International Conference on “Changing Nature of Development Aid: From Past to Future” (Istanbul, 21 March 2015)
H.E. Mr. Numan Kurtulmuş, Deputy Prime Minister and Minister of State of Turkey
Dr. Serdar Çam, President of TIKA
Dr. Burhanettin Duran, General Coordinator of SETA
Distinguished Participants, Excellencies, Ladies and Gentlemen,
It is a great honor and privilege for me to attend this important international conference on the “Changing Nature of Development Aid: From Past to Future”.
I would like to start by thanking both TIKA and SETA for having organized this timely event.
I would also like to extend a warm welcome to all of you and wish you a pleasant stay in Istanbul.
Ladies and Gentlemen,
We are gathered here today at a time when the world is faced with unprecedented economic, social, and environmental challenges that have global implications. We live in a world which is more interdependent than at any other time in human history. The benefits of globalization are not shared equally.
Moreover, the 2008 economic and financial crisis has further led to slowing of growth, increase in unemployment, fall in investment levels and an overall lack of trust and confidence towards governments as well as international institutions. Recent developments in the Middle East and North Africa as well as the ongoing situation in Ukraine, the adverse effects of climate change are all new developments that need to be addressed.
Obviously, these challenges and mega-trends have direct bearing on the topic of development. Issues such as unemployment, inequality, poverty, climate change, scarcity of natural resources, food and energy have implications for everyone. Externalities such as macro-economic instability, social and economic inequalities and conflict can have wide-ranging spillover effects.
The prevailing economic environment puts heavy pressure on and prevents traditional donor states from fulfilling their commitments in development aid. However, we should keep in mind that development aid is an important contributor to inclusive and sustainable growth at a global level. It is also essential for addressing poverty and inequalities. Official development assistance (ODA) remains an important source of finance for many developing countries. For instance, in 2012, ODA represented 68% of total external finance for development in Least Developed Countries (LDCs).
Against this backdrop, Turkey which assumed the G-20 Presidency as of 1 December 2014, has placed development at the center of its G-20 agenda. Our primary focus is on further enhancing the integration of developing and low-income countries into the world economy through concrete and growth-oriented actions.
During our Presidency, we have decided to emphasize the link between growth and investment. A particular focus is given to investment in infrastructure which is vital for the sustainable and strong growth of low income countries. We put effort into bringing together the reforms that improve the investment climate and unlock private sector investment for both infrastructure and Small and Medium Sized Enterprises (SMEs).
The deadline to meet the Millennium Development Goals (MDGs) is fast approaching. 2015 will be a key year for development cooperation. The post-2015 development agenda should be considered as a framework for developed countries to provide ODA and other means to assist the LDCs and the developing world in general in their efforts to achieve growth and prosperity.
There are basically three very important global meetings in 2015 to shape this new agenda: (i) the Third International Conference on Financing for Development (FfD) in July in Addis Ababa; (ii) the UN Summit to adopt the Post-2015 Development Agenda in September in New York; and (iii) the 21st Conference of the Parties (COP21) on Climate Change in December in Paris.
Sustainable Development Goals (SDGs) will be agreed upon and endorsed at the UN in September 2015. SDGs aim at a more inclusive and sustainable future. They require a holistic approach to development.
In this vein, as part of the efforts to modernize the concept of development finance, which is the main topic of this conference, the current definition of ODA which dates back to 1972 is at the center of discussions, especially at the OECD.
The new reality about development finance is the fact that there is great diversity of funding than just a decade ago, offering developing countries a wider array of options to choose from, with large potential benefits for their development.
While LDCs and other Low Income Countries remain highly reliant on ODA as the key source of external finance for development, access to a more diverse range of sources of finance has increased mainly for middle-income countries. Non-concessional flows, both official and private, today play an increasingly important role in this regard.
Therefore, ODA should be complemented by trade as well as private capital flows, including foreign direct investment, investment in infrastructure and microfinance facilities, which need to be mobilized into productive sectors and infrastructure projects. Engaging the private sector, philanthropic institutions and civil society in partnerships for development is essential. All existing resources should be mobilized.
I would like to conclude by highlighting two points. Despite their budgetary constraints, donor countries should do their utmost and keep their promises in providing development aid. The recipients should also do their part. They should provide an enabling business environment for donors. In this context, they should enhance their governance structure, legal framework, rule of law, transparency and accountability.
Finally let me point out with great pleasure once again that Turkey has been a dynamic actor in the international development cooperation architecture. Development cooperation has become an integral part of our foreign policy. The 3.3 billion Dollars of Turkish development aid allocated in 2013 constitutes 0.41 percentage points of our GDP.
I would like to leave the details to the distinguished experts present here with us today and give the floor to H.E. Antonio Martins da Cruz, Former Minister of Foreign Affairs of Portugal for his statement.
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