disparity has not improved.The region has come only half way to overcome vulnerability of the financialintermediation and administrative inefficiency, and to improve enablingenvironments for business to desirable levels. As for Argentina, in particular, while I welcome the recent signs of economicrecovery, I believe it is indispensable to restore the confidence ofinternational capital markets by solving its external debt issue as soon aspossible in order to achieve sustainable growth. |
III. IDB’sChallenges |
Against such a backdrop, the IDB must redress income disparity and developenabling environments for business in the region. To take on these challengesboth efficiently and effectively, I believe it is essential for the IDB topursue its own reform in the following three areas: first, the Private SectorDevelopment Policy, ; second, Result-based Management, and ; third, Strengthenedfinancial standing and improved accountability. 1. Private Sector Development Policy Many of the IDB borrowers are middle-income countries. In the long run, the keyto their economic growth lies in private sector lending, or public-privatesector partnerships, and the development of enabling environments for business.These are not something the Private Sector Department of the Bank and the IICalone should address. Rather, it is essential for the entire IDB Group,including the regional departments, to maximize their synergy based on acomprehensive private sector strategy, with strengthening competitiveness andimproving enabling environment as the primary objectives of IDB operations. In this context, I welcome the recently formulated Private Sector DevelopmentStrategy (PSDS). It marks the first step in the right direction. I’d like totake this opportunity to urge the IDB to promptly detail its action plan andcountry strategies based on the Private Sector Development Strategy, andtranslate them into action. In the wake of all this, there is a move to replenish its capital for theMultilateral Investment Fund (MIF). While MIF is a unique fund with a mandate tosupport micro and small enterprise, we must first give detailed shape to thePrivate Sector Development Strategy of the entire IDB Group and ensureparticipation of many donors before we negotiate a capital increase for the MIF.I hope all parties concerned will continue active discussion to this end. With regard to the task of redressing income disparity, in addition to theaforementioned support of micro and small enterprise, I think it is essentialfor the IDB to secure a social safety net, while continuing to raise efficiencyof social services delivery. For this objective, capacity building of civilservants including local government is indispensable. Also, I understand the IDB is about to conduct a review of the New LendingFramework. In reviewing the framework, particularly as for the Policy BasedLending, we need to evaluate the development effectiveness of past PBLs andcautiously examine its impact on the Bank’s overall financial position. 2. Result-based Management At the IDB, implementation of the Development Effectiveness Agenda, firstannounced at the Monterrey Summit and reaffirmed at a recent meeting inMarrakesh, has only just begun. At this stage, it is essential for the IDB to pursue result-oriented policies bydevising measurable monitoring indicators, while identifying the result-chainbetween IDB activity in each recipient country and its development effectivenessat every stage of the lending operation―from design to implementation andevaluation―not to mention Country Assistance Strategies. To implement allthis, sharing borrowers’ development plans with other multilateral developmentbanks and bilateral donors will be indispensable. I hope the IDB will formulatea more detailed action plan, by activating the Development Effectiveness Officeestablished last year. Also, for recipient countries, it is essential to prepare the data needed tomeasure the effectiveness of its development plan. That’s why the capacitybuilding effort in recipient countries is vital. Donors, on the other hand, should also spare no effort to support such activityof recipient countries. For its part, Japan will continue to support the programfor the Improvement of Surveys and Measurement of Living Conditions in LatinAmerica and the Caribbean. 3. Strengthened financial position and improved accountability The Bank’s 50th anniversary is only five years ahead. To make a further leapforward, the IDB needs to listen to the opinions of external stakeholders, andstrengthened governance to use those opinions as the food for thought for itsown capacity building. In this regard, the new capital adequacy policy the IDB adopted last year iscommendable as it contributes to the Bank’s strengthened financial position,while clarifying the responsibilities of both shareholders and debtors.Likewise, the new information disclosure policy, launched this year, is anessential step toward increased accountability of the Bank, though there is roomfor further improvements. Regarding enhancements to the independent investigation mechanism that arecurrently under study, I strongly hope that the proposal will lead to theestablishment of a creditable mechanism that can match up to the equivalentmechanisms at other MDBs. |
IV. Invitationto Okinawa (―in conclusion) |
In closing, I would like to extend to my fellow Governors an invitation to ournext meeting in Okinawa. Japan and the Latin America and Caribbean region havebuild up a trusting relationship through trade and investments over thecenturies. Our economic ties, however, can never be this strong without thehistory of emigration that lasted over a century. We are proud about 1.5 millionJapanese emigrants have crossed the sea to work as a bridge between Japan andthis region, while contributing to the economic and social development in theregion. At present, over 210,000 emigrants from Okinawa are active in variousfields in the Latin America and Caribbean region. As with Peru, it is blessed with a beautiful natural environment and vividtraditional arts. I am sure a visit to Okinawa will be a memorable experience. I’m very much looking forward to seeing you again in tropical Okinawa in Aprilnext year. |
Thank you. |