The Commonwealth Secretariat’s Economic Development Programme aims to assist member states to take advantage of opportunities for economic growth as well as to improve those countries’ abilities to manage their economic development in an equitable and sustainable manner.
Supporting social and economic development is one of the Secretariat’s twin strategic objectives, and promoting higher living standards for the people of the Commonwealth has been a constant in its work since its establishment.
In discharging this role, the Agreed Memorandum on the Commonwealth Secretariat, which first set out the purposes of the Secretariat in 1965, identified two broad areas of activity in the economic sphere: the first was the provision of analysis and ‘factual information’ to the membership on areas of interest; the second was to conduct development projects.
Equally relevant – and a guiding principle of all Secretariat activity – is the emphasis placed in the agreed memorandum on adding value to the international system and not duplicating activities which are undertaken by others.
Although the line between ‘analysis’ and ‘development project’ is easier to define in theory than in practice, the emphasis in the Economic Affairs Division’s (EAD) work (see below) is on the part of the Secretariat’s remit which deals with the understanding and shaping of developments in the global economy for the benefit of the membership. In this work, it undertakes three interrelated functions:
- providing analysis and interpretation of the global economy for the benefit of the Commonwealth countries
- putting across the case for the membership need in international settings, and
- supporting members in achieving their domestic and international economic objectives.
The other Division also responsible for Secretariat work in this area is the Special Advisory Services Division (SASD) which focuses its assistance in the following areas: debt management, economic and legal services relating to the management of natural resources and maritime boundaries, enterprise and agriculture, and trade.
Meeting the needs of small states
Both EAD and SASD place particular emphasis on the needs of the 32 small states which are members of the Commonwealth. These countries face inherent economic disadvantages. For example, the size of their domestic markets limits their ability to develop globally competitive industries to create jobs and income for their citizens.
This also limits these countries’ ability to diversify their economies to protect themselves against economic and other shocks when they threaten livelihoods. In addition, for the many small countries of the Commonwealth that are also island states, there are challenges posed in physically gaining cost-effective access to world markets. Finally, because of the sheer diversity of problems facing any nation, small states frequently lack capacity in policy-making to meet all the challenges they face.
As a result, supporting these countries in their economic development has been a priority for the Secretariat over many years. The way in which its work in this area is organised illustrates how the issue of economic development is approached more generally within EAD. It also shows how the philosophy underlying the Secretariat’s founding document is reflected in meeting contemporary challenges.
The Secretariat assists small states through two main channels. First, it assists these countries to shape the international environment. The Secretariat has been at the forefront of getting the particular needs of small states recognised in the international system and their voices heard. These countries face a paradox. No group is more exposed to the impacts of global events on their economies; but no group is less able to shape those global events.
To partially address this paradox, the Secretariat has pioneered – working often in concert with others – the development of stronger networks of support for small states. A Small States Forum – which grew out of Secretariat work in this area and is now organised with the World Bank – meets annually to monitor the responsiveness of the international system to small states’ needs and to provide a mechanism of mutual lesson-sharing and support. To deepen this collaboration, the Secretariat is working with stakeholders to break new ground by promoting new networks through which small states can be supported and recognised in the international system.
An important part of ensuring that the needs of small states are recognised in the international system is to make information about those needs easily available. This has led to the establishment of an online database of development indicators by the Secretariat which was launched in the past year. By assembling all the economic information on small states it ensures that hardpressed policy-makers have easy access to the data they need.
This work in strengthening the voice and support systems for small states in the international arena is complemented within the Secretariat by work to assist small states to meet their particular needs. Ground-breaking analysis taken forward by the Secretariat and the World Bank in 2000 on methods of addressing the challenges in small states – updated following a review of progress in 2006 – is the foundation of the Secretariat’s practical work. In the past year, there has been a particular focus on supporting countries in the development of plans for strengthening the resilience of their vulnerable economies. A key part of this work has been the development of resilience indicators working closely with the University of Malta. Building economic resilience in small states gives more detail on this work. Overall, the focus on small states exemplifies the Commonwealth’s emphasis on valuing the potential of all countries, regardless of size.
Supporting an open and fair trading system
Similar issues shape the Secretariat’s work on trade. Commonwealth countries are, on average, more integrated with the global economy through trade than other countries. A commitment to an effective and open trading system is one of the uniting economic characteristics of the group – but the smallest and most vulnerable members of the Commonwealth are especially trade dependent. This has been a priority area for the Secretariat for many years, but its importance has again been highlighted by the recent economic crisis. For most developing Commonwealth countries, it has been the dramatic reversal of trade flows that has been the principal channel through which their economies have been affected by the crisis. This has reinforced the need for Commonwealth work for a stable and fair global trading system.
Many parts of the Secretariat are involved in different aspects of supporting members who realise the potential of trade in driving national prosperity. Within EAD, for example, there are a number of overlapping and mutually reinforcing areas of activity, united by the overall objective of achieving a trading system that supports prosperity for all. With this goal in mind, capacity-constrained member countries are assisted through analysis directly relevant to international negotiations and the provision of training.
As progress towards conclusion of the Doha Development Round of multilateral trade negotiations has been slow, the Secretariat has supported members in the understanding and negotiation of regional trading agreements. Many members have a direct interest in the negotiation of Economic Partnership Agreements (EPAs) with the European Union. The Secretariat has been engaged in ensuring that information flows across the Commonwealth so that members in different regions can learn from each other and enhance the benefits for their people as a result. Additionally, the value of the Commonwealth in supporting members has been seen in the past year with the convening of a meeting at the request of the European Commission, under the auspices of the Commonwealth, to exchange ministerial views about the impact of the EPA process.
The second area is the analysis of the changing global trading system. The global economy is altering at a bewildering speed and with it the opportunities for trade are also changing. The Secretariat’s analysis of these trends is provided to help policymakers in member states identify the opportunities that will in turn allow economic growth to flourish. This includes understanding the impact of the changing composition of global income provided by emerging market countries on trading opportunities and the analysis of how the benefits of trade can be maximised for Africa.
This high quality technical work supports members in creating the trade that supports the livelihoods of many in the Commonwealth.
Making finance accessible
National prosperity also depends on accessing the necessary finance for investment whether from domestic or external sources. The factors that support high levels of investment are complex, but the Secretariat works to make a contribution to facilitating these needed flows of finance. To directly support investment flows, the Secretariat is supporting countries in the development of a template for foreign investment under EPAs. It has also worked with partners in the private sector to help the creation of a vehicle to deliver US$400 million of investment in Africa. At the other end of the scale, projects are undertaken to support investment in small- and medium-sized enterprises. This work involves close collaboration between public and private sector partners.
Another aspect of realising higher levels of investment is the existence of strong financial systems in member countries with the ability to channel sufficiently high levels of saving into effective investment. Through EAD, the Secretariat works on both sides of this equation. Through the promotion of financial literacy among youth, the importance of saving and taking a responsible approach to the use of credit is advocated. This programme has had a direct effect on the realities of saving in a number of Commonwealth countries.
Equally, the recent global financial crisis has put a new emphasis on the need for effectively designed and consistently implemented regulation in the financial sector. In the past year, efforts have been taken to strengthen insurance regulation in Africa. Future work is being guided by an analysis of the needs of the membership based on a survey of the membership.
Shaping the global environment
Additionally, the Secretariat undertakes to tackle global issues of relevance to the membership. An example of this is the work undertaken in response to the remit from the 2007 Commonwealth Heads of Government Meeting (CHOGM) on reform of international institutions.
International institutions are the chief means for promoting the necessary wider international co-operation. In this area, the Commonwealth is working as a group to identify common interests across the membership and – when identified – pursue them in the interest of all the members.
This is an approach that was also pursued in the advocacy of successive waves of debt relief through the Commonwealth. All countries eligible for debt reduction have now completed the international processes of debt relief which has led to just under US$50 billion of debt being wiped out and the gains benefiting millions of the poorest in the Commonwealth. The Secretariat is now working on how best to support these countries in gaining the finance to achieve the UN Millennium Development Goals.
Finally, many Commonwealth countries have established international financial centres as a means of bolstering economic growth and achieving their development objectives. The practices of some of these jurisdictions have been the subject of ongoing controversy and have been brought into renewed focus by the G20 grouping over recent months. The Secretariat is committed to supporting a consensual conclusion to the process of increased transparency in these jurisdictions.
Debt management programme
Although started in the mid-1980s as a response to the so-called Mexican debt crisis, the Secretariat’s programme of assistance in debt management, spearheaded by SASD, is as relevant today as it was at its inception. The financial turmoil of the past two years has aptly demonstrated that prudent debt management remains an important tenet of any country’s macroeconomic policy.
Over the years, the debt management programme has evolved to reflect the changing nature of the debt challenges that member countries have faced over the years. A key component in the integrated programme of assistance in debt management is its highly regarded debt recording and management system (CS-DRMS). Installed in 60 Commonwealth and non-Commonwealth countries, the software provides a state of the art facility to record, manage and analyse all categories of debt, whether external or domestic, public or private.
Through SASD, the Secretariat also provides advisory services in legal and institutional matters (for example, the setting up of debt management offices) as well as training in various aspects of debt recording and management (including the undertaking of debt sustainability analysis and the formulation of debt management strategies). It is currently developing a suite of e-learning courses in debt management with the assistance of the Commonwealth of Learning.
The Secretariat is increasingly focusing its efforts on providing the necessary tools and building member countries’ capacity to undertake debt sustainability analysis so as to enable them to put in place sound debt management policies and strategies.
Enterprise and agriculture
The Enterprise and Agriculture Section of SASD aims to promote viable and competitive micro, small and medium enterprises (MSMEs) that contribute to equitable economic growth and poverty reduction in member countries. Emphasis is on MSMEs in the agricultural, fisheries, light manufacturing and services sectors. Key areas of support include strategy and policy formation for sustainable development of MSMEs as well as capacity-building to enhance their competitive advantage (including the use of information technologies).
In view of the focus on food and food security on the world agenda, and the pressing and continuing need to end hunger and feed more people globally, more emphasis is being placed on support activities that contribute to improved agricultural productivity and food security.
Developing a vibrant MSME sector catering for the domestic market is an important achievement in itself. However, as companies grow, they will ultimately want to tap into the opportunities that international trade offers.
In such a scenario, the ability to compete internationally in areas of comparative advantage will be a key driver for growth and development. SASD assists countries in various ways – from designing National Export Strategies (NES) to improving the supply chain, logistics, trade facilitation and so on, as well as promoting exports in specific sectors, including services and tourism. The underlying rationale is to enable member countries to benefit from the opportunities and challenges provided by globalisation and international trade.
Much of this work involves interacting with both the public and private sectors. Addressing participants at the launch of the Uganda NES, President Yoweri Museveni commented on the importance of this dialogue: ‘I am aware that both the public and private sectors have worked together to formulate the strategy. Let this same partnership be maintained at work in implementing the strategy. Government will continue to spur and support such efforts.’
Many Commonwealth countries are endowed with natural resources such as minerals, oil and gas. More than 15 are endowed with significant petroleum and mineral reserves and are major producers of certain precious metals such as platinum, gold and chromium. Commonwealth member countries also contribute some 10 per cent of the world crude oil and 17 per cent of natural gas production.
For those countries, the Secretariat, through SASD, provides a programme to maximise the benefits countries can derive. Its work in this area assists member countries to establish legal, fiscal and commercial regimes to govern mining as well as oil and gas activities. The objective is to help countries secure foreign investment while maximising the economic and social benefits accruing from these activities.
In response to requests from member governments, it has recently started working in a number of new areas such as deep-sea mining, coal-bed methane, uranium mining, as well as power generation and distribution. It considers the relationship between energy, natural resources and the environment as a crucial one. The scope of its interventions continues to expand, and now comprises an integrated approach covering issues from revenue management, procurement, and health and safety, as well as environmental aspects such as climate change considerations and site closure and rehabilitation.
Law of the Sea and maritime boundaries
With only seven out of 53 Commonwealth countries being landlocked, the management and exploitation of maritime resources is an area of great importance to the vast majority of Commonwealth membership. Traditionally, the Secretariat has focused on the provision of advice and assistance concerning the delimitation of maritime boundaries, with particular emphasis on assisting member countries to engage in negotiations with neighbouring countries and reform national maritime boundary legislation.
Of late, however, assisting countries in their extended continental shelf submissions to the UN has been the major focus. By May 2009, the Secretariat had assisted 14 countries to submit their claims for extended shelf to the United Nations Commission on the Limits of the Continental Shelf. The UN Convention on the Law of the Sea is a multilateral treaty, which regulates all aspects of the use of ocean space including rights of navigation – both civil and naval – the exploitation of living and non-living marine resources, the protection of the marine environment, and the conduct of marine scientific research. For these countries this has meant the potential to exploit marine and seabed resources for the benefit of future generations.
The Secretariat is currently seeking to develop links with other aspects of oceans governance so as to provide more complete and integrated assistance on issues such as international fisheries and maritime surveillance and enforcement.
In advising member countries, the Secretariat relies on its multidisciplinary team of economists, lawyers, IT and business development specialists as well as project/programme managers.
Consultants are brought in whenever specialist skills are required but they always work as part of the SASD team. In this way, the Secretariat is able to work with the client country in coming up with recommendations, with emphasis placed on capacity-building, transfer of skills as well as practical and sustainable solutions, backed by appropriate legal and institutional frameworks. While promoting international best practices, assistance is always customised to each country’s particular context, needs and constraints.
The original vision of the founders of the Commonwealth Secretariat was that it should support economic development across the Commonwealth by overcoming the shortage of information in the system to support prosperity across the membership.
Both EAD and SASD contribute to the Secretariat’s vision by:
- providing a voice for member states, especially small states, with respect to global economic and social issues
- putting in place legal and institutional frameworks to ensure sustainability of changes being brought about
- building the capacity of member countries in key economic areas such as trade, debt and the productive sectors
- assisting member countries to negotiate
- facilitating intra-Commonwealth sharing of knowledge and experience.