United Nations South South Round Table, New York
It is a privilege to be here and I would especially like to thank His Excellency President Xi Jinping of China and His Excellency the Secretary General of the United Nations for inviting the New Development Bank to this round table.
President Xi has today outlined in great detail, a set of action items and other leaders have articulated their thoughts. We take note of these and stand committed in doing our part to help achieve these goals.
The NDB believes that we are amongst the first development lending institutions to be set up at the initiative of the South. We would also like to believe that the setting up of the NDB, in a way, is a coming of age of the countries of the south.
Historically, the developed world has extended a hand of assistance to the developing world. While this assistance has enabled a large number of countries to move up the development cycle, help towards eradicating poverty and in fuelling the aspirations of millions, yet there is a lot more to be done. The New Development Bank starts with an aspiration to further this momentum by listening to the voice of its member states. We will learn from the challenges faced by the other MDBs. And we would then build an institution that strives to reach out to the needs of members, incorporating all we have heard and learnt. In doing so, we humbly aim at building the next practice in the development agenda framework: being responsive, doing things at speed and scale.
The rise of the emerging nations is the defining story of the 21st century. And even today, it is no surprise that emerging nations are the drivers of global growth. This progress is a testament to the nations of the south. A testament of the rapid shift in the global economy. And it is likely that this is where the economic activity will continue to be centered in the coming decades. Yet much needs to be done.
In working on the development agenda for the future, several strategic issues arise. What best drives growth, how do we promise timely assistance, how do we balance risk and how do we deepen and broaden our resource base. Should MDBs operate on a low gearing or leverage ratio, so that we aim at and preserve our AAA rating or say do we double or triple our leverage and by doing that substantially increase our resource base to meet the developmental aspirations of the south. Can we raise local currency resources to lend to the south, thus avoiding the exchange risk which effectively pushes borrowing costs to mid to high teens. Separately, will the current MDB model change and how does it harness and leverage the enormous tectonic shift that is taking place in technology. These shifts are dramatically changing the lives of individuals, small businesses and indeed governments and we need to understand and incorporate them in our own development models. These we hope will provide a new tomorrow for the countries of the south.
We strongly believe that the development agenda of the coming years will be greatly influenced by the current economic shifts where the south is gaining prominence, along with the shifts in technology outlined above. These will provide a new tomorrow for the developing countries and more importantly to the countries of the south.
Every journey starts with a single step and we at the NDB have started taking our first step to meet the aspirations of the countries of the south.