Commonwealth Finance Ministers and Central Bank Governors meet in Limassol, Cyprus to discuss global financial crisis, how it impacts on their economies and to exchange ideas on the realistic ways in which member countries can assist each other in addressing the challenges posed by the global economic meltdown.
The meeting was attended by the 53 Commonwealth Finance Ministers and senior Officials of Governments. Sierra Leone was represented by the Minister of Finance and Economic Development, Dr. Samura Kamara and Governor Sheku Sambadeen Sesay.
Prior to the ministerial meeting, senior officials and Bank Governors set the stage by analyzing how the financial crisis has evolved and how to address the systemic banking problems affecting their economies.
The Governors meeting was attended by 21 Governors and Senior Central Bank representation from 22 commonwealth Countries.
They discussed issues such as critique of past governance, which excluded developing countries membership in international regulatory bodies; recent reforms where large developing countries are represented in some committees but noting that these committees are still chaired by developed countries; the role of Commonwealth to increase the voice of the poor and smaller countries; the functions of global financial regulator in designing standards and appropriate surveillance; and the need for a more robust supervision and regulatory framework based on new rules.
Governors expressed the views that developing countries membership in international regulatory bodies could have increased awareness and provide early warning of systemic risk. Governors called for changes in the EU and US institutional regulatory framework to make it more effective.
During the plenary session of the ministerial meeting, Ministers discussed causes of the Crisis which has severely affected developing countries and reversed the gains made through painful structural adjustment programs.
The Ministers observed that the Crisis is unprecedented and no country is spared whether they had a role or not in igniting the problems. The Ministers noted that all countries economic growth rates have been reversed and the achievement of MDGS has been greatly undermined due to emergence focus on re-launching the economies to pre-crisis growth levels.
Today concerns persist about the overall soundness of banking and financial system in several countries worst affected by the financial crisis; many housing markets remain weak, macroeconomic conditions remain weak and in some advanced economies unemployment has continued to rise. Even best performing countries have lost their buoyant tourism revenues, remittances from nationals in the Diaspora have significantly dropped, huge capital outflow in fragile economies and global demand has also been at its lowest level since the great depression of the 1950s.
The Ministers agreed that the crisis has become a veritable tempest, which has affected every single commonwealth country.
In his opening statement to the Finance Ministers, the Secretary General of the Commonwealth, Mr. Kamalesh Sharma, said that no country in the Commonwealth will reach its growth potential, in 2009.
For example, one of the best performing countries in Africa, Botswana, which is a model of macroeconomic stability-has seen a swing from a 7 percent budget surplus in 2008 to a 6 percent deficit in 2009.
In his intervention, the Minister of Finance, Dr Samura Kamara outlined to his colleagues how the crisis has affected Sierra Leone through low export receipts as a result of low global demand for key exports-diamonds, low remittances from abroad, depreciation of the Leone, high unemployment rate and low projected growth rate in 2009.
The Minister informed the august body that as a result of the government strategic intervention during the hike of the crisis, Sierra Leone contained unprecedented price increases, which resulted violence demonstrations in some countries in the West African sub region in 2008.
To build on this and to re-launch the economy, the Minister said that the government agenda for change as contained in the second generation PRSP focuses on the key drivers of growth-energy, transport and roads, water, agriculture and human resource development.
While the impact of the financial crisis, precipitous decline in global trade, and the general increase in uncertainty and collapse of confidence has begun to diminish in the advanced and dynamic emerging markets, supportive forces have remained weak and there has been concern that a premature cessation of stimulus could spark a deflationary episode. Countries are therefore urged to continue with the stimulus packages to stimulate demand or consumption and increase spending in the key quick-win drivers of growth. The Finance Minister of Sierra Leone, Dr. Samura Kamara recounted various advocacy initiatives the commonwealth had launched on issues relating to gender, trade, debt relief, which forced the International Community to implement various reforms including the Bretton Woods Institutions and UN agencies. On a similar vein, he urged his colleagues to approach the crisis by having a commonwealth initiative on the financial crisis, to give more opportunity to countries to exchange ideas and map out practical ways in addressing the problem. He emphasized that this will send strong signal to the global community of the concerns and voice of the Commonwealth.
The government delegation would travel to Istanbul, Turkey to attend this year’s IMF/World Bank Annual Meetings, where the Minister will chair an African Caucus meeting to agree on the country composition of a third constituency chair at the World Bank
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