Sixty-third General Assembly

Plenary

95th Meeting (AM)

GENERAL ASSEMBLY ENDORSES WORLD FINANCIAL CRISIS SUMMIT OUTCOME, SETTING IN MOTION
SUSTAINED FOLLOW-UP; WILL ASSESS MILLENNIUM SUMMIT’S PROGRESS AT 2010 MEETING

The General Assembly today endorsed the outcome of the Conference on the World Financial and Economic Crisis and Its Impact on Development, which, among other things, outlined the need for sustained follow-up within the United Nations system to the issues raised during that historic meeting held from 24 to 30 June. 

In adopting the draft resolution “Outcome of the Conference of the World Financial and Economic Crisis and Its Impact on Development”, as orally revised (document A/63/L.75), the Assembly answered the Conference’s invitation to createan ad hoc open-ended working group that would report to it before the end of its upcoming sixty-fourth session.  It also asked the Economic and Social Council (ECOSOC) to coordinate system-wide follow-up, including through the possible establishment of an ad hoc panel of experts on the crisis and its impact on development.

A representative of the Secretariat informed Member States that there was currently insufficient information to evaluate the programme budget implications of paragraphs 54 and 56 (e), which respectively invite the Assembly to create the working group and request ECOSOC to make recommendations regarding the creation of the expert panel.  The Secretary-General would submit statements of any programme budget implications to the Assembly and ECOSOC as soon as specific decisions were taken on the creation of those two bodies and details on their format were available.

Speaking in explanation of position, Cuba’s representative said that while her delegation had joined the consensus, it believed that the outcome fell short of needed actions and contained precedents that could be problematic.  As a whole, the agreed text did not deal in depth with the reform of the current “anti-democratic” financial system, which needed to be rethought and restructured.  Of special concern was the reference to “human security”, which not only did not have an intergovernmental definition, but was sometimes interpreted as grounds for interference in a State’s affairs.  Cuba also did not recognize the reference to “fundamental principles of effectiveness of trade”, which it believed was intended to distract from the need to aid developing countries.  Moreover, the document did not sufficiently recognize problems of the countries of the South.

Venezuela’s representative confirmed the observations and reservations which his delegation had stated when the outcome was adopted during the Conference.  Venezuela supported Cuba’s comments and stressed its view on human security which had been expressed in previous meetings.

(For an expanded summary of the Conference outcome and explanations of position, see Press Release DEV/2754 of 26 June 2009).

Earlier today, the Assembly decided to convene a high-level plenary meeting in 2010 at the commencement of its sixty-fifth session, as a follow-up to the Millennium Summit.  By adopting the draft resolution on the “Follow-up to the outcome of the Millennium Summit” by consensus, as orally amended in the French version by consensus, the Assembly encouraged all Member States to be represented at the level of Heads of State and Government at that meeting, the dates of which are still to be decided (document A/63/L.76).

Further to the text, the Assembly decided to hold consultations on the scope, modalities, format and organization of the high-level plenary with a view to concluding talks before the end of 2009.  It thus requested the Secretary-General to submit a report to it at the beginning of its sixty-fourth session.

A representative of the Secretariat said there were no programme budget implications for the high-level plenary in 2010 provided the meeting was held within the Assembly’s overall workload and entitlements.  Any potential financial requirements would be reported to the Assembly by the Secretary-General at the beginning of its sixty-fourth session if details regarding the meeting’s scope were available.

Conference on World Financial

and Economic Crisis

8th & 9th Meetings (AM & PM)

DISMANTLING OF PROTECTIONIST TRADE MEASURES, FULFILMENT OF AID PLEDGES AMONG
ISSUES, AS DEBATE CONTINUES AT UN CONFERENCE ON WORLD FINANCIAL CRISIS

Hears from More Than 25 Speakers, Following Friday’s Adoption of Outcome Document

Struggling to recover from steep declines in export earnings, tax revenues and overall economic growth, delegates from developing and middle-income countries alike today pressed rich nations to dismantle protectionist trade measures and fulfil pledges for official development assistance to avert a humanitarian catastrophe, as the plenary debate of the Conference on the World Financial and Economic Crisis and Its Impact on Development continued at United Nations Headquarters.

The Conference, which began on 24 June, has brought together world leaders to assess the worst global economic downturn since the Great Depression and identify emergency and long-term responses to mitigate its impacts.  On 26 June, delegates adopted a sweeping outcome document that contained recommendations to fight the recession and establish safer and fairer financial practices.  Among other measures, they called for more resources for social protection, food security and human development, and follow-through on commitments for increased development assistance.

Throughout today’s debate, representatives of Governments and observer missions stressed that many open, export-dependent economies were still suffering the impacts of sustained high food and fuel prices, and battling the severe impacts of climate change that included drought, flooding and soil erosion.

The representative of Belarus, one of 27 speakers today, told delegates that new protectionist measures brought particular harm to small, export-oriented countries.  They had been used not only to protect domestic markets but to pressure other nations -– and that was unacceptable.  He urged the United Nations and the World Trade Organization to ensure the early cancellation of protectionism measures, and United Nations agencies particularly to help affected countries deal with consequent losses.

The situation was especially severe in Tajikistan, whose delegate said that economic growth for the first four months of 2009 had reached only 2.9 per cent, versus an average of 8 per cent during the last eight years.  Exports had declined by 41 per cent in the first quarter and imports by 11 per cent.  While he appreciated policy responses taken by countries worldwide, he urged developed countries to ensure that their actions did not harm -- but helped -- countries in neighbouring and interconnected regions.  He asked the United Nations to include in the agenda of future reforms the establishment of an initiative or fund to support landlocked countries.

Congo’s representative said that, while his Government had seen progress over the last ten years on various fronts, the global financial meltdown had forced it to review its growth targets.  The forestry sector had contracted by 50 per cent, while Congo’s oil dependence, debt burden and high production costs were all major challenges that the Government sought to address.

Shedding light on the macroeconomic situation, the delegate of Cape Verde said forecasts expected a 1.7 per cent drop in global gross national product and a 2.1 per cent slowdown in income.  Behind such figures lay a human tragedy that involved a loss of hope.  The situation threatened countries’ ability to meet the Millennium Development Goals, particularly for women and children, and could worsen social tensions.  It would be illusory to expect any country to face such challenges alone and Cape Verde -– a young, dynamic country -- risked losing its middle income economy status.

“We are at a critical juncture that requires rapid, decisive and coordinated action,” Afghanistan’s delegate said.  The causes of the crisis had to be addressed and all had to work together to prevent a tenuous situation from becoming a social and human disaster.  As a post-conflict, least developed and landlocked country, Afghanistan would be pressed to implement its national development strategy and achieve its Millennium Development Goals without intensified global support.

He saw the potential of North-South collaboration, as well as that between countries in the South, saying that Afghanistan could testify to the value of various types of partnerships.  Cooperation could best be accomplished by improving international and regional institutions, supporting global and regional cooperation and increasing the effectiveness of such efforts in recipient countries.

Agreeing, the Secretary-General of the Inter-Parliamentary Union said the health of the world economy should not be measured simply in terms of stock market recovery, but in terms of its ability to provide jobs that valued the dignity of work.  The debate over good governance of international financial institutions should involve making them more responsive to people’s real needs, and opening them to greater parliamentary scrutiny and support.

He insisted that the crisis was one that had been foretold.  “We cannot claim to have been ignorant”, he said.  At its most basic level, it concerned morals and ethics.  At a very minimum, the response must be one in which “business as usual” was abandoned, and a better equilibrium between the voice of society, the role of the State and the dynamics of the market was found.

Also speaking in today’s debate were Bolivia, Swaziland, Tunisia, Ghana, Eritrea, Panama, Ethiopia, Moldova, Iceland, Albania, Democratic People’s Republic of Korea, Croatia, Montenegro, Jordan, Mauritania, Nepal, Malawi, and Trinidad and Tobago.

Representatives of the Permanent Observer Mission of Palestine and the Holy See also delivered remarks, as did a representative of the Common Fund for Commodities.

The Conference will conclude its debate tomorrow, Tuesday, 30 June.  After, the General Assembly will take up the reports of the Fifth Committee (Administrative and Budgetary), and take action on a draft resolution on the situation in Honduras.

Background

The General Assembly today met to continue the plenary debate of its Conference on the World Financial and Economic Crisis and Its Impact on Development, which aims to identify emergency and long-term responses to mitigate the impact of the crisis, especially on vulnerable populations, and initiate dialogue on the transformation of the international financial architecture.  (For days one through three of the Conference, see Press Releases DEV/2747, DEV/2748, DEV/2749, DEV/2750, DEV/2751, DEV/2752, DEV/2753 and DEV/2754.)

Statements

RAYMOND SERGE BALE ( Congo) said the crisis provided an opportunity to review the entire global financial system and create a new vision of life based on solidarity.  Recalling that the Group of 20 recently met in London to bring lasting solutions to the present situation, he said today’s Conference must establish a new starting point for nations, particularly developing nations.  In that context, he welcomed measures taken in intergovernmental discussions on the outcome document.  All parties, including people themselves, must be mobilized on the basis of coordinated solidarity, and he expressed hope that the trend would continue.  “Reshaping the global financial system is everybody’s business,” he said.

He said Africa was experiencing the impacts of a crisis it did not create, just at a time when it was beginning to see progress on various issues.  Export revenue was a major lever for nascent African economies.  They were vulnerable because of the nature of trade with developed countries.  In Congo, the forestry sector had contracted by 50 per cent.  Its dependence on oil, its debt burden and high production costs were major challenges that the Government sought to address.  Progress had been seen in the last ten years, but the crisis had forced Congo to review its growth targets.  Also, protection of the Congo Basin was vital to sustainable development of the country and adequate funding was needed to preserve it.  The United Nations must play a key role in coordinating international development.

PABLO SOLÓN-ROMERO ( Bolivia), first condemning the coup d’état in Honduras, said today’s Conference was a triumph of democratic participation.  Indeed, the global financial crisis was structural and systemic, and it called for far-reaching measures.  A few regulatory measures did not constitute a solution.  For capitalism, there was no Mother Earth -- just raw materials.  It generated luxury and waste for a few, while many died of hunger.  Life itself had become a good and natural disaster a source of business.  There was a choice at hand.  Poor countries could not continue to pay for rich countries’ serious errors -- money was flowing out of them towards the rich nations.  “This is unacceptable”, he said.  Developed countries must pay the bill for promoting today’s disaster.

To compensate poor countries, he said developed nations must contribute an additional 1 per cent of gross domestic product to a fund for developing countries.  They also needed to open multilateral trade immediately.  The North must stop promoting Free Trade Agreements that only led to social upheaval.  They must open their markets and immediately cancel the debt of poor nations.  Developing countries must stop financing the North and use the reserves to leverage the crisis to attain sustainable development.  Finally, it was essential to guarantee poor nations the space needed for commercial, trade and financial measures to attain their rights to food, water and all basic services.  “We cannot confuse the protectionism of sharks with the protectionism of sardines,” he said.  Also, there must be a full restructuring of the World Bank and International Monetary Fund.  They could not reform themselves.  The United Nations must play a determining role in their reform.  In closing, he said the free will of the market could no longer be allowed to trigger instability.  The world needed new institutions, based on solidarity, social justice and the rights of Mother Earth.

ABDUJABBOR SHIRINOV ( Tajikistan) said the country’s economy faced serious difficulties, as economic growth for the first four months of the year was 2.9 per cent, compared with an average of 8 per cent during the last eight years.  In the first quarter of 2009, exports had declined by 41 per cent and imports by 11 per cent, while remittances were down by more than 30 per cent. The country had also experienced additional difficulties because of the global energy and food crises.

It would be very difficult for Tajikistan to deal with the current problems without assistance from the international community, the United Nations and other global and regional financial organizations and institutions.  Tajikistan welcomed the recommendations of the Commission of Experts and, while it appreciated the policy responses taken by countries worldwide, he urged developed countries to ensure that their actions did not harm, but helped countries in the neighbouring and interconnected regions.  For example, developed countries subsidized cotton producers, which harmed cotton producers from poor countries like his own.  He called on developed countries to stop that practice.

He asked the United Nations to include in the agenda of future reforms the establishment of an initiative or fund to support landlocked countries and to see a rapid replenishment of the initiative or fund from the international donor community, he said.  He supported the outcome document.

JOEL M. NHLEKO ( Swaziland) said small, open and vulnerable developing countries like his own, while not directly affected by the financial crisis due to their weak integration into world capital markets, had been impacted more directly by the contraction in advanced nations.  Such secondary effects were as yet being unravelled, implying that the poorest countries had not seen the worst of the turmoil.  They were now contending with falling exports, commodity prices, balance of payments shortfalls, sliding access to trade and diminished foreign direct investment.  Most developing countries lacked the individual financial capacity to either affect the system or provide the necessary stimulus to jump start their economies.

While he appreciated recent efforts of the Group of 20, it was only fitting that the United Nations hold today’s Conference.  The decisions taken would consolidate what was being done by other actors in other forums.  In that pursuit, developed countries should steer the “global ship out of these perilous waters”, taking measures to boost global demand, stabilize financial markets and unlock credit markets.  They should also fulfil official development commitments.  Developing countries could not sit idly by -– they had to deepen economic and structural reforms, boost private savings and maintain political and macroeconomic stability.  For its part, Swaziland’s poverty reduction strategy and action plan rested on two pillars:  investing in infrastructure and enhancing health delivery and skills development.  In closing, he said developed and developing countries alike must do whatever possible to boost economies and arrest the slippage into abject poverty for the most vulnerable.

JALEL SNOUSSI ( Tunisia) said the global financial crisis showed the failure of a certain model, and it was an unprecedented crisis that required an unprecedented response.  It had taken place at a decisive stage in the process of the Millennium Development Goals (MDGs), which had been left on the back burner since the financial crisis had begun. The international architecture needed to be revised. It needed to be reviewed to make it more open, transparent and inclusive and to make the international economy became more stable.

In such an environment, it was crucial for States to coordinate their efforts in economic and political affairs, he said.  The United Nations had the necessary legitimacy and should be able to play a governing role, and a more significant role, in the international financial world. The Economic and Social Council could serve as a central mechanism.  It was necessary to extend control over the financial bodies that created risk.  Further, more rigorous standards must be created for risk assessment and the use of complex financial products. Tunisia also supported the creation of a follow-up mechanism for the Conference

LESLIE KOJO CHRISTIAN ( Ghana) said the crisis presented significant challenges for developing countries, especially those in Africa.  In fact, the crisis represented a serious setback for the African continent at a time when it was gradually, but steadily making progress in economic performance and management.  One worrying, but likely consequence of the crisis for all developing countries was the reduction of internal and external finance, which posed difficulties for funding health, education, infrastructure and nutrition programmes.  The key challenge facing Africa, therefore, was determining how to manage the current crisis, while ensuring development progress was not reversed.

He noted that among the policy responses to the crisis, African countries had taken steps to mitigate its impact, including through interest rate reductions, recapitalization of financial institutions, increasing liquidity to banks and firms, fiscal stimulus packages, trade policy changes and regulatory reforms.  Some had set up task forces and committees to monitor the crisis.  In Ghana restrictions had been imposed on travel budgets, official procurement and the creation of new posts.  Nevertheless, financial constraints continued to limit responses and the international community needed to provide appropriate assistance to prevent a humanitarian catastrophe.  Among other things, rich countries should make more efforts to meet existing aid and debt reduction commitments.  Disbursements should be accelerated and access to existing finance facilities improved.  The International Monetary Fund should put in place a new facility with relaxed conditions to support African economies during the crisis, and early capital to the African Development Bank should be increased.  The International Monetary Fund’s (IMF) gold reserves should be sold to release additional resources.

ARAYA DESTA ( Eritrea) said his delegation agreed with the statement made by Bangladesh on behalf of the least developed countries.  The cause of the financial crisis was rooted in human greed and had gone on without mercy to cause colossal damage around the world.  The impact of the crisis compounded the recent crises in food and fuels and had severe ramifications for the poorest and most vulnerable populations.  The crisis had rapidly spread to developing countries and emerging market economies, which had been impacted by lower export revenues, less tourism, increased unemployment, decreased capital flows and fiscal budgetary constraints.

It should be emphasized that the current crisis had triggered a slowdown in global economic growth, which showed itself in a demand–driven fall in international trade, falling commodity prices, declining remittances, shrinking foreign direct investment, and the potential decline of official development assistance.  Those conditions were added onto the ongoing global food crisis, volatile energy prices and climate change challenges.  The Conference should lead to immediate collective actions, which should include a strong follow-up mechanism and the reform of the international financial institutions, especially governance of the International Monetary Fund.

YAVEL FRANCIS LANUZA ( Panama) said the global economic and financial imbalances had directly affected developing countries.  The call of today’s Conference reflected the urgency of in-depth discussion on the situation and, in that context, she recognized the legitimacy conferred on the United Nations.  Indeed, the Conference was an important step on the right path and it should produce recommendations for countries and regions without creating a “single recipe”.  She also expressed hope that it would strengthen discussions on the causes of the crisis.  The time had come to stress the importance of strengthened financial systems.

She said diversified financial services played an important role in Panama, and the country had established solid regulatory institutions.  The financial and trade interrelationship was increasingly complex, and made it necessary to use effective supervision mechanisms.  Developing economies had been impacted by multiple and interlinked commercial transactions with trade partners, a drop in basic goods prices and contraction of financial credit.  More than ever, all forms of cooperation were positive, not only in the North-South axis, but between developing economies.  Without prejudice for the need to adopt an adjustment mechanism, she said nations must avoid implementing measures that would reverse progress in commercial and trade relations.  The growth and well-being of citizens were the ultimate goals of country actions.  In that context, she trusted that the United Nations’ role would continue to develop in a prominent way and complement that of other international organizations.  In closing, she rejected the destabilization that had taken place yesterday in Honduras.

RETA ALEMU NEGA ( Ethiopia) said the global economic crisis had become a human development crisis and was pushing millions of people back into poverty and placing the survival of the poor and vulnerable groups at risk.  The prospects of reaching the Millennium Development Goals had also been compromised and their achievement looked more distant than ever.  The African continent was becoming the victim of the consequences of the crisis, which was testing the continent’s recent progress in various social and economic areas.  The collective efforts of the international community to address those challenges had been stalled.

Ethiopia believed it was time for the international community to take concrete measures to address the global economic crisis, including committing to the provision of additional resources to poor countries.  The delegation fully supported the creation of the Global Economic Coordinating Council, with adequate representation of developing countries’ practitioners and policy-makers.  The United Nations should continue to play an important role in addressing this and possible future crises, and it was urgent to strengthen the coordination and coherence of its activities among its agencies and other international Organizations.

ANTONIO PEDRO MONTEIRO LIMA ( Cape Verde) said his country was suffering the effects of a crisis for which it was not responsible.  Without sustained global efforts, it could find progress made in the last thirty years called into question.  That was unacceptable and he urged the international community to understand the causes of the crisis, so as to avoid a repeat.  He said market deregulation and liberalism were among the causes of the turmoil, which had led many countries to break with past practices.  Countries must act to avoid an unprecedented humanitarian crisis.  Without necessary measures -- notably on the substance of the problem -- more than 53 million people in 2009 could join the hundreds of millions who already lived below the poverty level.  Forecasts showed an expected 1.7 per cent drop in global gross national product and a 2.1 per cent slowdown in income.  Behind such figures lay a human tragedy that involved a loss of hope.

He said that situation would impact countries’ ability to meet the Millennium Development Goals, particularly for women and children, whose food needs were particularly threatened.  It also could worsen social tensions, and leaders must act in a determined way to diffuse extremism.  In addition, there should be more transparency in the United Nations and global financial institutions.  Indeed, protectionism would condemn millions more into poverty.   Cape Verde, an archipelago nation, was particularly vulnerable to soil erosion and desertification.  It produced only 20 per cent of its food needs and could cultivate only 10 per cent of its land.  Despite that, the nation was based on democratic governance, an economic system free from corruption and a good social system.  Its dynamism was due to pragmatism and strict financial management.  However, the crisis had reduced foreign direct investment and a drop in real estate, tourism and remittances.  It would be illusory to expect any country to face such challenges alone.   Cape Verde risked losing its middle income economy status.  “We are a young State”, he said.  After the current crisis, it would grow stronger and go further.

ALEXANDRU CUJBA ( Moldova) aligned himself with the statement made by the Czech Republic on behalf of the European Union, saying the scale of the crisis and extent of the meltdown were underestimated and the crisis went across all borders and impacted emerging markets.  It had impacted the real sector of most States, had spread into all sectors and had a human face, impacting Wall Street and Main Street.  The Millennium Development Goals had been sidetracked and it was necessary to achieve those goals.  He welcomed the commitment of development assistance that had been made during the Conference.

The crisis should bring together the leaders of the major economies to stabilize and secure the global economy.  The speakers in the hall had described the crisis as the most severe crisis since the Great Depression of the 1930s.   Moldova had experienced growth and poverty reduction in recent years, and now its people were being pushed back into poverty and vulnerability.  The recent surge in food and energy prices, and natural disasters, such as the 2007 drought and 2008 flood, had diverted resources from national programmes.  Even with that, the country registered 7.2 per cent growth in gross domestic product (GDP) in 2008.  But, during the first quarter of this year, its economic figures declined and tax revenue declined.  The country’s gross domestic product dropped by 6.9 per cent during the first quarter of this year, compared with same period of 2008.  Only through common efforts and the genuine contribution of all members of the “G-192” would the international community succeed, he said.

ANDREI DAPKIUNAS ( Belarus) objected to new protectionism measures that had been taken under the pretext of protecting consumers.  Such behaviour brought particular harm to small, export-oriented countries and, ultimately, would lead to a dead end.  Protectionist measures had been taken not only to protect domestic markets, but to pressure other nations -– and that was unacceptable.  Given that, he urged the United Nations and the World Trade Organization to ensure the early cancellation of protectionism measures, while United Nations agencies especially should help affected countries to deal with losses stemming from protectionist measures.  He called the Secretary-General to work with the World Trade Organization and the World Bank to implement decisions taken by the Chief Executives Board.

He said the crisis also provided a unique opportunity to move towards sustainable development.  Vital to that was access to modern energy sources.  Without such access, it would not be possible to achieve a high level of human development.  Access to modern energy sources was needed to ensure high quality health and education services, and to deal with climate change.  He called on the United Nations to develop an integrated energy agenda.  With the World Bank, the Organization should support countries with measures to boost energy efficiency, energy savings and new and renewable sources of energy.

EMIL BREKI HREGGVIðSSON ( Iceland) said the experience of his country, which was one of the first to be caught in the world financial storm in 2008, underscored the need for the crisis to be resolved in a collective manner. Together, the international community should work constructively and resolutely to promote sustainable recovery, taking the human dimension into account at both the national and the international level.   Iceland believed that the active participation of the United Nations and wider cooperation with the Bretton Woods institutions was essential to address the challenges facing the world.  It supported reforms already under way within the international financial institutions, which aimed for more equitable representation and more flexible instruments for countries in need.  Closer cooperation would also be needed on financial regulation and supervision to mitigate future crises, and must be complemented by greater political commitment to implement recommendations made by the international financial institutions.   Iceland was also strongly committed to concluding the Doha Round of trade negotiations and called on all countries to observe pledges to avoid protectionism.

He further stressed that all efforts should be made to protect the poor and vulnerable and to keep the Millennium Development Goals on track.  Accountability at all levels should be ensured, while aid effectiveness should be harmonized and aligned through the application of the Paris Declaration and the Accra Agenda for Action.  With two thirds of the increase in world energy use over the next 25 years expected to come from developing countries, access to clean and cost-effective energy resources would be essential to poverty reduction, and the transfer and development technologies for such new energy sources should be accelerated.  Promotion of gender equality and women’s empowerment must also continue during these trying times.  Indeed, harnessing women’s energy and talent was essential to economic recovery.

ADRIAN NERITANI ( Albania), aligning himself with the European Union, said the financial meltdown threatened to reverse “hardly achieved” development goals.  Its spillover effects were due to mismanaged globalization in an increasingly interdependent world.  The formulation and enforcement of international standards might result in increased power for international institutions, which risked growing inflexible if they did not accommodate multiple rules of sovereign nations that competed in global markets.  National response plans, in wide consultation with society and the private sector, were crucial to a collective global response.

He said the United Nations had the legitimacy to discuss important issues and effectively make decisions.  It also had a comparative institutional advantage in the current architecture and its impacts could be far-reaching if countries pursued serious reforms.  With that in mind, Albania had been implementing the “One UN” programme.  It had blunted the initial impacts of the crisis, as its integrated financial markets and lower household and business indebtedness offered natural protection, and it continued to achieve positive economic growth.  But, it was clear that such behaviour might not compensate for risks stemming from a less diversified growth, over-reliance on remittances and an insufficient culture of risk management in financial institutions.  As such, the United Nations would remain indispensable in helping developing countries address multiple crises.  He urged supporting the establishment of a global impact and vulnerability alert system.

ENAYETULLAH MADANI ( Afghanistan), delivering a statement by ZAHIR TANIN, said the global financial crisis had exacerbated other problems of energy, environment and food that particularly affected developing countries.  Afghans had felt such stress first-hand, as rising wheat prices had threatened a deadly food shortage this past winter.  Post-conflict countries, least developed countries and landlocked least developed countries faced unique challenges.  As one of them, Afghanistan would find it difficult to implement its national development strategy and achieve its Millennium Development Goals without intensified global support.  Insecurity caused by the Taliban in parts of the country, coupled with several recent natural disasters, had increased the need for resources, notably humanitarian assistance.  As a result of the crisis, Afghanistan’s exports and imports, and reconstruction of infrastructure, transportation and health sectors had been severely weakened.

“We are at a critical juncture that requires rapid, decisive and coordinated action,” he said.  The causes of the crisis had to be addressed and all had to work together to prevent a tenuous situation from becoming a social and human disaster.  The United Nations had an important role in coordinating international cooperation and he encouraged countries to ensure that United Nations development agencies were fully resourced, particularly so they could increase technical and financial assistance to landlocked developing countries.  He saw the potential of North-South collaboration, as well as that between countries in the South.   Afghanistan could testify to the value of various types of partnerships.  Cooperation could best be accomplished by improving international and regional institutions, supporting global and regional cooperation and increasing the effectiveness of such efforts in recipient countries.  Urging donor countries to meet commitments made at the recent Group of 20 meeting, he also called on them to reduce official development assistance allocations outside the Government system, and rather channel funds through the core budget and trust funds.  A lack of donor coordination, incomplete reporting and unpredictable aid were challenges to be addressed.  He concluded by reiterating the call for an early and successful conclusion to the Doha Round of World Trade Organization trade negotiations.

SIN SON HO (Democratic People’s Republic of Korea) said the global economic and financial crisis was negatively impacting the political, economic, cultural and other areas of many countries, regardless of their level of economic development.  The developing countries had suffered the most, which was the inevitable result of the capitalist economies.  The implementation of the internationally agreed targets for development, such as the Millennium Development Goals, had been gravely challenged.  His delegation valued the fact that the United Nations, the most comprehensive forum encompassing 192 Member States, considered such important issues as analyzing the causes of the current crisis and the reform of the international financial architecture.

The Democratic People’s Republic of Korea supported the outcome document, but was of the view that the document was not the complete and adequate solution to the current crisis.  It constituted the initial stage in enabling the Assembly to proceed with an innovative negotiation process to boldly reform the international financial structure and promote world economic growth in a sustainable way.  The only way to move out of today’s global economic and financial crisis was to replace the outdated system with a new international economic order that ensured equal sovereignty and the interest of all countries, he said.  It was imperative to restructure the old international financial system that relied heavily on the United States dollar.

Archbishop CELESTINO MIGLIORE (Holy See) said it must not be forgotten that poor people in both the developed and developing world, who were suffering most, were also the least able to defend themselves against the crisis.  This disparity threatened to undermine any long-term resolution to the crisis.  Given the vulnerability of so many of the world’s poor, he endorsed the measures designed to help them in the short-term, as well as those longer-term mechanisms that sought, among other things, to stabilize capital flows in order to prevent a recurrence of the crisis.  Since such long-term measures may require a stronger political consensus to enact them, they should focus on sustainability.

Continuing, he welcomed the commitments expressed by the G-20 in April to take steps to end the crisis, but said it was regrettable that so little of that aid targeted the world’s poorest.  Further, that assistance should be offered with as few conditionalities as possible.  The elimination of agricultural export subsidies could provide significant help to poor countries.  Practicable and enforceable mechanisms aimed at transparency were also needed.  Too often, in the past, economics had sought to remove values from its discussions, instead of aiming to create a more just financial system.  In view of the fact that the marginalization of peoples could lead to, and worsen, conflicts, the poorest countries should be given priority in the crisis.  An ethical approach should also be undertaken and should include the participation of civil society.

RANKO VILOVIC (Croatia) aligned himself with the statement made by the Czech Republic on behalf of the European Union and said it was unequivocally clear that the gravity of the financial and economic crisis commanded nothing less than globally coordinated efforts.  Croatia welcomed the convening of the Conference as a timely forum to hear, for the first time, from the whole United Nations membership, especially developing countries.  The Croatian Central Bank had taken several precautionary measures to maintain the orderly functioning of markets, avert destabilizing pressures on the national currency, and address the fallout of the crisis on the country’s financial system.

Given the urgency of the crisis, the United Nations had a central role to play in tackling the impact of the crisis on the world‘s most vulnerable people and had well established and achievable benchmarks set by the international community already in place.  But, in order to provide meaningful development on the ground, the United Nations needed to streamline its operations and better coordinate and reshape funds, programmes and agencies.   Croatia believed that the Conference should build on earlier comprehensive responses launched by the Group of 20 and others in their efforts to mitigate an extended global recession and promote global recovery, he said.  This Conference reaffirmed for Croatia the important role that international financial institutions had to play alongside the United Nations, in responding to the systematic issues of the crisis.  It also underscored the need to strengthen and reform them, to improve their effectiveness and enhance their capacity as a platform for international cooperation.

NEBOJŠA KALUDJEROVIĆ (Montenegro), aligning himself with the European Union, said the convening of the Conference was timely, as the financial, food and energy crises, the flu pandemic and climate change were negatively influencing economic systems and social equilibrium.  Negative spillover effects could create volatile environments, and increase social, religious and cultural tensions that carried paramount political and security repercussions.  Hard-earned progress on the Millennium Development Goals, and other internationally agreed development goals, risked being halted and even reversed, while the burden carried by the world’s most vulnerable populations was only increasing.

Thus, it was imperative to achieve international solidarity in addressing the needs of the world’s poor, placing development issues at the top of the global agenda, he explained.  Echoing calls for comprehensive and coordinated efforts to support poor nations, he urged donors to fulfil their official development assistance commitments.  The United Nations, as the only universal body, had the power to influence change.  Montenegro recognized that better coordination among various agencies, funds and programmes was needed to achieve solid results.  He welcomed the recent Group of 20 agreement, notably the $1 trillion package designed to mitigate the impacts of the crisis on developing countries.  He urged using public-private partnerships to find innovative financing for development, and ensuring that policy measures promoted a green recovery.  In that context, he reiterated the importance of reaching a post-2012 climate change agreement.

Turning to his country, he said Montenegro had experienced 9 per cent growth, but was heavily dependent on foreign direct investment and tourism.  It had not been immune to the impacts of the financial crisis and, as such, had adopted an anti-crisis package that included a provision to intervene in the economy with guarantees for credit support.  Other crucial elements included a reduction of personal income tax rates and the elimination of electricity market distortions.  The goal of such measures was to safeguard the most vulnerable sectors of the economy.  In closing, he said that only in coming together in coordinated action would the world be able to effectively address the impacts of the global financial crisis.

KHALID ABDULLAH KARAYYEM SHAWABKAH (Jordan) said the world economy was facing an acute crisis, the most severe since the 1930s, and that was a threat to development and sustainable growth and the achievement of the Millennium Development Goals.  A multilateral response to the problem was crucial, because of the challenge in trying to limit its scope and duration and its economic, social and environmental impact.  The crisis went beyond the capabilities of a single State, and it required a collective, multilateral response.  The economies of the developing countries were not the cause of the crisis, but its victims, and those developing economies were less capable of adapting to the crisis.  They had less capacity to inject liquidity into their financial systems or to create employment.  They were more vulnerable to fluctuations in the market.

International financial institutions were suffering from distortions, he continued.  The reform of those institutions was of the essence, to ensure the viability of the international economy in the future, he said.  The international system needed bold reforms to create an economic system that ensured development for the weakest economies.

Jordan was concerned that the crisis put the developing States in a more vulnerable position and threatened to annul the development achieved so far, he said.  The crisis might limit official development assistance (ODA) and prevent investments and financial transfers and affect certain sectors, such as tourism.  As a country with a small economy, Jordan was more susceptible to economic fluctuations.   Jordan would do what it could, within national and international frameworks, and hoped that the international solutions would restore confidence in the world economy.

ABDERRAHIM OULD HADRAMI ( Mauritania) said that, of all the challenges facing the United Nations and the international community, all 192 countries were unanimous on the financial crisis.  That crisis exacerbated the situation of developing States, which were already weakened by the food crisis, and imperilled the lives of millions of people.  The number of people who were chronically malnourished was forecast to rise to over 1 billion, while 55 to 90 million people would be plunged into poverty.  Rising poverty and unemployment, coupled with rising prices and growing debt, would be crushing for developing countries, especially in Africa.  The ability of those countries to access foreign investment and aid would become increasingly difficult.  In that regard, the Millennium Development Goals would be undermined.

He said Mauritania faced severe threats from increasing drought and other effects of climate change.  The Government was, with development partners, undertaking an action plan to empower women and promote microfinance and rural and urban development, among other things.  But, the crisis had proven that the non-inclusiveness of the international financial system and insufficiency of its instruments could not provide the responses needed today.  That outdated system had to be rebuilt on solid ground and should account more fully for the needs of developing countries.  Further, any response should be in line with the Doha Agreement, particularly the commitments regarding development aid by developed countries.  He hoped that the Conference’s final outcome document would galvanize the conscience of the world community, orienting it towards the realization of the goals of the United Nations, international cooperation and development, and the well-being and prosperity of all the world’s peoples.

MADHU RAMAN ACHARYA ( Nepal) said the crisis had impacted the least developed countries severely and disproportionately.  The situation in landlocked developing countries had been exacerbated by their remoteness and bottlenecks in transit transport systems.  The crisis had decelerated growth, reduced investment and seriously undermined development efforts.  Most importantly, it had revealed ripple effects in social and human development.  The world had failed to anticipate and appreciate its full scope, having depended on the “invisible hand” of the market-driven economy.

The global response had thus far been piecemeal, and efforts had not matched the scale of the problem -– it would be anyone’s guess how much of the $18 trillion collective stimulus packages was going to help the most vulnerable countries.  He welcomed the S1.1 trillion G-20 package, but said only a limited share -- $50 billion -- of that amount was targeted to low-income nations and there was no explicit reference to the most vulnerable countries.  There was no clear strategy for making the increased Strategic Drawing Rights of the International Monetary Fund available to the most vulnerable countries in a transparent way.  The crisis offered an opportunity to start a greener economy and begin comprehensive reform of the global trade and financial architecture.  The response should be clear:  good policy; good vigilance; and more resources.  For its part, the United Nations should take a proactive role, through a more inclusive and development-oriented economic and financial policy.  It should address multiple challenges, including the food and energy crises.  In closing, he urged the creation of a global stimulus package to restore growth, confidence, credit and jobs.

STEVE D. MATENJE ( Malawi) said that, in developing countries, particularly the least developed of them, the crisis was aggravating hunger and malnutrition for poor families, women, children and people with disabilities and increasing unemployment, reducing revenues and fuelling civil unrest.  It was wiping out the prospects for eradicating extreme poverty, hunger and malnutrition, and would likely have serious repercussions for the achievement of the internationally-agreed development goals.  Combined with the devastating effects of HIV/AIDS, tuberculosis and malaria, it was bound to quickly become a humanitarian crisis of unprecedented proportions, thereby wiping out the development gains made over the last few years.  Although Malawi had enjoyed a robust growth rate of 9.7 per cent of its gross domestic product in 2008, it now faced a real danger of seeing that growth reversed unless urgent action was taken.

He said the United Nations should serve as a common forum to deliberate and find innovative solutions to address the crisis.  It was hoped the outcome of the Conference would address the issues most important to the economic prosperity of developing countries.  For Malawi, those included promoting economic growth as a means of reducing abject poverty and ensuring food and nutritional security at the household and national levels, which was key to the successful implementation of the internationally agreed development goals.  Its agricultural polices had demonstrated that, if properly managed, agricultural input subsidies for poor farmers could contribute dramatically to increases in food production.  Malawi wished to request that its bilateral and multilateral development partners increase agricultural investment and reconsider their policies on agricultural subsidies for least developed countries.  The United Nations should also remain actively engaged in recognizing and addressing the special needs of the least developed countries and the landlocked developing countries.

MARINA ANNETTE VALERE (Trinidad and Tobago), identifying with the statement made on behalf of the Caribbean Community, said that while early indications suggested there was a slowing of the crisis, the timing of a recovery remained unknown.  A fall in demand had led to lower energy prices, meaning that for countries like hers, many large planned industrial projects had been postponed.  Fortunately, her country would still see a rise in economic growth, owing to its low debt ratios and high levels of reserves.  But, like the wider Caribbean regions, it had already experienced large declines in its main export products.  Among other things, that posed a serious challenge not just to attaining the Millennium Development Goals, but to gains already made, making the extension by Governments of social safety nets imperative.

She said considerable fiscal deterioration was already visible and would likely, despite any recovery, remain diminished after the crisis was over.  Moreover, the room for discretionary fiscal action over prolonged periods of time was limited even in countries that started with a strong fiscal position.  The outlook for many countries in the Caribbean remained sombre and, in that regard, the United Nations must embrace the recommendations derived from the Conference, which had, among other things, highlighted the urgent need for a reform of the international financial architecture.  That reform should reorient that system towards the needs of developing countries and towards the shared goal of improved economic growth.

Noting the role of world trade in that system, she emphasized that protectionism would be widely detrimental.  While the International Monetary Fund clearly needed reform, it was important to remember that countries with strong economic policies had been extended needed support.   Trinidad and Tobago was also encouraged by changes at the World Bank, which seemed to recognize the particular needs of developing countries.  Regional and subregional groups must also be utilized to address the needs of this and future generations.

MANSOUR, Permanent Observer of Palestine said he supported the final document adopted by consensus last week.  There was widespread consensus that the current crisis was the most difficult since the Great Depression and had hit the most vulnerable people the hardest.  The United Nations had to undertake its rightful role in producing measures that promoted development and helped fulfil the Millennium Development Goals.  The United Nations should ensure the coherence of the international financial systems, so as to lay the basis for a global economy.

The reform of the financial architecture was necessary to help ensure accountable Governments, he said.  The Palestine economy had been severely impacted by the crisis, as economic contributions from Palestinian expatriates declined.  In addition, the restrictions deliberately inflicted by Israel, and in violation of humanitarian and human rights and laws, had damaged the Palestinian social structure and its ability to achieve the Millennium Development Goals.

The latest report by the United Nations Conference on Trade and Development (UNCTAD) showed that Israel’s incursion into Gaza in December 2008 and January 2009 had caused great economic damage.  Israel also had imposed restrictions on cash into the Gaza and that had created a continued liquidity shortage.  He called on the international community to exert its influence to bring an end to the illegal Israeli policies that hindered the Palestinian economy.  He urged the fulfilment of donor pledges to bolster the institutions of the future Palestinian State.  He called attention to the most vulnerable, who were suffering and were looking to the United Nations to find the way forward.

ALI MCHUMO, Common Fund for Commodities, said many delegates had mentioned the role of commodities in the economic prospects of many developing countries and the commodity sector’s role in the present financial and economic crisis was underlined in the Report of the Commission of Experts.  Chapter 4 highlighted the detrimental effects of commodity price volatility as a key source of instability in the global economic system, and called on the international community to explore ways to mitigate the risks from commodity fluctuation.  The Report of the Secretary-General also highlighted commodity price fluctuation as playing an important role in the origin and cause of the crisis.

The Common Fund believed it was necessary to agree on a global framework to address the commodity problem in a comprehensive and holistic manner, so long-lasting solutions were reached.  The Common Fund partnered with the United Nations Conference on Trade and Development (UNCTAD), United Nations Development Programme (UNDP), and the Agricultural Commodities Programme and launched a Global Initiative on Commodities that brought together stakeholders from across the world to underline the importance of commodities for the development process, he said.  The Initiative identified four aspects of commodity issues that needed to be addressed in a sustained way:  the supply capacity limitations under which commodity producers operate; the lack of diversification of their production export base; effective participation in the value chain; and the need for an international enabling environment, including an equitable, predictable and rule-based international trade system.

The Initiative identified some key areas that would provide growth and reduce poverty in the commodity-dependent developing countries, he said.  Those included significant improvements in international development assistance that reversed the trend of declining aid for agricultural development and the need to design policies that effectively mobilized capital to enhance commodity producers’ access to financial services.  Placing commodities in the framework of discussions that addressed the current crisis would give a new impetus to a long-lasting solution to commodity problems, he said.

ANDERS B. JOHNSSON, Secretary-General of the Inter-Parliamentary Union, said the immediate response to the crisis in many severely impacted countries involved the disbursement of significant amounts of remedial funding and he urged countries to ensure greater transparency and accountability in that process.  Parliaments could do much to achieve that purpose, and a few had set up special oversight procedures.  The crisis highlighted that, once again, States needed to live up to their development assistance commitments.  Without external support, many poor countries would not be able to meet the Millennium Development Goals.  More and better governance was needed, and the State must assume a more assertive role in that process.  Parliaments had played a major role in ensuring that tighter control be applied to the financial system.

He said employment was also central to the debate, as the health of the world economy should not be measured simply in terms of stock market recovery, but in terms of its ability to provide jobs that valued the dignity of work.  States must also recognize that the crisis impacted women and men differently, and solutions must thus build on women’s potential, recognize their contributions and promote gender equality.  Finally, he said parliamentarians wished to contribute to the design of an improved system better attuned to citizens’ aspirations.  Closer interaction should be ensured with international financial institutions.  The debate over good governance of international financial institutions should involve making them more responsive to people’s real needs and opening them to greater parliamentary scrutiny and support.  In closing, he said he insisted that the crisis was one that was foretold.  “We cannot claim to have been ignorant,” he said.  At its most basic level, it concerned morals and ethics.  At a very minimum, the response must be one in which “business as usual” was abandoned, and a better equilibrium between the voice of society, the role of the State and the dynamics of the market was found.

Conference on World Financial

and Economic Crisis

6th & 7th Meetings (AM & PM)

Wide-ranging proposals to mitigate world financial crisis adopted
By consensus at united nations conference in new york

 

General Assembly President Says Outcome Document First Step

Towards Future Path of ‘Solidarity, Stability and Sustainability’

With the world facing the worst financial crisis since the Great Depression, Government leaders and senior ministers meeting at United Nations Headquarters in New York today agreed on a sweeping action plan to help blunt the impact of the economic downturn, especially for developing counties, but “in the interest of all nations [...] to achieve more inclusive, equitable, balanced, development-oriented and sustainable economic development to help overcome poverty and inequality”.

“We are all in this crisis together.  While each country has primary responsibility for its own economic and social development, we will continue to work in solidarity on a vigorous, coordinated and comprehensive global response to the crisis, in accordance with our respective abilities and responsibilities”, the political leaders pledge in the outcome of the Conference on the World Financial and Economic Crisis and Its Impact on Development, which was convened by the General Assembly President, Miguel d’Escoto Brockmann.

Hailing the consensus adoption of the document as a first step towards putting the world on a path towards solidarity, stability and sustainability, Mr. d’Escoto said the Assembly –- the “G-192” -– had now been established as the central forum for the discussion of world financial and economic issues, “a major achievement” in itself.  He added that the historic Conference had also called on the Assembly to follow up on the issues raised -- from bolstering the role of the United Nations to strengthening South-South trade and reform of the Bretton Woods institutions -- through the establishment of an ad hoc open-ended working group that would report to it before the end of its upcoming sixty-fourth session.

Cautioning against complacency, he urged concerted action to tackle other crises hovering in the background, such as global warming, food insecurity, fuel and clean water shortages, and humanitarian emergencies.  “The proposals we have adopted today point in this direction [...] but we will not be content so long as these pressing issues remain unresolved”, he said, adding that he believed the Assembly was on the verge of taking a new step towards a human family that was focused on economic and ecological justice and “which is united with itself, nature and Mother Earth”.

The nearly 60-paragraph text (document A/CONF.214/3), which will be forwarded to the Assembly for adoption during its current session, expresses world leaders’ belief that the crisis, “which began in the world’s major financial centres, has spread throughout the global economy [and is] negatively affecting all countries, particularly developing countries, threatening the livelihoods [and] development opportunities of millions of people”.

On the way forward, the leaders pledged to combine their short-term responses to meet the immediate impact of the financial and economic crisis, particularly on the most vulnerable countries, with medium- and long-term responses that necessarily involve the pursuit of development and the review of the global economic system.  In that context, they proposed a course of action that included, among others, strengthening the capacity, effectiveness and efficiency of the United Nations and its development system.  They also request the Economic and Social Council to coordinate system-wide follow-up to the outcome document’s recommendations, and consider setting up an ad hoc panel of experts on the crisis and its impact on development.

The wide-ranging text stresses that developing countries did not cause the crisis, but were nevertheless being affected by it, and the leaders said their endeavours must be guided by the need to address the human costs:  an increase in the already unacceptable number of poor and vulnerable, particularly women and children, who suffer and die of hunger, malnutrition and preventable or curable disease; a rise in unemployment; the reduction in access to education and health services; and the current inadequacy of social protection in many countries.

The leaders were particularly concerned about the impact on countries in special situations, including least developed countries, small island developing States and landlocked developing countries, and on African countries and countries emerging from conflict.  They were equally concerned about the specific development challenges of middle-income countries and low-income countries with vulnerable and poor populations.

They agreed that their collective responses to the crisis must, therefore, be made “with sensitivity to the specific needs of these [developing countries]”, which included, among others:  trade and market access; access to adequate financing and concessionary financing; debt sustainability; trade facilitation measures; the Millennium Development Goals; and previously agreed development commitments.  Therefore, an adequate share of any additional resources -— both short-term liquidity and long-term development financing —- will need to be made available to developing countries, especially the least developed countries.

“Going forward, our response must focus on creating jobs, increasing prosperity, strengthening access to health and education, correcting imbalances, designing and implementing environmentally and socially sustainable development paths and having a strong gender perspective”, the document says, adding that the collective response must also strengthen the foundation for a fair, inclusive and sustainable globalization supported by renewed multilateralism.  “We are confident that we will emerge from this crisis stronger and more vigorous and more united.”

Expressing their commitment to restoring confidence and economic growth and creating full and productive employment and decent work for all, the leaders also pledge to, among other things, make national stimulus packages work for all, help contain the effects of the crisis and improve future global resilience, and improve regulation and monitoring mechanisms.  “We stress the urgent need for further reform of the governance of the Bretton Woods institutions, on the basis of a fair and equitable representation of developing countries, in order to increase the credibility and accountability of these institutions.”

Citing a consensus on the need to modernize the global financial institutions, they said such reforms should enhance the perspective, voice and participation of developing countries, including the poorest.  They specifically called for inclusive consultations on further reforms to improve the responsiveness of the World Bank.  Looking forward to accelerated progress to increase the credibility and accountability of the International Monetary Fund (IMF), “we strongly support completion of the next quota review, which [...] is expected to result in an increase in the quota shares of dynamic economies, particularly in the share of emerging market and developing countries as a whole, to be completed no later than January 2011”.

The Conference, which will run through Monday, 29 June, also held the last of its four round-table panel discussions, today focusing on the “Contributions of the United Nations development system in response to the crisis”.  It featured Hilde F. Johnson, Deputy Executive Director of the United Nations Children’s Fund (UNICEF); Helen Clark, Administrator of the United Nations Development Programme (UNDP); Thoraya Obaid, Executive Director of the United Nations Population Fund (UNFPA); Manuel Aranda da Silva, Deputy Executive Director a.i. of the World Food Programme (WFP); and Pedro Páez, former Minister for Economic Coordination of Ecuador and member of the Commission of Experts of the President of the General Assembly.  It was chaired jointly by Ralph E. Gonsalves, Prime Minister of Saint Vincent and the Grenadines, and Dipu Moni, Minister for Foreign Affairs of Bangladesh.  (See Press Release DEV/2755.)

The other three round tables considered, respectively, “The role of the United Nations and its Member States in the ongoing international discussions on reforming and strengthening the international financial and economic system and architecture”, “Coordinated and collaborative actions and appropriate measures to mitigate the impact of the crisis on development”, and “Present and future impacts of the crisis on, inter alia, employment, trade, investment and development goals and the Millennium Development Goals”.

The Conference has also featured plenary sessions, during which more than 100 delegations have expressed their concerns and shared national experiences on the myriad challenges posed by the global economic slowdown and how they could be best addressed.  Today, Celso Amorim, Minister of External Relations of Brazil, echoed the sentiments of many earlier speakers that it was at the United Nations that countries without a voice in existing financial governance structures could put forth their views.

Some of those countries were among the world’s poorest -– those that were the hardest hit by the economic turmoil -– and their interests must be borne in mind in collective actions towards recovery, he said.  A swift conclusion of the Doha Development Agenda would send a strong message against protectionism.  Today’s challenges also called for reforms to global governance, as the current structures of the Bretton Woods institutions fell short in terms of legitimacy and effectiveness.  Quotas and voting rights must be updated.  Finally, he added that the Conference was an historic opportunity to change, and the balanced outcome document was a testament to the United Nations’ vitality.

Mali’s representative, speaking on behalf of the least developed and landlocked countries, said a comprehensive solution to the crisis, that put an end to the waste of limited natural resources, reformed the global financial architecture and laid the basis for a sustained recovery, was required.  Useful proposals had already been made, but the group of landlocked countries had special circumstances that made them especially vulnerable to outside pressures.

Indeed, with 12.5 per cent of global land area and 4 per cent of the world population, they had a gross domestic product (GDP) equivalent to only 0.3 per cent of global GDP, and the crisis was already reducing even that low level.  They received only 0.34 per cent of foreign direct investment, while 21 of them had a foreign trade deficit.  Moreover, growth rates had declined by a range of 6 to 13 per cent.  Landlocked countries also faced challenges because they were far removed from international markets.  As such, they were the most affected by the downturn in global trade.  Today, more than ever, support from donors and other financial institutions was critical to fulfilling the 2003 Almaty Programme of Action, which aimed to establish a new global framework for developing efficient transit transport systems in landlocked and transit developing countries.

Also making statements in the general debate today were ministers of Chile and the Democratic Republic of the Congo.  The State Secretary of Austria spoke, as did the Director of the Research Department of the Bank of Israel.

Representatives of Nauru, Philippines, Iran, Namibia, France, Qatar, Costa Rica, Lebanon, Uzbekistan, Syria, Monaco, Libya, Maldives, Venezuela, San Marino, Senegal, Singapore, Uruguay, Belgium, Argentina, Mongolia and Djibouti also addressed the Assembly.

Speaking in explanation of position on the outcome document were the representatives of the United States, Czech Republic (on behalf of the European Union), Cuba, Venezuela, Nicaragua, Canada, Iran, Jamaica (on behalf of the Caribbean Community), Bolivia, Sudan (on behalf of the “Group of 77” developing countries and China) and Japan.

A representative of the International Union for Conservation of Nature and Natural Resources also spoke.

The Conference will reconvene at 10 a.m. Monday, 29 June.

Background

The General Assembly today met to conclude the plenary debate of its Conference on the World Financial and Economic Crisis and Its Impact on Development, which aims to identify emergency and long-term responses to mitigate the impact of the crisis, especially on vulnerable populations, and initiate dialogue on the transformation of the international financial architecture.  (For day one of the Conference plenary, see Press Release DEV/2747.)

Statements

CELSO AMORIM, Minister of External Relations of Brazil, said that it was at the United Nations that countries without a voice in existing financial governance structures could put forth their views.  Some were among the world’s poorest -– those that were the hardest hit by the economic downturn -– and their interests must be borne in mind in collective actions towards recovery.  Noting that last December the depth and scope of turmoil was largely unknown, he said the decision to create a mandate for today’s Conference had proved timely.  Six moths later, despite some positive signs, the picture was still gloomy:  hard-earned gains had been lost, while demand had contracted and trade finance for poor countries further dimmed recovery prospects.

A swift conclusion of the Doha Development Agenda would send a strong message against protectionism, he said.  Most developing countries depended on agricultural exports and eliminating distorting subsidies by rich countries would have an important impact on developing nations’ ability to trade.  While developed countries should fulfil their official development assistance (ODA) commitments, those alone would not suffice -– additional measures by multilateral institutions were needed and the resources of both the International Monetary Fund (IMF) and the World Bank must be increased.   Brazil favoured a new allocation of special drawing rights.  Counter-cyclical policies -– targeting social protection and industry bailouts, among other things -– should not be the privilege of the rich; poor countries needed them the most.

The path to full recovery would be long, he said, and the role of the State, alongside private enterprise, must be reappraised during the process.   Brazil, while affected by the crisis, was spared its worst effects, due primarily to the fact that it diversified trade partners, invested in the internal market, and promoted infrastructure expansion.  Today’s challenges called for reforms to global governance, as current structures of the Bretton Woods institutions fell short in terms of legitimacy and effectiveness.  Quotas and voting rights must be updated.  In closing, he said the Conference was an historic opportunity to change.  The balanced outcome document was a testament to the United Nations’ vitality.

REINHOLD LOPATKA, State Secretary in the Federal Ministry of Finance of Austria, aligning his remarks with those made on behalf of the European Union, warned that the crisis might not be short-lived and posed serious threats to all countries, but particularly the low-income and least developed countries.  Their hard-won achievements in fighting poverty and hunger, reaching sustainable economic growth, and making progress towards the internationally agreed development goals were jeopardized.  The recommendations from the Commission of Experts convened by the President of the General Assembly contained a series of valuable proposals to counter the crisis.

He said Austria was convinced that the success of a rapid and effective response to the crisis on a global scale largely depended on the common efforts of donors, developing countries, organizations like the United Nations Development Group and the international financial institutions.  Improving the quality and effectiveness of aid by accelerating the implementation of the Paris Declaration and the Accra Agenda for Action would be decisive.  Applying best practices in such effectiveness as part of the crisis response would also help retain public support for ODA, despite the economic downturn.  In that context, the capacity of the United Nations to “Deliver as One” should be strengthened and duplication of effort avoided.  To make the fourth United Nations Conference on the Least Developed Countries in 2011 a success, the least developed countries and organizations within the United Nations system should work to produce a tangible result.  Further, the Financial Transaction Tax was one way to scale up resources for development, and Austria was looking forward to the Secretary-General’s report on innovative sources of development finance at the sixty-fourth General Assembly.

PAULA QUINTANA, Minister of Planning of Chile, speaking briefly on behalf of the Union of South American Nations (UNASUR), said that bloc welcomed the convening of the current Conference, which would show the world that the United Nations had an important role to play in issues related to the economic development of its Member States.  For that reason, the countries of the Union would actively support the implementation of the Conference’s outcome document to ensure that it was an effective tool for a joint and coordinated response to the impact of the global financial and economic crisis on development.

Continuing in her national capacity, she said the timely holding of the Conference was an example of the viability and ability of the United Nations to respond to the major challenges of the day.  The crisis had presented the international community with stark challenges and choices.  It had revealed weak points that demanded speedy actions to shore up, at both national and multilateral levels, to mitigate its impact on development for the developing countries.  At the global level, specific measures would be needed to first stabilize financial markets and restore confidence, and then to bolster commitment and solidarity, especially among those that bore greater responsibility for the crisis.

She went on to say that the international community could not forget the origins of the crisis or the conditions under which it had been allowed to occur.  “We are paying for the imbalance between the market and Government carried to the extreme”, she said, noting that the weaknesses of the financial regulations system coupled with irresponsible behaviour and a lack of transparency had let to excessive risk-taking.  That had precipitated a serious financial contraction that had led the world to where it was today.  Financial stability was a global good requiring broad leadership capable of creating a new global financial architecture.  In that regard, she said the United Nations –- “the G-192” -- should spearhead such a reform process and ensure that the new financial architecture was equitably redesigned and its decisions implemented.

KARNIT FLUG, Director, Research Department, Bank of Israel, pointed out that the global economic crisis, if left unchecked, could undermine poverty reduction rates and slow economic gains.  She called on delegates to confront such concerns before they were exacerbated.  With its vast network of agencies, the United Nations was most suited to address the impacts on developing countries.  Essential to any response were various principles.  Increased coordination among countries was needed, and additional information exchange would enhance the effectiveness of actions.  Counter-cyclical fiscal stimulus was desirable whenever possible, but it must be tailored to each country’s circumstances.  Preserving global trade was necessary, and it was most important that nations not enact protectionist legislation.

She said improved financial regulation, including better harmonization of accounting standards, was needed and existing international financial institutions must be improved.  Indeed, the responsiveness and representation of the IMF and the World Bank should be improved, with greater flexibility to extend assistance to countries as needed.   Israel, a small export-oriented economy, was highly integrated into the global economy and had been substantially impacted by the crisis.  Its monetary policy had responded swiftly, with the Bank of Israel cutting its key rate dramatically in successive steps.  In the last year, it regularly bought foreign currency.  Exports were crucial to Israel’s growth and, as such, growth forecasts in the near future depended on what happened to international trade.  In Israel, as elsewhere, the crisis had highlighted deficiencies in the function, regulation and supervision of financial markets, and Israel would draw on lessons gained abroad regarding required reforms.  She concluded by saying that her country understood that the crisis was multifaceted.  The bodies and mechanism that sought to minimize the impacts must work in concert.

MARLENE MOSES ( Nauru), speaking on behalf of the Pacific small island developing States, said the Conference must, in clear and unambiguous terms, identify and acknowledge the root causes of the financial and economic crisis.  It must also determine how the international community could strengthen and better coordinate its ongoing emergency response, including proposals for mitigating the negative impacts of the crisis on sustainable development and strengthening funding mechanisms available to the most affected developing countries.

While the Pacific islands did not want to apportion blame, the delegation nevertheless believed there must be an agreed understanding of what went wrong, so the international community could learn from its mistakes.  With that in mind, she said, policy failures, loose monetary policies, inadequate regulation and lax supervision had collided to create financial instability.  Moreover, a number of international financial institutions had continued practices, such as deregulation and capital market liberalization that were now recognized as having contributed to the rapid spread of the financial contagion.

As for the impact of all this on her region, she said that, although the Pacific islands’ banking systems appeared to be shielded thus far, the market value of the offshore investments held by the region’s trust funds had declined.  Tourism, a main driver of most of regional economy linked to overseas economic conditions, was also on the decline.  Growth forecasts for the tourism industry had been revised downwards, as it was clear that potential visitors who were seeing their incomes fall, were likely to decrease their discretionary spending, foreign holidays included.  She added that remittances from citizens living abroad, on which the region was highly dependent, would also be negatively impacted.  While the region was taking steps on its own to address those and other challenges, much more needed to be done.  Pacific small islands would need financial support from their development partners to help blunt the impacts of the crisis and help them promote development objectives in areas such as health, education and environmental protection.

OUMAR DAOU (Mali), speaking on behalf of the least developed and landlocked countries, said a comprehensive solution to the crisis that put an end to the waste of limited natural resources, reformed the global financial architecture and laid the basis for a sustained recovery was required.  Useful proposals had already been made, but the group of landlocked countries had special circumstances that made them especially vulnerable to outside pressures.  Indeed, with 12.5 per cent of global land area and 4 per cent of the world population, they had a gross domestic product (GDP) equivalent to only 0.3 per cent of global GDP, and the crisis was already reducing even that low level.  They received only 0.34 per cent of foreign direct investment (FDI), while 21 of them had a foreign trade deficit.  Moreover, growth rates had declined by a range of 6 to 13 per cent.

Beyond those dire circumstances, he stressed that the least developed and landlocked countries also faced challenges owing to their remote location from international markets.  As such, they were the most affected by the downturn in global trade, which was not easily remedied given their tight local markets.  Specific attention should, therefore, be paid to those particular countries, especially to improve transportation infrastructure, obtaining special treatment for their goods, and mobilizing private funding and investment.  Today, more than ever, support from donors and other financial institutions remained critical to fulfilling the Almaty Programme of Action.  He urged the Group of 20 to implement their recovery plans quickly.  Further, a concise declaration that reflected the will to act and establish a true global partnership was needed from the Conference.

HILARIO G. DAVIDE, JR. ( Philippines) said that speaking of the world economic crisis brought the international community to contemplate other crises, including the ecological crisis, which was euphemistically called the climate change, the food and the energy crisis.  Indeed, the financial crisis was the inevitable result of those other catastrophes, which together indicated a “serialized retaliation by an aggrieved Mother Earth”.  Common sense, experience and scientific findings were convincing that climate change was the primary cause of those crises.  But, while the United Nations was preoccupied with searches for solutions to those crises, not much could be done if Member States and their peoples were not moved to humbly accept their direct and indirect responsibility, and to show sincerity in restoring and repairing nature’s harmony.

“We should now stop blaming each other”, he said, stressing that now was the hour of unity.  This Conference brought to the fore a genuine and firm resolve to determine the outlines of the future global regulatory framework and ensure that the impact on the development agenda was minimized.  For its part, the Philippines was embarking on an Economic Resiliency Plan (ERP) to stimulate its economy through government spending, tax cuts and public-private sector projects.  It was also implementing a Comprehensive Livelihood and Emergency Employment Programme to protect its poorest and was upgrading health care through such instruments as the Philippine Health Insurance Corporation.  Elsewhere, the Government was confident that the gravest implications of the crisis were easing, but proceeding cautiously lest a misstep cause its people to “shoot ourselves in the foot”.  It had also proposed to the Association of South-East Asian Nations (ASEAN) and its three dialogue partners, China, Japan and the Republic of Korea, surveillance and credit tightening, as well as a strengthening of the Chiang Mai Initiative at the regional level.  Like others, it also called for an early and successful conclusion of the Doha Round of trade negotiations.

MOHAMMAD KHAZAEE ( Iran) said lax Government oversight in major developed countries, together with extensive discrimination in the current world economic order, had led to the crisis and contributed to its speedy spread.  Provisions such as the right of veto in the United Nations Security Council, or decision-making power in the Bretton Woods institutions, had been widely and unilaterally misused for imposing and escalating abiding injustices.  He was disappointed to see that the solutions to the economic crisis were being crafted mainly by a “discriminatory process” and self-authorized bodies such as the G-8 and G-20.  Such approaches aimed to shift the burden of addressing the crisis on those countries that bore the least responsibility for causing it.

So, the crisis was partly due to prevailing systemic injustices coupled with the neglect of the legitimate rights of nations, disregard for norms and the greed of a few, he said.  It was against such a backdrop that an ambitious, substantive and comprehensive reform of the international economic and financial system seemed more necessary than ever.  The outdated systems in place today, which zealously followed a doctrine solely based on market liberalism and profit-taking, had been exposed as a failure.  Not only had it been unable to ensure global economic stability, it had also failed to sound the alarm ahead of the meltdown of key financial markets.  He stressed that reforms must go beyond mere “cosmetic repairs”, and the discussion must include a central role for the United Nations, which would lend legitimacy to any final decisions on the matter.

KAIRE M. MBUENDE ( Namibia) said his country attached great importance to today’s Conference, as it was taking place at a critical moment in history.  The current financial crisis had arrived in the midst of food and energy crises.  Net food-importing countries like his had had to divert resources from development to emergency relief, while imports of high-priced food had destabilized national budgets.  Indeed, the financial and economic downturn revealed existing imbalances in the world economic and financial architecture, international financial and economic institutions were not in a position to effectively carry out their mandates, and there was a need for effective surveillance and warning systems at the global level.

He said that Namibia’s real gross domestic growth of 4.1 per cent in 2007 had fallen to 2.4 per cent in 2008 -- due mainly to reduced mining activity as a result of the crisis -– and was expected to drop to a mere 1 per cent in 2009, as the impact of the crisis continued to unfold.  The Government had taken various counter-cyclical measures to stimulate domestic demand and growth.  It implemented fiscal and monetary policies to ensure that shocks were absorbed.  Namibia had noted recent commitments made by the Group of 20 and called for their immediate fulfilment to bring the global economy back on the growth path.  Regional and subregional development banks had to be recapitalized to respond to requests for development financing, and world trade had to be resuscitated.  He was deeply concerned at the impasse in the Doha Round of trade negotiation.  In closing, he said the crisis was global and required concerted, coordinated actions to find a solution.

JEAN MAURICE RIPERT ( France) said that, by its violence and extent, the crisis had touched the entire world and threatened to undue recent progress in development goals.  Indeed, it was a crisis like no other and, among other things, was a symptom of an insufficiently regulated international financial system.  The global response must, therefore, be commensurate to the challenges and be inclusive.  The United Nations can and must contribute to defining a coherent response by supporting efforts at the international level in a range of different forums.  Unprecedented measures had already been adopted at April’s Group of 20 summit in Italy, with many of their programmes having subsequently been launched.  Further, a refusal to engage in protection had been expressed at the summit, and the issue of tax evasion and illegal capital flows was also touched on.  That Group had also decided to work towards fairer representation within the international financial system.

He emphasized that France remained committed to its ODA obligations and would continue to support debt alleviation measures through the “Evian Approach”.  It would remain one of the main defenders of new financial international regulations.  It had also been among the first countries to call for a strong response to the food price crisis and had increased its commitments to agricultural development by $1 billion over five years.   France was also working to find new, more reliable sources of financing.  Market mechanisms would be one avenue for that pursuit, as would mechanisms for sharing funding.  Though considerable, those efforts would not ensure the global, inclusive system that was hoped for.  Thus, commitments to such a system must be preserved and the United Nations should play a central role in reforming that system.  A decent work framework should be incorporated in all those efforts, which must continue since a great deal remained to be done.  In that, dialogue and cooperation would be invaluable.

NASSER ABDULAZIZ AL NASR ( Qatar) said that, while the crisis started in developed countries, the poorest nations would eventually carry the heaviest burden, as they were the least capable of taking protective action.  Thus, their best interest must be the starting point for finding a solution.  Underlying factors to the current situation included inconsistent and insufficiently coordinated macroeconomic policies and inadequate structural reform.  Current estimates showed that global financial flows to developing countries would decline by half, and the impact of the crisis was now being felt in all aspects of the global economy.  Trade volumes were projected to deteriorate and the ability to provide food security would be limited.

He said solutions would not be found through fiscal reform only -– an integrated approach that recognized the interaction among all such issues would be needed.  Citing the International Labour Organization (ILO), he said 45 million new job seekers entered the labour market annually, meaning that 300 million new jobs in the 2009 to 2015 period were needed.  Also, the IMF had been excluded from playing a role in the developed countries’ response to their financial difficulties and far-reaching changes to its role were needed.  In reforming the global financial system, it was imperative that two objectives -– achieving stability and providing financing for development -– be mutually reinforcing processes.  Reform should be undertaken in a way that provided adequate resources to developing countries, without hindering their ability to develop domestic resources.  It should reflect the weight -– and full fledged responsibility -- of developing countries in a manner commensurate with their role in trade and finance.  Finally, he recalled that Qatar had hosted last year’s Follow-up International Conference on Financing for Development, in part to promote international partnership so that developing countries could achieve sustainable development.

JAIRO HERNANDEZ-MILIAN ( Costa Rica) said the United Nations must play a vital role in assessing the impact of the current crisis “that is shaking the world”.  As a multilateral forum, the Organization’s involvement would help ensure that developing countries did not carry the bulk of the burden for a crisis they did not cause.  The world had watched as financial giants had collapsed amid a system that lacked sufficient oversight and control.  It had also watched as the impact of that collapse spread, affecting, among other things, employment, social security, foreign investment, tourism and remittances.  As for the Latin American region, the challenges would be greatest for the most vulnerable communities.  So the key tasks for the region’s Governments was to ensure that democratic institutions and social protection mechanisms remained on stable ground.

He said Costa Rica hoped the current economic downturn did not evolve into a structural crisis leading to a deep regional or global recession; his country could not afford to lose ground towards attaining the Millennium Development Goals.  He said that, at the international level, responding to the crisis involved the reinvention of certain sections of the international system.  “We need financial architecture with more transparent systems of control, regulation and information, in order to prevent ourselves from repeating this story”, he said, appealing for a more symmetric distribution of burdens among countries.  Overall, reform processes should unfold in an ethical manner, with a view towards social protection and reducing individual suffering.  Finally, he urged the Assembly to keep an eye on other ongoing challenges, such as climate change.  “This crisis gives us a creative opportunity to redesign the international economy to one that brings into harmony the production of goods and services and information technology, on the one hand, and social development and environmental sustainability, on the other”, he said.

NAWAF SALAM ( Lebanon) said the financial and economic crisis had created new challenges for developing countries, forcing them to divert resources originally earmarked for development to other areas that would help them cope.  The economic, human and social impacts were alarming.  In 2009:  unemployment was estimated to increase by 59 million people; the number of undernourished to reach 1 billion; and the level of FDI to developing nations to drop by 32 per cent.  The root causes of today’s situation lay principally in deficient regulations and mounting international imbalances.  Coordinated action among all States was needed and, in that context, he recommended the adoption of a global stimulus package to help developing countries recover.

For their part, developed nations had to scale up assistance by providing adequate and predictable financing without conditionality, which could help poor nations find the necessary fiscal space to implement counter-cyclical measures, he said.  While encouraged by the recent Group of 20 commitment to make $1.1 trillion available for global recovery, he noted with concern the adoption of protectionist measures by 17 of its 20 members.  Also, the Bretton Woods institutions must be substantially reformed, particularly their governance structures.  Describing Lebanon’s situation, he said that, while the country had been able to minimize the crisis’ adverse effects, it could not be completely shielded, especially as 20 per cent of its gross national product (GNP) came from remittances.  The Government had adopted a development-oriented plan to reinvigorate the economy that included a significant wage increase for public and private sector employees.

MURAD ASKAROV ( Uzbekistan) said that, in the face of the current crisis, human civilization had reached a critical moment.  For the first time, States could not address the challenges by merely creating new markets or new mechanisms.  Indeed, everyone had witnessed the collapse of financial giants that until recently had represented the very epitome of economic success.  It was clear that deep structural reforms were needed, and such restructuring must lead to mechanisms that served the global good, rather than their own interests or the interests of a few.  Success in that endeavour hinged on the effectiveness and coordination of measures taken by individual States and at multilateral levels.

He went on to say that Uzbekistan had begun to take a series of measures as soon as the effects of the crisis began to appear, including the recapitalization of its banks and simplification of its taxation system.  It had, in effect, retooled the foundations of its economy and, in the process, had put in place various social protection schemes and set in motion initiatives that would create nearly 100,000 new jobs.  On the way forward, he called on the Assembly to consider measures aimed at creating a more stable financial and economic system.  Stakeholders should work together to find common denominators on which a new model for socio-economic development, banking and trade could be based.  He added that the efforts of the G-20 and the G-8 should not focus solely on resolving problems among their respective memberships.  Rather, they should help with drafting recipes to ensure the current “financial illness” was addressed in a manner that ensured sustainable development for all.

BASHAR JA’AFARI ( Syria) noted the agreement among speakers that the world was confronting one of the most dangerous crises in many decades.  It was being worsened by both the food crisis and the threats posed by climate change.  As a result, aid and foreign direct investment had declined, potentially undermining the Millennium Development Goals and other development goals.  Unlike developed countries, developing countries lacked the resources to counter the crisis.  The rapid expansion of the crisis was clear proof that radical reform of the international financial system was needed.  The current system was not democratic; rather, it imposed the will of the most developed countries.

Because Syria had a strategic reserve of foreign currency and was among the least indebted countries, he said trust in its economy should be strengthened.  Nevertheless, the Syrian Government was working to lessen the impact of the crisis on its economy and people.  Among other developments, the Economic and Social Commission for Western Asia (ESCWA) had recently adopted the Damascus Declaration.  However, measures undertaken by some developed countries had reduced the trust in the international economic system.  States taking unilateral measures should avoid using such policies.  Obstacles preventing countries from joining the World Trade Organization that stemmed from political motivations did not contribute to the creation of an enabling atmosphere vis-à-vis the global response.  He stressed that the global response should not ignore the situation of peoples under foreign occupation.  Because the crisis was global, solidarity in fashioning a response was required, and the outcomes of the Conference should seek to implement genuine reform in the Bretton Woods institutions.

GILLES NOGHÈS ( Monaco) noted that a lack of financial market regulation had played a role in creating the current recession.  The collapse of trade and reversal of capital flows had only worsened the tenuous situation related to high food prices.  As with the climate crisis, the economic and financial crisis impacted the most vulnerable populations, particularly women, who constituted the majority of labour in developing country export sectors.  Given that situation, Monaco, working with Andorra, decided to finance a joint programme of the World Food Programme (WFP) and the United Nations Population Fund (UNFPA) to reduce the vulnerability of women of child-bearing age.

Achievement of the Millennium Development Goals was already in question before the financial and economic crisis, he continued.  The situation called on all to work together, as the spectre of a humanitarian disaster required a concerted and coordinated response.  For its part, Monaco supported several measures of the United Nations System Chief Executives Board for Coordination (CEB), including to create minimum social protections that met humanitarian needs.  His Government also supported the creation of a follow-up mechanism.  He welcomed the adoption of an “unprecedented” programme by the Group of 20 that included provision of budget recovery resources.  Expressing Monaco’s grave concern at the environmental crisis, he said the Government would contribute to creating a green economy, notably by putting in place essential climate change adaptation measures.

IBRAHIM DABBASHI ( Libya) said everyone understood that the current crisis had led to one of the worst economic downturns in the past 60 years, causing deep socio-economic fissures and threatening to undermine achievements by developing countries to attain internationally agreed development goals.  It should not be a surprise then that export volume in developing countries was declining, unemployment was rising, and social conditions and services were fraying.  With that in mind, he said, it was clearly time to deal effectively with the current inequitable and antiquated financial mechanisms and institutions, by reforming them in a manner that ensured not only fairness, but a heightened awareness of the needs of the world’s most vulnerable populations and communities.

He went on to say that Libya was concerned by decisions that had been taken by such groups as the G-20, which adopted measures and plans out of sight of the wider international community, and especially the developing world.  Indeed, such decisions must at least include broader regional groupings, as well as increased participation by African countries.  Beyond action at that level, the international community must stand by its pledges to assist Africa and other developing regions attain the goals to which all nations had agreed were critical for sustainable development and stability.

He stressed the importance of bringing about a truly global recovery, driven by higher quality ODA and better representation of developing countries in decision-making processes.  History had shown that economic unilateralism in many cases led to political unilateralism.  Therefore, the United Nations should take a priority role in defining not only the reform of global finance structures, but also the role and methods of interaction between its Member States and those institutions.

AHMED KHALEEL ( Maldives) said that as a member of two of the three most vulnerable groups identified by the United Nations -- the least developed countries and the small island developing States -- his country’s fragile economy had felt a tremendous and unimaginable impact from the crisis.  It was stretching already-limited resources to deal with the country’s inadequate housing, lack of modern transportation systems, substance abuse and unprecedented fiscal problems.  Coming after a series of other challenges in the past few years, which started with the “Asian tsunami”, the crisis was causing shortages in foreign currency, price hikes in primary commodities, and the withdrawal of private capital flows and foreign investment.  The tourism sector, which accounted for 30 per cent of GDP, had declined by 11 per cent in the first four months of 2009.  Moreover, oil price fluctuations and falling tuna prices were negatively affecting the fishing industry.

He said the Maldives was committed to working with the international community to take all necessary precautionary measures to ensure that the crisis did not adversely affect the well-being of its peoples.  But, it did not have the necessary fiscal capacity and institutional arrangements to counter the fallout.  Its only means of funding domestic expenditures came through borrowed sources and foreign grants, thereby aggravating its pubic external debt burden.  By the end of 2009, forecasts said that debt levels would reach 45 per cent of GDP, with debt servicing increasing to 10 per cent of total exports of goods and services.  That would unravel the modest development achievements it had made in the last decade.  Urgent assistance was needed to stabilize the situation and maintain the growth rate, employment levels, and physical and social infrastructure, while expanding the social safety net for the most needy.  That assistance was also needed to maintain the country’s development trajectory, which had put it on track to meet the Millennium Development Goals.  Further, the world’s commitment to “seal the deal” during climate change negotiations in Copenhagen was imperative to the country’s future.

Adoption of Outcome Document

The Conference began its afternoon session with the adoption by consensus of its outcome document contained in document A/CONF.214/L.1

Explanation of Vote

Speaking in explanation of vote, the United States representative welcomed the last three days as an important opportunity to discuss the global crisis.  His Government had listened with great interest and had held many informative discussions with delegations from all regions.  The outcome offered views in several paragraphs on the governance and operational aspects of international financial institutions, and the Bretton Woods institutions in particular.  Those bodies had governance structures independent of the United Nations.  Any decisions on their reform could only be made by shareholders and their boards of governors.  The United States did not interpret the language in the document as endorsing a formal United Nations role in decisions affecting them.

Regarding paragraph 15, he said that when countries faced an acute shortage of foreign reserves, they should implement efficient policy and monetary responses.  Trade measures would not solve balance-of-payments problems associated with capital account pressures, a widening fiscal gap or other corporate failures.  Use of them should be avoided and only resorted to when applied in accordance with World Trade Organization (WTO) rules.  Articles 12 and 18 related to the General Agreement on Trade and Tariffs and the Understanding on the Balance-of-Payments Provisions.  Those conditions included requirements not included in the outcome.  There was no provision under the WTO Agreement for use of “trade defense measures” to address balance-of-payments issues.  Paragraph 15 also described temporary capital restrictions and debt standstills as a way to address foreign reserves shortages.  The United States did not condone the use of capital controls.  If used, they should be taken only as a last resort on a temporary basis and in line with existing multilateral and bilateral agreements.

On paragraph 20, which encouraged regional reserve currency arrangements, he said such arrangements should be judged by whether they contributed to regional and global financial stability.  Paragraph 25 noted that the WTO was engaged in a monitoring process.  Duplicative efforts should not be undertaken across other bodies.  Proposals suggested in the paragraph could undermine existing monitoring and reporting process, and all countries needed to be vigilant about how they responded to the crisis.

Regarding paragraph 27, on unemployment, he said the United States was committed to allowing labour migration to meet labour market needs.  On paragraph 28, the United States interpreted the reference to ODA targets to mean donor countries’ individual targets.  For paragraph 34, which focused on the need for a structured framework for cooperation in the area of debt, he said such a framework should be explored in line with existing structures, including the Paris Club.  Regarding paragraph 35, he said the United States joined others in supporting a general special drawing right (SDR) allocation that would inject $250 billion into the world economy.  However, they were a monetary asset and not suitable for development finance.  On paragraph 37, the United States interpreted international commitments to include internationally agreed financial standards.  Paragraph 38 referred to promoting double taxation agreements, which should apply only in instances when significant double taxation existed between relevant jurisdictions.  Finally, regarding paragraph 54, the United States’ strong view was that the United Nations did not have the expertise to provide direction for meaningful dialogue on a number of issues, such as reserve systems or the international financial architecture.

The representative of the Czech Republic, speaking on behalf of the European Union, expressed satisfaction with the Conference and its outcome document.  It deeply appreciated the work of the facilitators, as well as the spirit of cooperation exhibited by Member States.  The Conference had been a most important event, which allowed smaller and poorer countries to express their positions.  Further, the United Nations had shown its resolve to act as one.  The ambitious document provided the basis for the Organization to contribute to ongoing discussions on ways out of the crisis and on reforms of the formal global financial architecture.  It also contained substantial steps for follow-up, including, among other things, the establishment of a Panel of Experts.  It further addressed a number of issues that were dealt with in other intergovernmental organization and forums.

He said the European Union would continue to participate in each of those forums, respecting each organization’s mandate.  The current crisis required concerted international action, and the European Union was determined to play a constructive role to that end.  Underlining that the United Nations was “one big family united against adversity”, he said there was no doubt that the path of development would prevail.

Cuba’s representative said that, while his country had joined consensus, it believed the text fell far below the requirements of the most heavily affected nations.  It also included elements that created precedents that could prove dangerous to the United Nations.  The crisis, which began in the main developed countries, was the result of severe systemic problems that went beyond regulatory policy and the financial sector.  Indeed, it demonstrated the failure of the neo-liberal doctrine and of the current financial structure.  It was, Cuba believed, time to pass on to a new paradigm of financial relations.  The outcome document lacked a serious diagnosis of the root causes.  It contained no commitment regarding the provision of new financial resources that were urgently needed by developing countries, nor did it address the existing commitment by developed countries to earmark 0.7 per cent of their GDP for aid, and instead indicated that the developing world was relegated to accepting humiliating alms under conditions.

“We must rethink everything that was created from the Bretton Woods institutions through today”, he said, stressing that the United Nations should play a vital role in that work, which could not be done by closed meetings such as the G-20.  The outcome document did not focus with sufficient depth on the reform of financial institutions, which should be restructured from the bottom up.  In particular, Cuba rejected the mention of the controversial concept of “human security”, which lacked a clear definition and connoted an interventionist tendency.  The document also mentioned the so-called principles of aid effectiveness, which was linked to South-South cooperation.   Cuba did not recognize those principles as mentioned, which it believed were used to deflect attention from the issue of aid commitments from the developed to the developing world.  The solution to the financial, economic, food, energy and climate crises would only be possible if the full participation of all nations was ensured.

The representative of Venezuela, while welcoming the outcome document, said it was important to highlight that it had major deficiencies, such as an insufficient emphasis on the United Nations’ role in the response to the financial crisis.  The reference in paragraph 3 to human security was alarming.  Imperial powers might make the most of that to violate rules governing relations between States concerned.  Regarding paragraph 16, which referred to the Group of 20 summit, he noted that the General Assembly should be responsible for making economic and financial decisions for the peoples of the world.  He observed with concern, in paragraph 22, references to the World Bank, saying that the recipes of the Bretton Woods institutions were responsible for the crisis today.   Venezuela viewed with grave concern the principles of aid effectiveness, stated in paragraph 30.  His country’s activities, through Petro Caribe, for example, were based on solidarity and complimentarity.

Nicaragua’s representative congratulated today’s outcome as an historic milestone for the General Assembly, which had demonstrated it had a central role in shaping a new international order.  The outcome was a compromise text and sent a common message on the global recession.  He reiterated that the financial crisis started just a few blocks away, in the offices of greedy Wall Street bankers.  The effects of the crisis varied, but the texts’ reference to it reflected a call to the developed countries to change their neo-liberal focus.  He rejected the concept of human security linked to the affairs of any State.  Any mention of it in the text reflected the fact that the international order did not provide minimum conditions.  Today, countries had called for a new financial order that did not include a unipolarity of one currency, criminalization of migrants, and one in which finance institutions really worked for peoples’ well-being.  Reforms to the world economic system must have the goal of providing full representation for developing nations.  Bretton Woods institutions were obedient to the United Nations Charter, which included the right to self-determination.  He was pleased to have joined the world’s consensus and asked that the outcome’s agreements be implemented immediately.

The representative of Canada acknowledged the timeliness of the Conference as an opportunity to discuss the risks faced as a result of the crisis.  But, he said he wished to clarify Canada’s stance on several items.  While Canada was “very supportive” of the United Nations’ role in addressing the crisis, he noted that several paragraphs delved into the internal workings of international financial institutions, which had distinct governance structures charged with oversight of their policies.  Canada did not endorse a formal role for the United Nations in the ongoing reforms within those institutions.

Continuing, he said developing countries should take measures to address the acute shortage of reserves.  Balance-of-payment mea

Conference on World Financial

and Economic Crisis

Round Table II (AM)

round table experts outline strategies to help developing countries strengthen
economies, boost financial systems, protect most vulnerable citizens

Panellist, Troubled by Stalled G-20 Initiative,

Cautions against Reading Too Much into ‘Green Shoots’ Recovery Predictions

Calling for vigorous international cooperation to blunt the fallout from the global financial crisis, a panel of senior United Nations officials and Government experts today highlighted strategies –- ranging from a temporary moratorium on debt repayment to increased South-South trade and targeted policymaking -– that could help developing countries strengthen their economies, bolster their financial systems and protect their most vulnerable citizens during the economic downturn.

Opening the second of four round table discussions taking place during the Conference on the World Financial and Economic Crisis and Its Impact on Development, which opened yesterday in New York, Co-Chair Jean Asselborn, Deputy Prime Minister and Minister for Foreign Affairs and Immigration of Luxembourg, said that as the crisis continued to cascade outward from the financial centres that had given it birth, those developing countries that had thought they were too small, too remote or growing too fast to feel the effects were now facing a new reality as their economies contracted and foreign investment dwindled.

He said that, equally troubling and pertinent to the theme of the discussion -- “Coordinated and collaborative actions and appropriate measures to mitigate the impact of the crisis on development” -- was the prediction that poor countries might continue to feel the pinch for some time after the developed world began to recover, especially since they had limited finances to mitigate the effects of the crisis and little capacity to attract investors who could help with infrastructure rehabilitation, technology enhancements or other development priorities.  Stakeholders must therefore consider seriously how broad cooperation could bolster the public good of a renewed international financial system, and determine the most appropriate rules with respect to development.

Besides Co-Chair Tongloun Sisoulit, Deputy Prime Minister and Minister for Foreign Affairs of the Lao People’s Democratic Republic, the panel also included:  Supachai Panitchpakdi, Secretary-General, United Nations Conference on Trade and Development (UNCTAD); Noeleen Heyzer, Executive Secretary, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP); Martin Khor, Executive Director, South Centre; Robert Johnson, former Chief Economist, United States Senate Banking Committee, and former Senior Economist, Senate Budget Committee; and Yaga Venugopal Reddy, former Governor, Reserve Bank of India.

Mr. Supachai said that, as the crisis lingered, UNCTAD was following several troubling trends, chiefly the notion that the recent “green shoots” sparked by minimal signs of life in the economy of the United States were harbingers of a real and sustainable recovery.  That was not the case.  “Just look around.  Look more closely,” he said, emphasizing that a few faintly positive economic reports could not hide the fact that real estate markets were still severely depressed, creditors were still clinging to their cash, and foreign direct investments was dwindling.  So, while the idea of green shoots might be “somewhat good” for consumer confidence, measures to ensure good fiscal management and decision-making must remain in place for some time to come.

He went on to express concern about the status of the $1.1 trillion package agreed by the Group of Twenty (G-20) in London, the bulk of it to be made available through the International Monetary Fund (IMF).  That initiative had stalled and there was a lack of clarity as to how the IMF would actually distribute the funds.  Other trends requiring close attention were the predicted “lag effect” in the global labour markets since job creation was expected to stall through 2010 as nations struggled to “get a handle” on the true impact of the crisis; the rising tide of protectionism; and a real shortage of the resources that had kept countries growing at normal rates of 5 or 6 per cent, and helped them to meet at least some of the Millennium Development Goals.

All those trends pointed to the all-important need to address the debt sustainability of developing countries, he said, calling for cooperation on initiatives on a scale beyond mere restructuring to include a temporary moratorium on debt repayments.  Such a deal had been struck in the aftermath of the devastating Indian Ocean tsunami of 2004 and Hurricane Mitch in 1998.  Moreover, special arrangements must be made for least developed countries, landlocked developing countries and small island developing States, many of which held debt beyond 100 per cent of gross domestic product.

Focusing on the situation in Asia and the Pacific, Ms. Heyzer said the economic and financial crisis threatened to roll back human development gains and spark a human tragedy in the region, which was the most trade-dependent in the world.  Unless immediate measures were taken, some 23 million people stood to lose their jobs in the near future.  Avoiding such a calamity called for the international community to rally its collective strengths so as to stabilize markets and capital flows, halt the decline and initiate broad-based recovery.

Such cooperation was no longer a choice but an imperative, she said, especially since, for the first time, developing countries could not trade their way out of recession because the crisis had started among some of their key trade partners and investors.  The crisis therefore provided an opportunity for countries in the Asia-Pacific and other developing regions to coordinate the creation of more home-grown market initiatives, as well as finance and trade mechanisms.  Indeed, ESCAP was beginning to witness the seeds of a new paradigm that could better address persistent issues specific to developing regions and, hopefully, identify ways to boost domestic demand.

At the same time, she cautioned that lack of social protection was an obstacle for developing regions.  Indeed, only 30 per cent of elderly persons in the Asia-Pacific region had pensions and only 20 per cent of all people had access to health care.  There was also a need for fiscal stimulus policies that would address the needs of women and ensure that recovery efforts were implemented in a sustainable manner, she said, noting specifically on that point, that regional groupings and actors should develop plans with an eye towards ecological preservation and ensuring greener economies.  The Secretary-General’s global “Green New Deal” and ESCAP’s low-carbon Green Growth Initiative provided good starting points to that end.

Calling on developing countries to take advantage of the huge potential of strengthened South-South trade, she said broader recovery efforts should be built on strong regional foundations and be more coordinated and effective in managing risk and identifying volatility.  The crisis was an opportunity to build societies and communities that were better able to withstand shocks.  By taking ownership of their own economic revival, developing regions could make the leap to building a better future for their people and all humanity.

Mr. Khor said the developed world had an international obligation to help people and countries suffering through no fault of their own.  Their recovery should not be debt-based, but grant-based, he said, and new initiatives should be called “compensatory financing”.  With the nearly $2 trillion funding gap the crisis had engendered, external financing could be made available from new Special Drawing Rights that the IMF could issue to developing countries.

While echoing Mr. Supachai’s call for a temporary moratorium on debt repayments, he said also that developing countries should be allowed the policy space to take appropriate measures to address the impact of the crisis.  In the past, such space had been blocked by the loan conditions of the Bretton Woods institutions and other multilateral bodies.  Now that it was clear that some of those very bodies were unable to predict or manage financial shocks, the Conference might recognize the right of developing countries to undertake trade measures within rules of the World Trade Organization to address that issue.

Mr. Khor also stressed that the Conference might consider taking serious action on one of the most important elements of reforming the international financial system -- the long-overdue debt arbitration system.  Pleased that the draft outcome document called for the establishment of a working group that would be tasked with follow-up, he said it would compile the suggestions and recommendations made over the past three days, and hopefully its work could ensure that the United Nations would again be at the centre of economic and financial policymaking.

For his part, Mr. Johnson said that, while many might see the financial meltdown as “just rewards” for the pain inflected on the developing world by certain sectors, the fallout affected all nations and “perhaps vengeance does not have a healthy place” in the discussion.   New York and London, two key centres that had triggered the current turmoil, had played, and would continue to play, important roles in driving the world economy.  Since the financial rebalancing to come would seriously impact spending, job creation, and investment in those two major cities, the effects would certainly be felt elsewhere.  At the same time, rebalancing must be carried out because the legitimacy of the financial intuitions must be restored and because such reform would diminish the extent to which the present type of crisis could impact the rest of the world in the future.

Mr. Reddy urged viewing crisis management in the broader concept of development and identifying areas of convergence, for instance, creating policies that would simultaneously mitigate the impact of the crisis, protect the poor and ensure adequate levels of socio-economic growth.  To the extent that the financial sector would enable the development sector, some harmony must be maintained between the two, he said, adding that actions must also be harmonized among the financial and development sectors and relevant institutions.  There was also a need for coordination and collaboration among countries and regions to ensure policy space so that the long-term impact of the crisis could be addressed, and to stave off such shocks in the future.

During the ensuing brief discussion, several speakers agreed that the financial crisis, with the attendant slowdown of growth in advanced economies, would affect low-income countries in many ways, including through falling remittances, reduced capital flows and reduced demand for their exports.  At the same time, they saw the crisis as an opportunity to explore ways to strengthen South-South regional cooperation and trade agreements.  Other speakers highlighted the need for industrialized nations to uphold their official development assistance commitments and other arrangements agreed by the G-8 (Group of Eight) and the G-20.  They also urged the Conference not to pull back from beginning the discussion on an overhaul of the international financial system.

Participating in the discussion were the representatives of India, Gabon, Bangladesh, Czech Republic (on behalf of the European Union), Republic of Korea, Ghana, Venezuela, Indonesia, Madagascar, United States, Côte d'Ivoire and Congo.

Conference on World Financial

and Economic Crisis

Round Table I (PM)

INTERNATIONAL ECONOMIC REFORM REQUIRES SOME MEMBER STATES TO GIVE UP THEIR ‘VOICE’
IN FAVOUR OF OTHERS, EXPERTS SAY IN ROUND TABLE DISCUSSION

 

Speakers Call for Correction of ‘Glaring’

United Nations Absence from Proposed Responses to Global Economic Crisis

Experts addressing the role of the 192 United Nations Member States in the global economic architecture said today that reforming the financial and economic systems would require some States to give up part of their “voice” so that others could be heard, as Nobel Laureate Joseph Stiglitz asserted that “failure to create adequate institutions for managing globalization has put the global economy at risk”.

The remarks were among the contributions made during a round table discussion on “The role of the United Nations and its Member States in the ongoing international discussions on reforming and strengthening the international financial and economic system and architecture”.  Co-chaired by Prime Ministers David Thompson of Barbados and Prime Minister Mirko Cvetković of Serbia, it was the first of a series taking place as part of the Conference on the World Financial and Economic Crisis, running from 24 to 26 June. (For a summary of today’s plenary, see Press Release DEV/2747.)

Featuring as panellists were Joseph Stiglitz, Professor at Columbia University and Chairman of the Commission of Experts of the President of the General Assembly on Reforms of the International Monetary and Financial System; Ngozi Okonjo-Iweala, Managing Director of the World Bank; Alicia Bárcena, Under-Secretary-General and Executive Secretary of the Economic Commission for Latin America and the Caribbean (ECLAC); Andrei Bougrov, Managing Director and member of the Board of Directors of the Interros Company, former Principal Resident Representative of Russia, Executive Director and member of the Board of Directors, International Bank for Reconstruction and Development; and Yu Yongding, former Director, Institute of World Economics and Politics, Chinese Academy of Social Sciences and former member, Monetary Policy Committee, People’s Bank of China.

Setting the tone for the discussion, Prime Minister Thompson highlighted the effect of the crisis on developing countries, particularly the smallest ones, saying that progress on international objectives such as the Millennium Development Goals was under threat.  The crisis also undermined the ability to tackle climate change, food and energy security, reduce poverty and provide other social needs.  The subsequent growing loss of confidence in international institutions called for reform of the basic financial and economic governance systems and structures.

He recalled that, since the last quarter of 2008, there had been much talk of reforming and strengthening the system -- by the G-8, G-20 and the Boards of Directors of the World Bank and the International Monetary Fund (IMF).  But the absence of the United Nations was a glaring omission, and today’s round table was designed to address the absence of a robust role for the Organization, both in dealing with the short-term requirements and the longer-term needs of structural change.

Mr. Stiglitz, a Nobel Prize-winning economist, said the current crisis had highlighted the ways in which activities in one part of the world could affect other parts.  For instance, the failure on the part of the United States and Europe to regulate their financial institutions in an appropriate way had inflicted costs on their own economies, as well as the global economy.  With economic policies still determined at the national level, the world was now facing the consequences of lacking an overarching institution to manage globalization.

Despite broad agreement on the need for a stimulus package, the absence of coordination meant there was a risk that each country would undertake a stimulus focused on maximizing domestic benefits, he said.  The Commission of Experts felt strongly about the need for an inclusive decision-making process that was “not G‑8, not G‑20 but a G‑192 -- that’s where the United Nations needs to play a central role”.  Its report recommended the creation of a global economic coordinating council to identify gaps in existing economics arrangements and deficiencies in the workings of the current arrangements.

Noting that developing countries lacked the resources to undertake a successful stimulus plan, he said that, while efforts to assist them were commendable, most assistance was offered in the form of credit.  For the least developed countries, that raised concerns of another debt crisis.  That category of countries would require grants in addition to credit.  There was also a need to create new credit facilities and disbursement mechanisms, a matter addressed in the report.

He said the crisis also highlighted the importance of re-examining the economic doctrines upon which those models were based and the basic policy perspectives that had been advocated as a result, such as capital- and financial-market liberalization.  However, there was also a concern that regulatory reforms would not be deep enough, and that the special interests that had once pushed for deregulation would push for only cosmetic reforms.  Already, some countries were advancing the view that some banks were too big for restructuring.

Ms. Okonjo-Iweala said that, as part of the debate on global economic and financial governance, States must consider giving low-income and emerging market countries more of a voice.  Revenue in developing countries had shrunk by $200 billion, and around 95 million people were expected to fall into poverty as a result, in addition to the hundreds of millions more who were already classified as poor.  Core spending on education, health, nutrition and social safety net programmes would not be met.  “What will United States do?  What will China do? What will Europe do?” she asked.

She said the World Bank was watching to see whether the United States would continue to depend on domestic consumer spending to fuel its economy, or whether China would continue its reliance on exports as its economic engine.  The reaction of those economic giants would help the World Bank determine its own next steps.  In the meantime, its President, Robert Zoellick, had called on developed countries to consider devoting 0.7 per cent of their fiscal stimulus packages to the needs of developing countries.

Existing institutions needed recalibrating, and the World Bank had begun doing that by including more African countries on its Board and recalibrating voting rights, she said.  “Institutions need to cultivate the ability to listen more to what they’re trying to tell us about how we should support assistance,” she said, stressing that trying to implement those changes in existing institutions was very important.  For its own part, the World Bank had created a $1.2 billion facility through which it could “fast-track” resources to countries hit by the food and energy crises in recent months.  It had already disbursed $730 million to more than 33 countries, largely in the form of grants.  It was now using those instruments as part of its response to the global crisis.

Ms. Bárcena said news that Member States had agreed on an outcome document was raising expectations about United Nations-led reform, but also questions as to whether the international community would follow suit.  Some countries were wary of overregulation while others feared there would not be enough regulation.  Others still were concerned that certain powerful States would choose to operate outside the multilateral framework.  She stressed that the world financial architecture was part of a larger global structure, and not a building block to be dealt with separately.

“Politics needs to be brought back into the equation,” she said, adding that the United Nations should step in to protect vulnerable economies.  In the poorest parts of the world, when the main breadwinner became unemployed, a family could lose everything, including the ability to keep their children in school and to afford family health care.  Noting that the Commission had proposed the creation of a coordination forum, she said it should be housed within the United Nations.  Similarly, the Commission’s suggestion to establish an international panel of experts could be carried out in the same mould as the Intergovernmental Panel on Climate Change.

A panel of experts within the United would bring together views from all parts of the world, she continued, pointing out that the World Trade Organization, for example, lacked an institutional agreement with the United Nations and needed to be brought into the reform process more formally.  Countries were asking, “What’s going to happen with trade?”, she said, explaining that the Latin American and Caribbean region had suffered a 30 per cent decline in trade.

Mr. Bougrov said that, when the founders of the Bretton Woods institutions had met in 1944, they had been fuelled by a need to undertake post-war reconstruction.  They had also had the will to follow through and enough leadership to pave the way.  Today, the world had the need and the will, but missed the leadership.  Leadership “won’t fall from the sky or come out automatically”, but would originate from having a clear understanding of events and next steps.  The Commission served the purpose of providing that clarity.

As shareholders in bodies such as the World Bank and International Monetary Fund (IMF), Member States must lead the reform process within those international financial institutions.  “When the hurricane took the house, Dorothy said ‘We’re not in Kansas anymore’.  The financial hurricane had a similar impact,” he said.  “In the new conditions, we must aspire to manage risk and allocate capital well.  That’s where we’ve failed so far.”

Mr. Yu, referring back to the Commission’s report, said it represented a comprehensive re-examination and rethinking of the policies and underlying theory currently guiding the world economy.  It emphasized the importance of policy coordination on a global scale, so that the United States -- which had chosen an expansionary policy -- would be forced to consider the consequence of that policy on countries such as China, which held more than $1 trillion in reserves.  If United States policies led to inflation, China stood to suffer greatly as the value of the dollar dropped.  In turn, China would no longer be able to rely on exports to fuel growth, because the world was in an economic recession.

He pointed to the report’s suggestion to rethink the use of the United States dollar as a store of value, especially in light of the increase in the United States national debt, among other things, saying it had led to concerns about the currency’s stability.  Quoting the report, he said now was an ideal time to overcome political resistance to a new global monetary system.  “The report has lots of specific suggestions.  It’s time to carry out the reform of the international financial system.”

Nearly all speakers in the ensuing discussion affirmed the need for change, although some questioned who would do the changing.  They also called for more surveillance of systemically significant institutions, and for more attention to alternative sources of financing, such as Islamic banking or pooled funds, including the Chiang Mai Initiative of the Association of Southeast Asian Nations (ASEAN).

Summing up the discussion, Prime Minister Cvetković said the views aired proved that the United Nations had a role in international financial and economic governance, with many speakers advocating a stronger role for the Organization.  “Every country should be involved in the response.  We need to play catch-up.”

Also participating in the discussion were the representatives of Malaysia, Czech Republic (on behalf of the European Union), Cuba, Venezuela, Democratic Republic of the Congo, Ghana, India, Guyana, Côte d’Ivoire, Saudi Arabia, Sweden, United Republic of Tanzania, Norway, Barbados, Indonesia, United States and China.

Representatives of the World Trade Organization and the United Nations Educational, Scientific and Cultural Organization (UNESCO) also participated, as did several speakers representing non-governmental organizations.

Sixty-third General Assembly

Plenary

102nd Meeting (AM)

GENERAL ASSEMBLY TO ESTABLISH WORKING GROUP TO FOLLOW UP MATTERS DISCUSSED
DURING CONFERENCE ON IMPACT OF WORLD FINANCIAL AND ECONOMIC CRISIS

The General Assembly today decided to establish an ad hoc open-ended working group to follow up on issues described in the outcome document of the conference on the impact of the world financial and economic crisis on development and report to the world body before the end of its sixty-fourth session.

Acting without a vote, the Assembly adopted a text (document A/63/L.77) submitted by its President, Miguel d’Escoto Brockmann ( Nicaragua), which paid due recognition to “the depth of the current financial and economic crisis and the urgency of follow-up action”.

The world body also reaffirmed the notion of a State-driven process to tackle the consequences of the crisis for development.  Formally known as the United Nations Conference on the World Financial and Economic Crisis and Its Impact on Development, the event took place at New York Headquarters in late June.

Following the draft’s adoption, several speakers took the floor.  Canada’s representative, speaking also on behalf of Australia and New Zealand, said he anticipated a State-led process that would engage all Members States, with facilitators playing a helpful role.  He emphasized, however, that before the process could begin States must first define and agree on the scope and organization of work, working methods and composition, as well as a timeline.  Sudan’s delegate, speaking on behalf of the “Group of 77” developing countries and China, said she looked forward to the early appointment of the working group’s co-chairs.

Also touching on those points, Sweden’s representative, speaking on behalf of the European Union, said the co-chairs would be appointed from the membership, and although relevant stakeholders would be part of the discussions, participation in the working group should reflect participation in the Conference itself.  Among other elements needing agreement, was the possible establishment of a “sunset clause”.

However, the representative of Saint Vincent and the Grenadines, aligning himself with a statement made earlier on behalf of the Caribbean Community (CARICOM), said the urgency of the crisis called for the work to start as soon as possible.  The crisis was only just beginning in the developing world, as opposed to some larger countries, where it was coming to an end.  He argued that the contours, mandate and scope of the working group were well-delineated in the consensus outcome document, and there was no need for “a procedural dance” on those issues.

Jamaica’s representative, who spoke on behalf of CARICOM, emphasized that the fall in commodity exports, tourism revenues, remittances and foreign investment, amid rising unemployment, had been so dramatic that several Caribbean countries had been forced to enter into a borrowing relationship with the International Monetary Fund (IMF), or were contemplating one.

He pointed out that small island developing States had no voice in exclusive groups, and thus saw the United Nations as the only forum in which they could engage on matters of such fundamental importance.  Among the issues meriting the working group’s attention were access to concessionary financing and grants for small, highly indebted, vulnerable countries, and the outright provision of resources to the most vulnerable.  Others included the need to level the playing field with respect to the treatment of off-shore jurisdictions, and to strengthen the United Nations Committee of Experts on International Cooperation in Tax Matters, as part of reforming the global economic architecture.  CARICOM suggested that the working group consider the possibility of re-evaluating the criteria for measuring the economic sustainability of middle-income countries.

Egypt’s representative underscored the reason for establishing the working group -- to strengthen the ability of the United Nations to take on the responsibility of addressing the crisis, in terms of both operation and structure.  Those efforts should be coordinated between both developed and developing countries, and in a manner that complemented international efforts in other forums, such as the Group of 20 (G-20), whose membership should be expanded to include more developing countries, especially African countries.  He said he also looked forward to increased coordination between the Group of Eight (G-8) and the United Nations.

Reiterating Egypt’s statement at the Conference, he said it was important to generate more financial resources in the interest of developing countries, in line with previous agreements.  On top of that, new resources were needed to help the developing world address the negative impacts of the crisis.  He also stressed that the economic stimulus packages of the advanced industrial States should not create imbalances in the world economy through new protectionist policies.

Echoing others who spoke today, he called for a review of the governance structures of the World Bank and the International Monetary Fund (IMF), saying their decision-making processes should reflect the role of developing countries in the world economy and their thoughts on conditionality and policy space.  The Joint Coordination Committee of the Non-Aligned Movement and the Group of 77 stood ready to address all those issues.

Closing the meeting, the Assembly President thanked delegations for establishing the open-ended working group, calling it “a matter of technical and practical necessity”.  He said the two co-chairs, one from the North and one from the South, would be announced soon.

Following presentation of the draft resolution, the Assembly Secretary explained that the working group was expected to meet from 24 July 2009 to 13 September 2010, for a total of 16 meetings -- four during the sixty-third session and 12 in the sixty-fourth.  While the exact dates were still to be determined, there was an understanding that no two working groups of the Assembly would meet at the same time.

He explained that a pre-session document and a post-session document, both containing 17 pages of text in all six official languages, would result in additional requirements of $76,000.  However, efforts would be made to absorb those additions into existing budgets.

The General Assembly will meet again at a date and time to be announced.

Conference on World Financial

and Economic Crisis

10th Meeting (PM)

DELEGATES CALLED ON TO TRANSLATE BOLD NEW FRAMEWORK INTO EFFECTIVE ACTION,
AS UNITED NATIONS CONFERENCE ON WORLD FINANCIAL CRISIS CONCLUDES

Hears Final Speakers, after Adopting Outcome Document Friday;

Assembly President Says Historic Text Beginning of Important, Necessary Journey

After five days of debate, the United Nations Conference on the world financial crisis concluded today, with General Assembly President Miguel d’Escoto Brockmann urging delegates to be inspired by the work they had done on the outcome document “and sustain the same sense of urgency and commitment as we translate this bold new framework into effective action”.

In closing remarks today at United Nations Headquarters, Mr. d’Escoto said the Conference on the World Financial and Economic Crisis and Its Impact on Development, which began 24 June, had focused world attention on a crisis that was gripping everyone around the globe and required urgent steps to solve pressing problems and reform outdated institutions.

The Conference, which ended today, had brought together world leaders to assess the worst global economic downturn since the Great Depression and identify emergency and long-term responses to soften its many impacts.  On 26 June, delegates adopted a sweeping outcome document that contained recommendations to fight the recession and establish safer and fairer financial practices.  Among other measures, they called for more resources for social protection, food security and human development, and follow-through on commitments for increased development assistance.

The conference inspired the attendance of 60 Member States at the cabinet level and the participation of more than 170 Member States during the plenary sessions, Mr. d’Escoto said.  He said there was a significant degree of resonance between the many calls and pleas made during the conference and the decisions and recommendations enveloped in the outcome document.  For this and many reasons, the final declaration of the conference met the test of a plan of action suitable for the times.  “It is, in short, a historic landmark –- the beginning, not the end, of an important and necessary journey.”

In a statement made on behalf of Secretary-General Ban Ki-moon, Under-Secretary-General for Economic and Social Affairs Sha Zukang said the Member States had used sheer political will to arrive at a consensus document that he termed a “milestone”.

The global consensus achieved during the conference had helped shape a defined role for the United Nations in dealing with the global financial and economic crisis, he said.  The conference had delivered a powerful message to all countries, and the document would help contain the effects of the financial crisis as it provided a way forward to improve the global economy’s resilience.

A representative of the African Union said no region had been spared the adverse effects of the global financial and economic crisis.  Though the poverty it had sparked was not new to Africa, the current crisis was different from past situations in terms of its source and severity.  She said preventing future crises required concerted efforts at the global level and developed nations had a duty to assist developing nations in the areas of aid, trade and debt relief.

Also speaking today were the representatives of Sweden and the Permanent Observers of the Organisation Internationale de la Francophonie and the Institute for Democracy and Electoral Assistance (IDEA).

Background

The United Nations Conference on the World Financial and Economic Crisis and Its Impact on Development reconvened today to conclude its plenary debate.

Statements

ELIZABETH TANKEU, African Union Commissioner for Trade and Industry, said no region had been spared the adverse effects of the global financial and economic crisis.  The poverty it engendered was not new to Africa, but the current crisis was different from those in the past in terms of source and severity.  In the past, Africa’s development partners had attributed the causes to internal factors -– a lack of good economic and political governance, conflict and political instability.  However, African leaders, within the framework of the African Union and the New Partnership for Africa’s Development (NEPAD), had made tremendous progress towards eliminating those development constraints.  Many had adopted measures aimed at improving governance, and enhancing democracy and the rule of law.

She said preventing future crises required concerted efforts at the global level.  Developed nations had a duty to assist developing nations in the areas of aid, trade and debt relief.  As such, they must deliver on aid commitments; support Africa’s regional integration and economic diversification efforts; allocate part of their stimulus packages to a vulnerability fund to assist African countries in mitigating the social and economic consequences of the crisis; fund the “Aid for Trade” initiative; and give due support to African regional financial institutions, including the African Development Bank.  An early, successful conclusion to the Doha Round of World Trade Organization talks would also help African countries mitigate the impacts.  Finally, she said a fundamental change in the financial governance architecture was needed and the shortcomings of global markets had to be addressed.  She hoped that the Conference’s outcome and follow-up processes would meet expectations.

ANDERS LIDÉN ( Sweden) said that the order of the day was to determine how to go through the current economic crisis while safeguarding the progress made towards poverty reduction and creating conditions for renewed growth and progress.  Following its assumption of the European Union (EU) Presidency tomorrow, managing the economic and financial crisis would be one of its two priorities, the other being climate change.  Sweden was supporting national efforts in response to the crisis, and its official development assistance (ODA) was exceeding the internationally agreed target of 0.7 per cent of gross national income.  It was now essential that all donors delivered on their international official development assistance commitments.  In November, European Union Development Ministers would review progress in that regard.

It was equally important to make development cooperation more effective, he continued.  The most vulnerable groups must be protected.  The private sector and infrastructure investment also must be sustained.  It was necessary to continue efforts on an ambitious, action- and results-oriented response to the Paris Declaration and the Accra Agenda for Action.  Securing agreement to a European Union operational framework for that very purpose would be a key aspiration for the Swedish European Union Presidency.

Continuing, he highlighted the need to refrain from protectionist measures and work towards an inclusive globalization and an open world economy.  The European Union had an important role to play in that regard.  The European Union was, and should remain, at the forefront, promoting free trade and increased market access for developing countries.  The Union had also adopted a coordinated strategy to support the financial sector in stabilizing markets.  A few days ago, the European Union Heads of State and Government had concluded that, although that strategy had been effective, Governments still needed to stay alert for possible further measures.

During its Presidency, Sweden would make further efforts to strengthen the European Union agenda on policy coherence and development, he added.  His Government also intended to provide a supplementary contribution of some $92 million to the International Development Association of the World Bank; provide about $13 million to counter the effects of high and volatile food prices; increase its support for trade and microfinance in the poorest countries; and make a special provision for nutrition and social protection for the most vulnerable.  Sweden had also allocated funds to improve maternal health through promoting sexual and reproductive health and rights.  A Swedish risk capital company had been given a grant to support private sector investments in developing countries.  His Government was also setting up a high-level advisory council with the private sector to make better use of the experience of Swedish enterprises in developing countries.

MASSIMO TOMMASOLI, observer of the Institute for Democracy and Electoral Assistance, said 15 September 2008 marked the first-ever celebration of the United Nations International Democracy Day and the collapse of the Lehman Brothers investment bank, which sparked the beginning of the worst financial crisis since the Great Depression.  Notwithstanding, the crisis provided an opportunity for reform.  But, any reform would depend on the quality of the political institutions and how deep the democratic practice and culture had permeated a given country or region.

The gender dimension of the crisis, which was global and systemic, had to be addressed, as women made up the majority of the poor, he said.  When democratic public spaces were weak, their weakness contributed to fuelling a financial crisis by the absence of transparency and accountability.  On the other hand, because of that weakness, the most vulnerable population, including the unemployed, did not have a voice when the impact of the economic crisis was unequally shared within the society.

Nations with a weak democratic tradition may face setbacks, such as anti-immigration sentiment and nationalism and political tensions and challenges, he said.  The institute believed that international efforts at monitoring the global impact of the crisis should also take into account its democracy-building dimensions and policy implications, in order to provide analysis for use by partners and policy makers.

MOUSSA MAKAN CAMARA, a Permanent Observer for the Organisation Internationale de la Francophonie, said that his organization had been among the first ones to elaborate recommendations on the scale of the problem and draw attention to the need for concerted action.  Heads of State and Government sharing the French language had reaffirmed their commitment to solidarity, which was at the heart of Francophonie.  They had also reaffirmed that cooperation continued to be the basis for good functioning of financial markets and called for coordinated intervention to make the international financial system more coherent.  In the Declaration of Quebec, which was adopted in October 2008, they had called for a summit on the financial crisis.  The President of France was then mandated by his peers to bring that message to the G-20 meeting in Washington, D.C., in November.

He said that, on the eve of the G-20 meeting in London in April 2009, the Secretary-General of Francophonie and his counterpart of the Commonwealth had released a joint communiqué calling for wider dialogue to ensure that solutions proposed benefited the large and the small, the richest and the poorest.  The Secretaries-General had called for concerted solutions, based on solidarity.  It was in that spirit that the Secretariat of the Commonwealth and Francophonie had organized, in April, on the margins of the General Assembly of the World Bank and International Monetary Fund, a ministerial meeting on viability of debt.  The Ministers of Finance of the Francophonie and the Commonwealth had then circulated a ministerial declaration on that matter.

The summit in Quebec, two G-20 meetings, and other international and regional events had demonstrated that the States were conscious of the need to act in solidarity in the search for solutions to the financial crisis, he continued.  Solutions proposed had shown that no measure was enough in itself and that not all measures were needed in all countries.  It was necessary to ensure a reasonable balance between short and long-term goals in the search for stability and development.  Agriculture had to be relaunched, and the goals of food sovereignty needed to be met.  It was also important to rethink the development goals for the least developed countries and resume Doha negotiations, to reduce dependence on traditional markets.  All of that was true, but an increased impetus was also required on implementation. The crisis offered an opportunity for that.  The General Assembly was in a position to place the countries experiencing difficulties at the centre of the efforts to address the crisis.

The Assembly then adopted “Credentials of representatives to the Conference on the World Financial and Economic Crisis and Its Impact of Development” (A/CONF.214/6) as contained in paragraph 13 of the Report of the Credentials Committee.

The Assembly also adopted the draft report of the Conference (A/CONF.214/8), as introduced by Rapporteur Maged Abdelaziz ( Egypt).

In a statement made on behalf of Secretary-General BAN KI-MOON, the Under-Secretary-General for Economic and Social Affairs, SHA ZUKANG, gave his support for the Conference and the outcome document, in which the Member States used sheer political will to arrive at a consensus outcome.  He said the document was a milestone achieved by all Member States to address the impact of the financial crisis.

This global consensus helped shape a defined role for the United Nations.  It aimed to make the stimulus and other recovery efforts work for everybody.  It would help contain the effect of the crisis, improve the economy’s resilience, and reform the international financial and economic architecture.  The outcome document should help provide more balance and sustained economic development as it helped overcome poverty and inequality, he said.  The conference would send a powerful message to all countries, rich and poor.  The way forward of the outcome document provided a new mandate for intergovernmental bodies, including the General Assembly and Economic and Social Council (ECOSOC).  On behalf of the Secretariat, he pledged his full support to those endeavours.

General Assembly President MIGUEL D’ESCOTO BROCKMANN again labelled the conference an historic one that had given the world an opportunity to hear the voices of the “G-192” on the financial crisis.  The outcome document adopted by consensus on 26 June was the first step in a long process of putting the world on a path of solidarity, stability and sustainability.

He said the Conference had focused on a crisis that was gripping the world and needed urgent steps to solve the problems and reform institutions.  The many Heads of States and Government, ministers and representatives assembled at the Conference repeatedly expressed the conviction that the world’s economic problems could not be solved without dealing with the broader issues of global governance and the sustainability of “our dear Mother Earth”.  He said he considered the package of decisions and recommendations of the outcome document, under the heading “The Way Forward”, to be pivotal and carefully balanced.  They were also time sensitive and required the coordination and cooperation of several institutions.  These included the General Assembly, the United Nations Development System, the President of the General Assembly and the Secretary-General.  He intended to soon begin a process of consultations with these bodies, including the President-elect of the Assembly’s sixty-fourth session.

He said the convening of the Conference within seven months of the decision taken in Doha inspired the attendance of 60 Member States at the cabinet level and the participation of more than 170 Member States in the plenary sessions.  He said the Conference represented the first global meeting on the crisis to bring together the “G-192” and key representatives of the civil society, the private sectors and members of the United Nations system.  The Assembly heard consensus on an ambitious outcome document that included common understanding on the causes and impact of the crisis, the need for urgent action to increase official development assistance and speed up its delivery, the need to deal with debt and global liquidity, and the need for reform of the international financial and economic system and architecture for improved regulation and monitoring.

The final outcome was a plan of action appropriate to the times, he said.  “It is, in short, a historic landmark –- the beginning, not the end, of an important and necessary journey.”

“So let us be inspired by this work and sustain the same sense of urgency and commitment as we translate this bold new framework into effective action,” he said.  “We quite solemnly and gladly assume these responsibilities and obligations.”

He then concluded the conference.

Conference on World Financial

and Economic Crisis

Round Table IV (AM)

‘BUSINESS AS USUAL’ NOT ENOUGH TO MAINTAIN TRACTION IN DEVELOPMENT EFFORT
DURING FINANCIAL CRISIS, SAY UN OFFICIALS IN ROUND TABLE DISCUSSION

Asking the donor community to keep funds flowing, top officials from United Nations agencies, speaking at a round table discussion this morning on the Organization’s development response to the crisis, warned that business as usual would not be enough to maintain traction on development.

Gathered at a round table on the final day of the Conference on the world financial crisis, they suggested that hard data would become increasingly important in coming years to better target United Nations programmes towards recipients, as social safety nets were in danger of disappearing in many nations as a result of the world financial and economic crisis.

Hilde F. Johnson, Deputy Executive Director of the United Nations Children’s Fund (UNICEF), one of five panellists offering an overview of contributions of the United Nations development system in response to the crisis, told participants “we need to know more”, and that it was time to improve a policy response that, so far, had been based on past experience, anecdotal evidence or fragmented information.

Speaking alongside Ms. Johnson were Helen Clark, Administrator of the United Nations Development Programme (UNDP); Thoraya Obaid, Executive Director of the United Nations Population Fund; Manuel Aranda da Silva, Deputy Executive Director a.i. of the World Food Programme (WFP); and Pedro Páez, former Minister for Economic Coordination of Ecuador, and member of the Commission of Experts of the President of the General Assembly.

Ralph E. Gonsalves, Prime Minister of St. Vincent and the Grenadines, chaired the meeting jointly with Dipu Moni, Minister for Foreign Affairs of Bangladesh.

Opening the discussion, Prime Minister Gonsalves said the development function of the United Nations fell mainly to its Economic and Social Council.  Over the years, a number of funds, programmes and agencies were established through intergovernmental agreements to enhance its capacity, thus fulfilling the United Nations mandate to solve “international problems of an economic, social, cultural, or humanitarian character” and to become “a centre for harmonizing action of nations”.

In time, many of those organs had expanded and began operating like independent principalities, he said, introducing complexities that required more coordination than before.  In response, world leaders at the 2005 World Summit had proposed that the United Nations, and its Economic and Social Council, be strengthened. 

Beginning in 2006, the General Assembly resolved to enhance system-wide coherence, an effort that Mr. Gonsalves said was still in the experimental stage and limited to the United Nations.  “There is need to speed up implementation and extend coverage,” he said.

Reporting on the response by the United Nations development family to the crisis, Miss Clark, head of the United Nations Development Programme, explained that the Chief Executives Board for Coordination (CEB) –- which brought together the executive heads of United Nations funds, agencies and programmes ‑‑ had prepared a joint response to the crisis, under which UNDP and the World Bank would be tasked with developing a response mechanism to the crisis’s human dimension. 

Those organizations had decided also that the response in each country would be driven by local needs, she said.  The UNDP was already helping the Government of Mauritius prepare a stimulus package, among other things.  It was involved in developing an alert system to track the impact of shrinking funds on the most vulnerable people, with a report to be published in September.

She added that UNDP was bringing climate change into the core of its thinking on poverty and development, and was hoping for an outcome in Copenhagen that would place the world on a sustainable path out of poverty.  A new climate change financing mechanism could have a very significant impact on development, she said, suggesting that development could be viewed in new and innovative ways.

Ms. Obaid, head of UNFPA, said a large number of those at risk of being pushed into poverty would be women.  The World Bank had predicted that their impoverishment would lead to an increase in infant and maternal death, a rise in female drop-out rates and more violence against women.  The international community must do something to prevent a “collapse in human development”, and to protect its investments towards the advancement of women and girls’ well-being. Data showed that even a 10 per cent shortfall could result in 1.8 million unsafe abortions and 19,000 maternal deaths.

The UNFPA would continue to advocate for increased investment in health under the leadership of the World Health Organization, she said.  It would work with Governments to ensure that Millennium Development Goal 5 ‑‑ improving maternal health ‑‑ remained an essential component of Government plans and budgets.  The Agency’s total package for sex and reproductive health services amounted to $23 billion in 2009, and was likely to peak at $33.3 billion in 2014. 

She noted that there was a temptation to cut public services in times of crisis.  But, Governments should learn to see that investment in maternal health could advance other international goals, sometimes in unforeseen ways.  For instance, given that around 80 per cent of the crops in Africa were grown by women, and 90 per cent of rice farmers in Asia were women, $6 billion in health services could save women’s lives and increase national productivity.

She said the World Health Organization and UNFPA were also involved in national health planning and budgeting.  “People everywhere are looking to leaders to put people first,” she said, adding that ways must be found to include civil society in the conversation, and within that, the voices of women and girls.

Mr. da Silva, whose focus was hunger, said the cost of the staple food basket was 20 per cent more expensive in the first quarter of 2009 than the 5-year average in three quarters of the countries where those prices were monitored.  A vast majority of people had no food safety net, and in tough times people just don’t eat, he said. 

“Vulnerable households are taking children out of school, reducing expenditures on health and eating less and eating less well,” he explained.  Even a few months of inadequate food and nutrition could condemn a person and a full generation in a country, for life.

Speaking as ad interim deputy chief, he said WFP hoped to expand its programme to newly vulnerable households, through school feeding programmes, mother-and-child health and nutrition programmes, cash transfers and food vouchers, and local food purchases.  But, out of a budget of $6.4 billion for 2009, only $1.5 billion had been received, forcing WFP to prioritize amongst its goals.  “With increased need coming from conflicts, this prioritization is going to become extremely, extremely difficult,” he said, explaining that it would be a painful choice between whether children should die in Sudan, or in Somalia, or Ethiopia.

Ms. Johnson, Deputy Executive Director of UNICEF, said the poorest countries were already taking a hard hit from the crisis.  For instance, in the Democratic Republic of the Congo, the Government had estimated a drop of 70 per cent in revenue, requiring a complete readjustment to their budget.  It would result in more hunger, more disease, and less education and more child labour ‑‑ and often girls left school first. 

She said acute malnutrition was on the rise in many countries, including Afghanistan and the Central African Republic.  In Bangladesh, children were increasingly being put to work, taken out of school to gather vegetables for resale.  The financial crisis came on top of the food crisis, and now “they should not take a triple hit, with development assistance being cut by rich countries”.

United Nations agencies had discussed a country crisis response mechanism, she said, where the United Nations country teams would occupy the same table as international financial institutions.  She said, now, the various entities would have to agree on who would do what and how.  For its part, UNICEF planned to study 44 pilot programmes that delivered social protection services, with the goal of scaling up 18 of those programmes in response to the crisis. 

So far, she said the Agency had based its policy responses on past experiences, anecdotal evidence or fragmented information.  It was now beginning to use satellite monitoring to bolster its projects.  “We need to know more.” 

A fifth panellist and a member of the Commission of Experts, Mr. Páez warned against those with a “vested interest in lowering the profile of [the Conference],” and harked back to the General Assembly President’s call for the United Nations to unite in the face of crisis.

“Some criticize the United Nations for lack of expertise,” he said, before pointing out that the President of the General Assembly had created a Commission of Experts, which was loosely modelled on the Intergovernmental Panel of Climate Change that brought government and academia together to create an informed response to a complex crisis. 

“We have to set up solutions in terms of strategic changes, not palliatives,” he said, adding that events like this could make a breakthrough possible.  But, he pointed out that without a proper mechanism to follow up on the outcome of the Conference, everything could be diluted and the opportunity to set up conditions for a bright future for humanity “could be lost for a long time”.

Following the comments by panellists, the representatives of Barbados, China, Bangladesh, India, Czech Republic (speaking on behalf of the European Union), Benin, Australia, Indonesia, United States, Côte d'Ivoire, Ghana, Sweden and Japan also made comments.

Many voiced encouragement for the ideas being explored by United Nations entities and asked that they report periodically to Member States on progress.  They also asked those entities to advocate on behalf of Member States to ensure that disbursement mechanisms used by financial institutions were fair, transparent and devoid of strict conditionalities.  The representative of Benin went further, saying there was a “values crisis” and that there was a need to review the principles on which development was based.

The representatives of several developing countries said their countries wanted financing to support their budgets, and, in the words of the representative of Barbados, asked that budget support not be “clogged” with unnecessary conditionalities.  The representative of Bangladesh suggested that United Nations agencies exercise as much flexibility as possible when working with individual Governments, and they not dismiss national programmes outright because of a few details. 

Delegates also asked questions of each other, with representatives of developing countries asking developed nations whether they would be willing to provide aid, when many rich countries were running high budget deficits.  In some countries, the legislature was working to limit the budget deficit to no more than 3 per cent of gross domestic product.  In the course of that discussion, the representative of Sweden announced that her Government would contribute $10 million to UNICEF in support of the crisis.

Officials from the Joint United Nations Programme on HIV/AIDS (UNAIDS), United Nations Environment Programme (UNEP), World Intellectual Property Organization (WIPO), and the International Telecommunications Union (ITU) also spoke.

The representatives of a few civil society organizations also participated, with one speaker saying there was outrage within civil society at attempts to block change and return as quickly as possible to business as usual.  “Even as you work indefatigably on an urgent task, you need support to resist attempts at reform of institutions of governance.”

Conference on World Financial

and Economic Crisis

Round Table III (PM)

round table panellists stress need for multifaceted approach in designing
response to multidimensional global economic downturn

 

Experts Highlight Importance of Addressing Human Rights, Decent Jobs, Trade

As it wrestled to design a response to the multidimensional and unprecedented global economic downturn, a panel of United Nations and financial experts from several intergovernmental organizations stressed today that, in order to be successful, the world community would have to employ a multifaceted approach addressing employment, trade, investment and development.

Opening the third of four round tables being held as part of the three-day Conference on the World Financial and Economic Crisis and its Impact on Development, Co-Chair Diego Borja, Ecuador’s Minister for Coordination of Economic Policy, highlighted trade and development as two channels through which the economic contagion had passed from the developed world to the developing countries.  Serious repercussions were already visible as declining trade pushed up unemployment and growing financing shortages prevented infrastructure expansion.  Average per capita gross domestic product in the developing world was expected to drop precipitously from over 4 per cent to zero.

To tackle the theme of the discussion -- “Present and future impacts of the crisis on, inter alia, employment, trade, investment and development, including the achievement of the internationally agreed development goals and the Millennium Development Goals” -- he urged participants to envision the still-unseen impacts of the crisis, particularly as they might unfold across income groups and regions.  It was also pertinent to ask whether the Millennium Development Goals, which read more than ever like a list of urgent development needs, would still be feasible and affordable.  The question of how fiscal stimulus packages would allow for economic growth in the developing world was also critical.

In addition to Co-Chair Bert Koenders, Minister for Development of the Netherlands, the panel featured:  Navanethem Pillay, United Nations High Commissioner for Human Rights; Sha Zukang, Under-Secretary-General for Economic and Social Affairs; Abdoulie Janneh, Executive Secretary of the Economic Commission for Africa (UNECA); Valentine Rugwabiza, Deputy Director-General of the World Trade Organization; Stephen Pursey, Director, Policy Integration Department, International Labour Organization (ILO); and François Houtart, Emeritus Professor, Catholic University of Louvain (Belgium) and founder of the Tricontinental Centre (New Louvain).

Ms. Pillay said the rapid deterioration of livelihoods among both rural and urban poor families was not only a crisis of development but one of human rights.  Coupled with food and fuel price shocks, rising unemployment presented fundamental challenges to social welfare.  Already at the margins of stable employment, women, children and migrant workers were losing jobs at higher rates, disproportionately jeopardizing their economic and social rights.  In such a climate, they were forced to accept increasingly marginal and dangerous employment.  Women often ate last and least, while girl children were the first to be withdrawn from school.

Underlining the value that a human rights perspective could bring to national and international responses by bringing to light discrimination based on gender, ethnicity and nationality, she said States that did not address the current crisis by levelling the playing field were unjust.  A human rights approach envisaged the participation of the most affected people.  It also enhanced accountability, transparency and responsibility within development mechanisms.  As such, all development partners should promote human rights, equity and social inclusion while integrating human rights into their programmes.  Moreover, the ongoing reflection on the causes of the economic crisis should be seen as an opportunity to rectify the system that had triggered the downturn.

Expanding on those triggers, Under-Secretary-General Sha said the crisis was the result of regulatory failure in developed countries as well as a breakdown in the international financial architecture.  Regrettably, developing countries would continue to be battered by, among other things, high costs of borrowing, a sharp contraction in global trade, declining remittances and falling official development assistance.  Average per capita growth was expected to dwindle to zero in the developing countries, with the sharpest contractions in sub-Saharan Africa and South Asia, where millions of people had already been pushed into poverty.  Shrinking governmental fiscal capacity had reduced investment in infrastructure and eroded capacity for climate change mitigation and adaptation.

The only solution to that dire situation was to respond in a way that put the world on a more sustainable growth path, he said.  A coherent approach was required, and immediate actions should include more stimulus plans designed to work for all.  Unfortunately, more than 80 per cent of the current stimulus programmes were targeted at developed countries.  An extra $500 billion would be needed for developing countries in 2009 and 2010.  There was also a need for a temporary moratorium for countries in severe financial distress, to restore access to trade financing and to meet aid and other commitments.  Limits to migration and restrictions on migrant workers should be avoided.  Even if indications of a nascent recovery proved true, risk remained very high.  “The challenges we face are real, they are serious and they are interconnected, and they will not be overcome in a short amount of time.”

Mr. Janneh, outlining the damage that the global recession had inflicted in Africa, said that any initial sense that its effects would be limited by the continent’s relative isolation had proved utterly false.  Broad damage was now visible across multiple sectors, and economic growth rates were forecast to fall from 6 per cent to 2 per cent.  Specifically, the crisis was negatively affecting African trade, with export levels having retreated significantly, particularly in such commodities as oil and diamonds.  Unless improvements were seen soon, African countries would be tempted to adopt protectionist policies.

The crisis had changed the way in which the world thought about development, he said, adding that many experts, recognizing that developing countries needed counter-cyclical policies, had declared the Washington Consensus dead.  For their part, African countries had taken steps to mitigate the crisis, while also maintaining their commitment to macroeconomic stability.  Like all developing countries, however, they would continue to need the international community’s support.  To that end, proposals made at the London Group of Twenty (G-20) meeting were promising, but the remaining challenge was implementing those commitments in such a way that they reached their intended beneficiaries.

Ms. Rugwabiza, expanding on the trade dimension, emphasized its predicament as a victim of the economic crisis.  Forecasts put the contraction in trade at 10 per cent and suggested that the beginning of a recovery was not yet in sight.  That would have severe consequences for developing countries, which depended on trade to a higher degree than did developed nations, and would continue to do so.  Those circumstances clearly illustrated the interconnected nature of economies as well as the fact that globalization was much more advanced than previously thought.  They also suggested a need for more regulation in the multilateral rules governing trade.

As the world community weighed possible ways for trade to reprise its role as a driver of economic growth, national stimulus plans could do some good, but they were not enough, she said, emphasizing that stability and confidence must also be re-injected into the global economy.  One way to do that was by establishing relevant global trade rules and particularly by concluding the Doha Round of trade negotiations.  That would require leadership, and the urgency was obvious:  trade was falling for the first time in more than 65 years.  Further financing would also be needed, and, while the G-20’s decision to inject billions into the global economy was a step in the right direction, other obligations must be met.  That was especially true since those commitments were, in some cases, the only outlay for infrastructure development in developing countries.

Mr. Pursey, noting the acute social implications of prolonged distress in labour markets, highlighted the need to incorporate a decent work framework into recovery schemes.  To that end, ILO had outlined five different scenarios for job growth depending on growth in output.  They showed that while the possible scale and duration of global labour market distress could vary, job losses were certain -– making it essential to increase social protection.

He stressed that the creation of decent jobs should not just be a hopeful outcome, but an essential ingredient for global economic recovery.  Using policies that had worked in the past and applying them to the current challenges, ILO was calling for a Global Jobs Pact that would accelerate employment creation, recover jobs and sustain enterprise.  It would also invest in employment-intensive infrastructure, including green jobs; prepare women and men for the new skills that would be needed in a future, recovered world economy; and establish a floor for social protection.

Mr. Houtart said it was no coincidence that the economic crisis had converged with others, such as the food and fuel crises, noting that the uncontrolled development of capital had aggravated financial imbalances.  The food prices shocks of 2008 suggested the dangers of commodifying foodstuffs, while the energy crisis had roots in speculative practices.

Just as a new set of rules had been created by the New Deal following the Great Depression, he said, so the Commission of Experts appointed by the President of the General Assembly had proposed measures to allow the financial and monetary system to function anew.  But the question should be asked:  would they would be applied with the same logic that had led to the present situation.  Indeed, would they allow the extension of monocultures and lead to a familiar, albeit greener, automobile industry?  Would a restored financial system be based again on unequal growth, or would it challenge the previous iteration’s main philosophy?

Suggesting that new paradigms were needed, he said the Conference was only one early step towards establishing them.  Moreover, an effective global response to the crisis was not merely a matter of being against the market or anti-trade.  In order to succeed, more reality and less dogma would be required.  Indeed, free trade would be excellent if all countries were equal; it could best be described today as “sharks versus sardines”, he said, adding, “We not only need regulations, but alternatives.  We need another definition of growth, of prosperity and of civilization.”

The ensuing discussion touched on questions ranging from how the flexibility of the current system could be harnessed to effect change, to how to increase financing for African countries -– possibly through some forms of insurance –- to thus allow them to participate in different world markets, how the credit squeeze affected microfinance, and how to address more effectively the consequences for women, among other questions.

Some speakers underlined the tension between the past success of market-oriented growth strategies and the current catastrophe, frequently attributing it to unbridled faith in the “wisdom” of free markets.  Others warned that the United Nations still lacked the political will to break with an outdated and inequitable financial system and embrace one that fostered development.

Summing up the debate, Mr. Koenders said Wall Street might be rallying, but the world was still reeling.  For the first time in many years, North and South had the opportunity to work together.  While they might differ on certain parts of the draft Conference outcome document, it presented a menu of immediate and critical actions upon which a significant number of countries could agree.  Moving forward, employment should be a key focus of the response.  Clearly no one was happy with falling trade, and the process of opening markets remained “front and centre” in the ongoing response.

Also participating in the discussion were the representatives of Indonesia, Gabon, Ethiopia, Guatemala, Côte d’Ivoire, United States, India, China, Czech Republic (on behalf of the European Union), Italy, Benin and Turkey.

The Permanent Observer Mission of the Holy See also participated.

A representative of the International Organization for Migration also spoke, as did speakers representing civil society, women and non-governmental organizations.