Implementing

Femm

directives

By Bernadette Hussein

Economic ministers from Forum island countries met in Cairns, Australia, July 11 to discuss the best ways in which to implement the direc tives given to the ministers by Forum leaders at the South Pacific Forum in Madang, Papua New Guinea, in 1995 and the Marshall Islands last year.

It was agreed at the Forum Economic Ministers Meeting that private-sector

development was central to ensuring sus tained economic growth, and that govern ments should provide a policy environment to encourage this. And an action plan was agreed on to this end. Plan number one was to continue implementing economic reform strategies in accordance with the 1996 Forum directives.

The ministers agreed to develop nation al economic reform strategies encompass ing all components of their reform process and identify measures for ensuring that essential service delivery was maintained and potentially adverse social impacts were minimised. They also agreed that these strategies be developed in consulta tion with community groups and the pri vate sector. They agreed to invite the pri vate sector to identify issues affecting busi ness competitiveness that could be addressed by government policy reform, advise on the relative importance of these to business productivity and recommend

steps which could be taken to improve the economic environment within which they operate.

Public accountability was the second plan which the leaders agreed upon.

They decided to promote the adoption, at government level, of a number of princi ples of best practice for public accountabil ity. Some of these principles were: • budgetary processes, including multi year frameworks, to ensure parliament/congress is sufficiently informed to understand the longer-term implications of appropriation decisions; • government, statutory corporation and state-owned enterprise accounts be promptly and fully audited and made avail able to the public; • all government and public-sector con tracts be openly advertised, competitively awarded, administered and publicly report ed; • contravention of financial regulations

be promptly disciplined; • public accounts, expenditure commit tees of parliament/congress be empowered to require disclosure.

The ministers agreed to convey to Forum leaders their grave concern over the implications of economic development of undesirable financial activities in the region and urge the adoption of consistent legislation and administrative procedures across the region. Investment policies was another area where work had to be done.

The ministers decided to pursue open, liberal and transparent investment policies consistent with APEC non-binding invest ment principles. Tariff policies was plan number four. The ministers pledged to work towards a common goal of free and open trade and investment with each mem ber developing its own timetable and mechanism for achieving this.

They agreed to rationalise and progres sively reduce their tariffs with the aim of

removing the adverse effects of tariffs on their economies while, at the same time, recognising the special circumstances of some smaller Forum island countries. They decided to follow a set of guidelines approved at the meeting for tariff improve ments. These were that: • protective tariffs not be used (if there is a genuine need for government support, other forms of targeted assistance are more effective); • a standard general rate apply to all goods except in circumstances when pub licly known and clearly defined criteria are met (these could be when a good imposes social or environmental costs or when a good is clearly a business input); • a duty drawback system be available to all exporters; • tariffs be levied on imports at Cost Insurance Freights (GIF) values and not Free on Board (FOB) or Current Domestic Value (CDV) values. The ministers also

deliberated on multilateral trade issues.

They acknowledged that the global trading environment was rapidly changing and that margins of preference under agreements such as LOME and SPARTE CA were diminishing. They recognised that countries in the region needed to adapt their policies to meet the challenges of this changing environment. In doing so, they would, to the extent practicable, implement domestic measures consistent with WTO and APEC principles and obligations and cooperate in responding to and taking advantage of multilateral trade develop ments. They also agreed to cooperate in promoting regional interests in multilateral trade fora. They will work with other coun tries in striving to achieve the best out comes from the next round of WTO trade liberalisation negotiations and the review of the Lome Convention, acknowledging the role of the Forum Secretariat in this regard. ■