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Keynote Speech by Mr Kamal Malhotra, United Nations Resident Coordinator at the Symposium on Advancing Economic, Financial and Social Inclusion in APEC

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Event: Symposium on Advancing Economic, Financial and Social Inclusion in APEC

Date: August 28, 2017

Venue: Sheraton Hotel, 88 Dong Khoi St., Ho Chi Minh City, Viet Nam

  • Ambassador Mr. Bui Thanh Son, Permanent Deputy Minister of Foreign Affairs and Vice-Chairman of the APEC 2017 National Committee;
  • International APEC Senior Officials;
  • Colleagues from ministries, and international and national partner organizations;
  • Distinguished guests;

I am honored today to address the distinguished participants of this high-level APEC Symposium, including the representatives of the Governments of Viet Nam, Governments from APEC countries, and national and international development partners.

First, I would like to recognize the Government of Viet Nam's commendable efforts in hosting and organizing the APEC meetings in 2017. These meetings, including today's High-Level Symposium, provide an important platform for stakeholders and partners from APEC countries to discuss a wide range of development challenges that they are facing, opportunities for promoting free trade and investment, and encouraging strengthened economic and technical cooperation to further sustainable economic growth and prosperity in the APEC region, which accounts for 39% of the world's population and 59% of the world's nominal GDP. I strongly believe that the results of these meetings and the strengthened cooperation that will contribute to successful outcomes during the APEC Economic Leaders Week that will take place from 5 to 11 November 2017 in Da Nang. The theme of today's Symposium - "Advancing Economic, Financial and Social Inclusion" - is indeed important for enhancing sustainable economic growth and prosperity in APEC countries and in all countries around the world.

Inclusion is at the core of the UN and global community's 2030 Agenda for Sustainable Development and is well reflected in all the Sustainable Development Goals and their associated targets. It is also mirrored in the key Agenda 2030 principles of "leaving no one behind", and in its vision of a "just, equitable, tolerant, open and socially inclusive world in which the needs of the most vulnerable are met" in - "a world in which every country enjoys sustained, inclusive and sustainable growth and decent work for all".

While many APEC countries have well-earned reputations for economic transformation and have accomplished substantial progress in poverty reduction and economic growth, the challenges ahead in sustaining this progress are significant and should not be under-estimated. While the number of people undernourished in the APEC region decreased from 304 million in 2005 to 185 million in 2015, governments not only need to support the poorest groups to escape poverty, but also need to ensure that the just-above-the-poverty-line population, sometimes referred to the "missing middle" or "vulnerable middle", does not fall back into poverty.

In the case of Viet Nam, where the country has achieved remarkable economic growth and poverty reduction over the last few decades, less than 10% of the population now consists of poor households, mostly located in ethnic minority or rural mountainous areas. In those areas, the government has implemented a series of targeted policies and programmes to help improve their income, and enable them to gain better access to basic social services and social protection. On the other hand, lower income groups, which remain vulnerable, have been growing consistently and constantly, and together with near-poor households now represent 75% of the Vietnamese population. These households' incomes are not sufficient to enable their families to be resilient to shocks, since they face difficulties in accessing decent jobs, health and education services and social protection, and are hence less able to become productive contributors to economic growth.

There is also evidence that economic growth is not necessarily translating into greater gender equality for all, and out of 600 million women who work in the Asia-Pacific labour force, only 30% of such working women are engaged in wage employment compared to almost 40% of working men. Recognizing the commitment of G20 leaders in 2014 to reduce the gender gap by 25% by 2025, we also need to acknowledge that women are in more vulnerable employment due to a larger share of them working as family workers with no independent access to income, having to nurture dependent children and the elderly, whose rapidly growing numbers add additional pressure on the economy. To achieve more sustainable development in the next stage of development, APEC emerging economies will need to create many more productive and decent jobs that require more advanced skills for all, especially for the "missing middle". This includes enhanced support to small-scale enterprises, and more investments in vocational training, higher education and critical thinking for all income groups to seize new productive employment opportunities and to enable creative, "out of the box" thinking and innovation.

Allow me to highlight that inclusive growth also requires that both the poor and non-poor are full participants in the economy equitably sharing in all its benefits. This will not happen without their equitable participation in creating sustainable growth as well as their participation in associated decisions to organize the progression of growth and shape growth itself. The 2030 Agenda's Sustainable Development Goal 16 was created to promote a just, peaceful and inclusive society that will require the inclusion in societal processes of all citizens. It clearly conveys that all people should have opportunities to act as active members in their society, and participate in shaping the course of development and improving social cohesion. The importance of this goal cannot be over-emphasized.

Allow me now to briefly focus on financial inclusion. It is important to note that while economic inclusion emphasizes everyone's right to participate in the growth process and benefit from its progress, financial inclusion is an important instrument and means to realize this vision.

While the rate of adults who own bank accounts is at an 80% average in some APEC countries such as Malaysia, China and Thailand, the rate remains in the lower 30% for countries such as Mexico, Indonesia, the Philippines and Viet Nam. In these countries, the rate of households able to deposit savings in the formal banking systems remains low, as do the rates of borrowing from a formal bank. Despite the boom in IT, internet and mobile services, and increasing use of electronic devices in these countries, mobile payment, banking and electronic financial transactions remain modest. In 2015, less than 60% of people and households in developing APEC economies had access to a computer or the internet.

Urgent action is needed to address issues of financial exclusion, which raise costs and restrict the supply of capital, weakens employment opportunities, limit small- and medium-sized enterprises that dominate the domestic private sector, and reduce investments in education. Legal and regulatory reforms are necessary to enable improved access and supply of financial services, and incentives are required for formal banking systems to do business with "unbanked groups" as well as with small and medium-sized enterprises. Countries will need to be ready to open the market to different types of innovative financial service providers to reach unbanked segments. In this regard, I am glad to announce that during the recent visit of the UN Secretary-General's Special Advocate for Inclusive Finance for Development, Her Majesty Queen Maxima of the Netherlands to Viet Nam, the Government informed key stakeholders and development partners that a Financial Inclusion Strategy is being prepared, which will identify a series of concrete actions in the aforementioned areas.

Ladies and Gentlemen,

The challenge of reducing inequalities, both within and across countries, needs to be tackled by joint efforts of all APEC partners, both developed and developing. As Nobel Laureate in Economics Dr. Joseph Stiglitz puts it: "Inequality causes instability, increasing the frequency of big swings in the economy. Extremes of inequality mean that larger fractions of the population are in poverty, with a lower ability to cope with shocks when they occur. Extremes of economic inequality inevitably lead to political inequality; with the result that governments are less likely to provide the systems of social protection and services that can protect those at the bottom from the consequences of large shocks." We need to think of inequality not just as a moral issue, but also as a fundamental economic concern, integral to thinking about human development.

I am pleased to have been part of the official launch of the Viet Nam National Action Plan to implement the 2030 Agenda in July 2017, which marks an important milestone for Viet Nam's active participation in the global 2030 Agenda journey and towards the fulfilment of its SDG commitment. It recognizes achieving greater inclusion and tackling inequalities as central to Viet Nam's development, and identifies actions and efforts to realize the VSDGs, including target 10.2 to "[By 2030], empower and promote the political, economic and social inclusion of all citizens, irrespective of age, sex, disability, ethnic origin, nationality, religion, economic status or other conditions". Furthermore, the Government of Viet Nam has recently announced that they will present their First Voluntary National SDG Review at the next UN High-Level Political Forum in New York in July 2018; a critical initiative that should be preceded by a National-level forum. I strongly believe that with its strong political commitment, determination and rich experiences in achieving the MDGs, and embarking on a new inclusive growth model, Viet Nam can achieve the SDGs and make strong progress in greater economic, financial and social inclusion.

Ladies and Gentlemen,

Let me conclude by saying that the UN in Viet Nam, and in other APEC countries, stands ready to provide the technical, operational and programmatic support needed by governments to identify and implement feasible and innovative solutions to the challenges of improving economic, financial and social inclusion. I hope that through the fruitful discussions at this Symposium you will be able to identify sound solutions and concrete actions, including new forms of economic and technical cooperation, for advancing economic, financial and social inclusion nationally, regionally and globally to fully achieve the Sustainable Development Goals and the 2030 Agenda.

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