Statement by Mr. Mukhisa Kituyi, Secretary-General of UNCTAD
UNCTAD/PIFS event at the Third International Conference on SIDS
Harnessing the potential of oceans for the economic, trade and sustainable development of SIDS
Mr. Tuiloma Neroni Slade, Secretary General PIFS and Oceans Commissioner
Dr. Arvin Boolell, Minister of Foreign Affairs of Mauritius, Regional Integration and International Trade
Mr. Manualesagalala Enokati Posala, Minister for Works, Transport and Infrastructure of Samoa
Ladies and Gentlemen,
It gives me great pleasure to welcome you all, to this high-level side event under the theme of oceans wealth and aspects related to sustainable and resilient maritime transport. These two areas are of critical importance when considering challenges and vulnerabilities facing small island developing states (SIDS), as well as the opportunities and potential for economic growth, trade and sustainable development.
At the outset, I also wish to thank our partner, the Pacific Island Forum Secretariat, for the positive spirit of cooperation in jointly organizing this event consistent with the Conference theme of partners for the development of SIDS.
I would like to make some general remarks to launch our discussions
The oceans economy, also referred as the blue economy, has huge potential, particularly for SIDS. It can promote economic growth and development, environmental sustainability, social inclusion, sustainable livelihoods and the conservation of ocean ecosystems. Both the Rio + 20 Outcome Document and the Barbados Programme of Action recognize this. The oceans economy is also likely to feature in the outcome document of this Conference and possibly in the United Nations post-2015 sustainable development goals.
The oceans economy seeks to use sustainably untapped marine resources and seaways within the each country's Exclusive Economic Zone (EEZ) towards economic diversification, trade specialisation and connectivity. The economic potential of marine resources and seaways is particularly strong for SIDS, because their Exclusive Economic Zones are often much bigger than their land territories. For example, the Cook Islands have a land space of 240 square kilometres, which is similar to the size of a small Swiss Canton. But the EEZ of the Cook Islands is 1.8 million square kilometres, equivalent to over two and half times the land territory of France. This illustrates clearly where attention should be placed when engaging in economic and infrastructure planning.
We have underlined this potential in a recent UNCTAD/Commonwealth publication titled "The oceans economy: Opportunities and challenges for Small Island Developing States".
Potential for regional cooperation
A novelty in the report is the case we are making for SIDS to consider merging regionally their Exclusive Economic Zones. This would allow SIDS to address some of their common concerns about economic and environmental vulnerability, including costs, remoteness and climate change adaptation. This can be done by fostering regional cooperation, backed by international development partnerships, and by focusing technical assistance and partnerships on the oceans space. These regional EEZs could complement the terrestrial trade and economic cooperation many SIDS are promoting through regional bodies such as the Pacific Islands Forum, the Caribbean Community and the Indian Ocean Commission.
An example of this approach in practice is Mauritius' Oceans economy road map. This road map includes a regulatory review of relevant oceanic regulations, a national coordination scheme, a public-private task force, and the creation of an oceans business park and oceans research centre. Sectors of focus include sustainable fisheries, renewable marine energy, marine bio-prospecting, and marine and coastal tourism. We have honour of having among us the Minister of Foreign Affairs, Regional Integration and Trade of Mauritius, who can share with us recent experiences regarding implementation of this road map.
Maritime transport is crucial
Maritime transport is the lifeline of SIDS in supporting economic performance, trade and productive sectors, such as tourism, fisheries and agriculture. Maritime transport handles 80 per cent of global merchandise trade by volume, and the share is much higher for SIDS. The strategic importance of the maritime transport sector for SIDS cannot be overemphasized.
A widely recognized challenge facing SIDS relates to their relatively high transport costs due to smallness and inability to benefit from economies of scale. UNCTAD estimates that in 2013, the average freight cost as a share of the value of imports was about 7 per cent for developed economies, 10 per cent for developing economies and 13 per cent for SIDS. In the Caribbean, for example, average costs are estimated to be 30 per cent higher than the world average. Another problem undermining the growth of SIDS is their marginalisation from relevant international transport and trade networks. Indeed, SIDS are the worst connected whether at the national, regional or international levels. UNCTAD's Liner Shipping Connectivity Index shows that SIDS across all regions are among the least connected economies. With few exceptions, the liner shipping connectivity of SIDS has largely remained low during the past 10 years.
Also of concern are inefficiencies and costs generated by inadequate maritime transport fleets and infrastructure, as well as the high cost of fuels. Because of these, many maritime services become commercially unaffordable and unsustainable. Governments then step in to subsidize or service certain coastal shipping routes to maintain domestic and inter-island transport connectivity. This is the case of Fiji, where the government established a shipping franchise scheme in 1996 to enable private sector vessels to run services at least once a month to remote islands which would otherwise not be serviced. (Allow me here to underscore how UNCTAD has been ahead of the curve on this important issue of energy cost and efficiency, dating back to 1981. At that time, UNCTAD, UNESCAP and the United Nations Development Advisory Team for the Pacific (UNDAT) undertook a series of studies to explore developing and putting into use energy efficient government-operated vessels).
Some of these issues are raised in more detail in UNCTAD's Report entitled "Closing the Distance: Partnerships for sustainable and resilient transport systems in SIDS", which I am pleased to present to you today and make available to the conference. The Report provides an overview of the current state of play of maritime transport in SIDS. It helps to improve understanding of the key issues, identify gaps and needs as well as take stock of progress made so far. The report presents extensive information and data on shipping services, ports, freight costs, and liner shipping connectivity. It also covers cross-cutting themes, such as climate change, disaster risks, inter-sectoral linkages, energy sustainability, and financing and private sector participation in the development of infrastructure and services. The report contains suggestions on how SIDS can turn some of these transport challenges into opportunities.
As SIDS are physically, demographically and economically small, as well as remote, they can become marginalized, to the detriment of sustainable development. But, we strongly believe that together, we can help to change that. This is what we should discuss today.
The oceans economy approach and sustainable and resilient transport can offer opportunities to address some of the intrinsic economic and environmental vulnerabilities, including high cost and remoteness of SIDS. For example, sustainable fishing practices, certification and aquaculture can allow SIDS to tap into export markets while at the same time promoting environmental sustainability.
Many of the opportunities and alternative strategies identified have already been incorporated in different sections and paragraphs of the outcome document of this Conference, including sections on oceans and seas, sustainable transport and trade. There is a need for a deeper commitment by the international community, developed countries and donors to ensure that actions identified are transformed into actual technical and financial assistance programmes.
UNCTAD is fully committed to supporting SIDS in the follow up implementation of the Samoa Outcome document.