The Minister for Foreign Affairs and External Trade, Mr Vunibobo, Mr Levi, other Ministerial colleagues, Ambassadors and Excellencies, Ladies and Gentlemen.
I am very happy to be here with you tonight and to respond to your kind invitation to speak to the Forum Economic Ministers at the commencement of the 1998 FEMM, marking the passing of the Chairmanship from Australia to Fiji.
I must first of all convey to you the apologies of the Australian Treasurer, Peter Costello, who is unable to attend FEMM this year due to pressing commitments in Canberra. He was very much looking forward to making a contribution to the work of FEMM, following the major achievements of the inaugural meeting in Cairns last July. He wishes the 1998 FEMM every success.
We believe that in establishing the FEMM, we have established a process which will prove to be of fundamental importance to the region's economic future. We therefore need to work hard to get the most out of it as we look closely at the opportunities and challenges that will face us in the period ahead. At last year's meeting we endorsed the FEMM Action Plan, which emphasised the importance of private sector development as central to generating sustained economic growth, and that governments should provide a policy environment to encourage this. The Action Plan provides a framework for pushing ahead with fiscal, structural and governance reforms, achieving sustainable improvement in economic performance and achieving greater self-reliance.
I think that we must all find it enormously encouraging to come here this year and to see the progress many countries have made in implementing the Action Plan. May I congratulate those that have embraced economic reform and encourage us all to press ahead with a firm commitment to the ideals and practical policies embodied in the Action Plan. We all know that our economies have to change and the task is to find politically acceptable ways of doing so. The Action Plan provides important signposts as we move down this road.
We can and should help each other in these endeavours, but fundamentally the task is up to each of us individually in the particular circumstances of our own economies, bearing in mind Forum leaders concerns about the special circumstances of smaller Island states.
Since we met last July, we have witnessed the dramatic economic events unfolding in our wider neighbourhood. All of us are, or will be, affected by the crisis to some degree. A few Pacific Island states have already experienced substantial contractions in important export markets. The extent of the impact on other Forum members is, at this stage, uncertain. An external shock of this magnitude poses particular problems for those of us who continue to wrestle with the many development challenges facing small Island states.
Care needs to be exercised in drawing strong parallels between the recent economic turmoil in Asia and the challenges facing the Pacific Islands. Conditions in this region differ in a number of ways. That said, I think it is fair to say that the events in Asia serve to illustrate the wisdom of our commitment last year in the FEMM Action Plan to core structural, fiscal and governance reforms and reinforce the need to press ahead purposefully with these reforms.
I would particularly commend those parts of the Action Plan aimed at strengthening the transparency of fiscal policies and governmental operations generally. The Principles of Accountability, which were endorsed last year and which I note from the agenda papers are to be considered for further development this year, set standards of good practice of a type that financial markets, donor countries and institutions will increasingly use when examining our countries performance.
The agenda also offers the opportunity for us to consider approaches to develop trade and investment liberalisation. An important message here is that the benefits of tariff reform, supported by tax and compliance reform initiatives which are underway in the region, can be achieved without compromising national interests, including collecting revenue. I would note that, despite the Asian financial crisis and fears of an economic slow down in the Asia-Pacific, we will clearly benefit for aligning our trade and investment policies with the standards of the multilateral and APEC trade agendas.
Our meeting also offers the opportunity to agree on strategies for taking into account and ameliorating the social impacts of economic reform. In doing that we all recognise, of course, the basic requirement to safeguard traditional cultures and values and the importance of those values for social cohesion.
We are also going to discuss the possibility of establishing a free trade arrangement in the South Pacific. This is a complex issue and one that will require very careful consideration by all of us.
As I mentioned earlier, Australia applauds the significant progress made by a number of Forum Island Countries on comprehensive and politically difficult reform programs that have been implemented either under the auspices of international financial institutions or domestically. Reform efforts are more impressive when set against the backdrop of difficulties that the region has faced in recent years, including the effects of severe drought. As every government knows, the task of reform is never easy but the rewards can be great. Australia is pleased that it has been able to offer substantial assistance in developing and implementing many of these economic reforms.
I would emphasise that Australia remains deeply committed to continuing to work co-operatively with the Forum Island Countries in putting in place the reforms needed to ensure stronger and more sustainable economic growth in the future. I am sure that the 1998 FEMM will be another important step on this path to prosperity.
We all appreciated the fine opening ceremony and the welcome we have all received from Fiji - its leaders and its people.