Address by Minister Paradis: Annual Meetings of the World Bank Group and the International Monetary Fund
(Toronto Centre event)
October 11, 2013
Thank you, Tiff, for the introduction, and for the invitation.
It's a pleasure to be here to discuss the role of the financial sector in development, particularly in the areas of financial sector regulation and supervision where Canada has significant experience to share.
It is interesting to note that many developing economies have fared the global financial crisis better than their developed counterparts.
Some are growing at 5 or 6 percent annually.
In fact, global investment in the developing world is forecast to triple by 2030.
Financial institutions will be essential players in driving and sustaining this rebound.
They do this by promoting financial stability, and by serving the needs of the people, the households and the businesses that drive economic growth.
I cannot count how many times I said this as Minister of Industry.
It is people who create jobs, drive growth, and strengthen economies—not governments.
That is why it is a major concern that right now, 59 percent of adults in developing countries don't have a bank account.
This is not just because of poverty.
It is because of the costs, the travel distance, and the paperwork.
These people represent a huge amount of untapped capital; capital that could be used to drive economic growth and help increase prosperity.
At the same time, we know that many developing countries lack the basic financial structures of a modern economy.
With increased globalization of the financial system, we must ensure they have sound regulatory environments.
This is essential to securing much-needed domestic and foreign direct investment, not to mention to protect themselves from financial crises.
Financial institutions also need the right regulations and policies to function effectively.
This includes meeting the needs of the poor—or the "unbanked."
This isn't just an economic argument, it's a development one.
We know that private-sector-led economic growth is key to breaking the cycle of poverty and dependence.
It is exactly this kind of financial inclusiveness that is crucial to future growth.
That is why sustainable economic growth as a tool to alleviating poverty is one of our main development priorities.
Getting the investment environment right in developing countries is the foundation on which all other growth is built.
Canada works directly with developing countries to build the stable and predictable economic environments needed to:
- attract investment; and
- stimulate growth.
This isn't just about opening countries up to investment and trade.
It's about empowering countries to act as trading partners with stable markets.
It's about ensuring they have adequate financial infrastructure that is capable of receiving investment.
It's about enabling governments to effectively regulate and oversee their financial sectors.
And it's about helping them build a thriving economy so they can provide the support and services their citizens need.
We can all appreciate the enormous amount of expertise and capacity financial regulation and supervision requires.
I believe that Canada is uniquely positioned to help developing countries meet this challenge.
Although Canada's economy is by no means the biggest or fastest growing in the world, we weathered the global financial crisis better than most of our trading partners.
Today, we find ourselves further ahead than any other G-7 country when it comes to creating jobs, economic growth, and our debt-to-GDP ratio.
We stand among just a handful of nations with a triple-A credit rating.
Government of Canada securities are among the most sought-after investments in the world.
This means that investors in Canada and abroad are confident in our government's ability to manage the economy now and into the future.
The Toronto Centre set itself a mission:
- to build the capacity of the financial sector in low-income countries and emerging markets; and
- to bring down the cost of banking while improving the prospects of private sector growth.
These are key steps to promoting global financial stability.
Our government is proud to be one of the Centre's founding members, and we are encouraged by its results.
Since its inception in 1998, it has trained more than 5,500 managers from financial regulatory and supervisory agencies in more than 170 countries.
That is why I am pleased to announce that our government will provide the Toronto Centre with additional funding to:
- strengthen financial sector supervision and regulation;
- deepen its country-level engagement; and
- continue to provide essential expertise to developing-country markets.
Ladies and gentlemen, it has been five years since the financial crises, and the global economy is still recovering.
We need to keep up our efforts to find innovative solutions to financial challenges in both developed and developing countries.
Ending extreme poverty and promoting global prosperity are two sides of the same coin.
And by supporting developing countries in financial oversight and financial inclusion, we can achieve both.
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