24/06/2004
Press Release
ECOSOC/6115



Background Release                                         


Economic and Social Council to hold annual session in new york, 28 june – 23 july


High-Level Segment to Focus on Resource Mobilization for Poverty

Eradication, Including Promoting Investment in Least Developed Countries


The 2004 substantive session of the Economic and Social Council (ECOSOC), scheduled from 28 June through 23 July, will open with a high-level policy dialogue on current developments in the world economy and international economic cooperation, featuring a keynote address by Mathieu Kérékou, President of Benin, after opening remarks by Secretary-General Kofi Annan.


The policy dialogue -- with Rubens Ricupero, Secretary-General of the United Nations Conference on Trade and Development (UNCTAD); Juan Somavia, Director-General of the International Labour Organization (ILO); and representatives of the World Bank, the International Monetary fund (IMF) and the World Trade Organization (WTO) -- is part of a three-day high-level segment on the theme:  “Resources mobilization and enabling environment for poverty eradication in the context of the implementation of the Programme of Action for the Least Developed Countries for the Decade 2001-2010”.


Adopted in May 2001 in Brussels, Belgium, the Programme of Action, a set of key commitments for implementing the Millennium Development Goals, includes seven specific commitments made by the least developed countries (LDCs) and their development partners, including mobilization of financial resources, as well as governance, trade and sustainable development.


The Council’s opening day on 28 June will also feature an “Investment Promotion Forum”.  After statements by José Antonio Ocampo, Under-Secretary-General for Economic and Social Affairs, and Anwarul K. Chowdhury, Under-Secretary-General and High Representative for the Least Developed Countries, Landlocked Developing Countries and Small Island Developing States, the ECOSOC will break up into five round tables on the themes:  “Local private sector development:  the role of microfinance/microcredit”; “Attracting foreign direct investment in LDCs”; “The role of trade preferences for LDCs in promoting investment”; “The role of partnerships in mobilizing resources for LDCs”; and “Investment in urban water, sanitation and sustainable human settlements development in LDCs”.


Between the morning and afternoon events, civil society representatives will address the Council in a non-governmental organization panel, organized by LDC Watch.


Tuesday, 29 June and Wednesday, 30 June will be devoted to a general debate on the high-level segment theme with statements by ministers and high officials.  It is expected that the high-level segment will conclude on 30 June with the adoption of a ministerial declaration.


Substantive Session


The 2004 substantive session will continue with a Coordination Segment (1 to 7 July), an operational activities segment (7 to 12 July), a humanitarian segment (12 to 14 July), and a general segment (15 to 22 July).  The Council will conclude its work on Friday, 23 July, with action on all outstanding proposals.


The coordination segment will focus on two themes:  “Coordinated and integrated United Nations system approach to promote rural development in developing countries, with due consideration to LDCs, for poverty eradication and sustainable development”; and “Review and appraisal of the system-wide implementation of the Council’s agreed conclusions 1997/2 on mainstreaming the gender perspective into all policies and programmes in the United Nations system”.  Several panel discussions and round tables will explore those two themes.


The operational activities segment will focus on the operational activities of the United Nations for international development cooperation, and will, among other things, consider the Secretary-General’s report on the triennial comprehensive policy review of operational activities for development of the United Nations system.


The humanitarian segment will be dedicated to special economic, humanitarian and disaster relief assistance, and also includes a panel discussion on field-level coordination for the purpose of continuing the presence and operations of United Nations humanitarian assistance missions in higher-risk environments.


Finally, the general segment will, among other issues, address:  implementation of, and follow-up to, major United Nations conferences and summits; economic and environmental questions; social and human rights questions; regional cooperation; and economic and social repercussions of the Israeli occupation on the living conditions of the Palestinian people in the occupied Palestinian territory, including Jerusalem, and the Arab population in the occupied Syrian Golan.


Reports


The High-level segment will consider a report of the Secretary-General on resources mobilization and enabling environment for poverty eradication in the context of the implementation of the Programme of Action for the Least Developed Countries for the Decade 2001-2010 (document E/2004/54).  The report addresses the question of resource mobilization -- which is central to the efforts to fight generalized poverty in the world’s 50 least developed countries (LDCs) -– in the context of the Brussels Programme of Action.  It analyses the challenges and prospects of resources mobilization, the creating of an enabling environment and the role of partnerships for the implementation of the Programme of Action.


As LDCs face numerous challenges in mobilizing resources for poverty eradication, the report lists a number of issues that require particularly urgent attention.  Creating an enabling environment is necessary in order to unleash the domestic potential of LDCs for investment and sustained growth.  Official development assistance (ODA) is required as a necessary first step to help build the conditions from which increased economic activity can take off.  Official development assistance should be provided in the form of grants so that the debt burden does not increase.


The international community should reinforce its commitment to create a global policy framework that helps in generating resources, the report states.  All policies and decisions should be made within a coherent framework of mutually supportive objectives, so that ODA does not become a dependency; debt-service agreements are sustainable; commodity’s prices are more stable; and exports are not hindered by trade barriers and high subsidies, particularly in developed countries.  Also, partnerships, including public-private partnerships, must be promoted at all levels in order to support LDC efforts to generate resources.


Special provisions should be made for those LDCs that are in conflict situations or are emerging from one, according to the report, as 80 per cent of the world’s 20 poorest countries have suffered a major civil war in the past 15 years.  Such instability is a major obstacle to attracting investors.  At the same time, the lack of access to resources can undermine the basic mechanisms of governance and contribute to political disintegration and open social conflicts.


The report recommends that LDCs should, among other things, mainstream the objectives and priorities of internationally agreed targets, and should enhance the dialogue between national governments and other development partners.


It is also recommended that LDCs improve the efficiency and transparency of domestic administration and public spending, increase accountability, promote effective governance and the rule of law, and invest in education and health sectors.  They should also promote guaranteed property rights through the creation of formal property systems for the poor and the landless, and expand and deepen financial intermediation systems, especially microfinance institutions.  Avenues for expanding the share of domestic revenue derived from direct taxation of income and profit should be explored, together with the harmonization and modernization of the tax-collection system.


The report recommends that the international community should, among other things, urge donor countries to increase ODA flows to LDCs to the level of 0.2 per cent of their gross national product (GNP) and emphasize that ODA to all LDCs be given in the form of grants and with minimal conditionalities.


It was also recommended that the international community accelerate implementation of the Heavily Indebted Poor Countries (HIPC) Initiative for eligible LDCs and reduce or cancel all multilateral and bilateral debt.  The international community should also ensure that economic shocks and commodities-related uncertainties are more realistically factored into HIPC projections.


All countries should be called upon to provide free market access to the exports of LDCs and improve the implementation of market access preferential schemes like the “Everything but Arms” initiative [European Union] and the “Africa Growth and Opportunity Act” [United States].  Subsidies and other protectionist measures in developed countries should be eliminated, according to the report, and trade development of LDCs should be promoted through a set of special and differential treatment measures that are more contractual, operational and predictable.


South-South cooperation in expanding trade opportunities, capacity-building and debt relief should be explored, and more and better partnerships should be developed between governments, multilateral institutions, the private sector and civil society, with special focus on resource mobilization and technology transfer.


The high-level segment will also consider the first chapter of the World Economic and Social Survey, 2004.  The World Economic and Social Survey is the United Nations’ annual analysis of current developments in the world economy and emerging policy issues.  It contains the Secretariat’s forecast of short-term global and regional economic trends, reviews major developments in international trade and discusses the net transfer of financial resources of developing countries.


According to the Survey, growth prospects for the world economy have improved conspicuously in 2004, but the strength of the world economy remains largely cyclical in nature, and the accelerating phase of the expansion is expected to end in the second half of 2004.  The key challenge for policymakers worldwide is, therefore, how to transform the strong cyclical upturn into sustained robust lost-term growth.


The economy of the United States is expanding apace, the Survey notes.  The recovery in Japan has been stronger than expected.  Developing economies in Asia have been further strengthening their performance.  However, signs of overheating in China -– the primary driver of growth for the region -– have raised concerns.  The global geo-economic pattern has also been changing, the Survey states, with China and India becoming more important as driving forces for world economic growth.


A noticeable increase in demand for commodities and in their prices has contributed to growth in more and more Latin American and African economies, but continued improvements in economic policy remain crucial for achieving meaningful development progress.  Most economies in transition, which fared relatively well in the past global downturn, seem likely to continue to grow.


By contrast, economic activity in most Western European economies has been largely anaemic, according to the Survey.  In Western Asia, economic prospects for many economies are still vulnerable to political instability and geopolitical tensions.  Such factors also remain the main sources of uncertainty for the global economy as a whole.


Notwithstanding solid global growth, aggregate world output remains below potential, as indicated by widespread weak employment growth.  Unemployment rates remain higher than the lows of the past years in most countries, while high unemployment and underemployment persist in many developing countries.  Nevertheless, there have been growing concerns about emerging signs of overheating in some countries and sectors.  Macroeconomic policies alone may not be sufficient to resolve all problems giving rise to unemployment and inflations.  Policies to reduce the prevailing macroeconomic imbalances are equally important for sustaining strong growth beyond the cyclical recovery.


The Survey concludes that, although the world economic situation is improving, there are important downside risks, including the increase in oil prices and the prevailing large international imbalances, reflected primarily in the widening current account and fiscal deficits of the United States.  To ensure the robust growth necessary to achieve the Millennium Development Goals in the majority of developing countries, policymakers worldwide should expedite the implementation of their international development commitments.


With regard to the high-level segment, a report of the Committee for Development Policy on its sixth session, which was held from 29 March to 2 April (document E/2004/33, Supplement 13), draws attention to the fact that economic growth and poverty reduction require the mobilization of financial resources at both national and international levels.  Among the obstacles to resource mobilization are weak fiscal and financial policies, macroeconomic instability, limited formal savings and capital flight, as well as external indebtedness and difficulties in generating new exports.


The Committee considers that good governance could be instrumental for the goals of poverty reduction only if the process of assessment is not biased in favour of external criteria relevant to donors, investors and international monitoring bodies.  On the other hand, recipient countries need assistance from donors to bring their institutions and social, political and economic processes closer to those required by good governance.  The Committee, therefore, proposes that LDCs be invited to participate in the deliberations of institutions where global norms and standards for good governance are established.


Background


The 54-member Economic and Social Council serves as the central forum for discussing international economic and social issues, and for formulating policy recommendations addressed to Member States and to the United Nations.  It makes or initiates studies and reports; makes recommendations on international economic, social, cultural, educational, health and related matters; and promotes respect for, and observance of, human rights and fundamental freedoms.  Subsidiary bodies, commissions and committees of ECOSOC carry out its year-round work.


The ECOSOC strengthens cooperation within the United Nations system, coordinates the work of the specialized agencies and consults with non-governmental organizations.  A substantive session of the Council is convened annually in July, alternating between Geneva and New York Headquarters, and supplementary formal meetings, as well as informal panels on topical issues are held throughout the year.


The current President of the ECOSOC is Marjatti Rasi (Finland).  Vice-Presidents are:  Yashar Aliyev (Azerbaijan); Daw Penjo (Bhutan); Stafford O’Neil (Jamaica); and Jagdish Koonjul (Mauritius).


The ECOSOC’s membership consists of:  Armenia, Australia, Azerbaijan, Bangladesh, Belgium, Belize, Benin, Bhutan, Burundi, Canada, Chile, China, Colombia, Congo, Cuba, Ecuador, El Salvador, Finland, France, Germany, Ghana, Greece, Guatemala, Hungary, India, Indonesia, Ireland, Italy, Jamaica, Japan, Kenya, Libya, Malaysia, Mauritius, Mozambique, Namibia, Nicaragua, Nigeria, Panama, Poland, Qatar, Republic of Korea, Russian Federation, Saudi Arabia, Senegal, Sweden, Tunisia, Turkey, Ukraine, United Arab Emirates, United Kingdom, United Republic of Tanzania, United States and Zimbabwe.


The proposed programme of work for the substantive session of 2004 is contained in document E/2004/L.7.  The session’s annotated provisional agenda can be found in E/2004/100.  More background information can be found at:  www.un.org/esa/coordination/ecosoc.


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