|Department of Public Information • News and Media Division • New York|
Conference on World Financial
and Economic Crisis
1st & 2nd Meetings (AM & PM)
‘WE NEED INTERNATIONAL SOLIDARITY’ TO HELP ALL COUNTRIES WEATHER GLOBAL ECONOMIC
CRISIS, SAYS SECRETARY-GENERAL, AS THREE-DAY CONFERENCE CONVENES AT HEADQUARTERS
General Assembly President Urges Delegates to Shape a ‘Hopeful Future’
Based on Principles of Respect, Care, Universal Responsibility, Cooperation
Vowing to marshal all the resources of the United Nations to monitor the impact of the current financial crisis and chart a path towards recovery, especially for hard hit poor countries, Secretary-General Ban Ki-moon today called for international solidarity to reform outdated global rules and institutions, and a renewed multilateralism to help all countries weather the economic downturn.
“We need international solidarity. We need the United Nations,” said Mr. Ban, opening the three-day Conference on the World Financial and Economic Crisis and its Impact on Development with a warning that the fallout could last for years and drive millions more people out of work and families into poverty. The General Assembly, which had organized the meeting, represented all humanity, and had an obligation to galvanize action. “Together, we must support the economic rights, the social rights, the human rights of all the world’s people,” he said.
To get there, he cited three specific areas for action: mobilizing full strength for better data on the impact of the crisis on the poorest; keeping global commitments to help people move from vulnerability to opportunity; and remaking international institutions for the twenty-first century. The United Nations has a presence in all countries and “an eye on all sectors”, he said, pledging to marshal the full resources of the world body to monitor the impact of the crisis in real time.
“We will launch this Global Impact and Vulnerability Alert System in the coming months,” he continued, adding he was also mobilizing the entire United Nations system to support countries on food security, trade, a greener economy, and a Global Jobs Pact. Mr. Ban also had just sent a letter to G-8 leaders ahead of their annual summit, this year hosted by Italy, urging concrete commitments and specific action to renew international resolve. He had also stressed the need to commit resources to help the most vulnerable adapt to climate change and “seal the deal” at a United Nations summit in Copenhagen in December.
He went on to say the economic downturn must not be an excuse to abandon pledges to help the developing world. “Surely, if the world can mobilize more than $18 trillion to keep the financial sector afloat, it can find more than $18 billion to keep commitments to Africa,” he said, adding that evidence showed precisely where scaling up resources could transform lives, increase possibilities and expand human potential. This was not charity, but a development imperative, as well as a central ingredient in a coordinated global recovery plan.
Secretary-General Ban also called for a reform of international financial institutions, saying that bodies and mechanisms created generations ago must be made more accountable, more representative and more effective. “I regret that financial institutional reform has divided Member States, [but] this is not a cause for any one person, nation or group of nations. It is a challenge for us all.” (For the full text of the statement, see Press Release SG/SM/12336.)
In his opening remarks, General Assembly President Miguel d’Escoto Brockmann, of Nicaragua, who was also elected President of the Conference, urged all nations to work together so the global financial crisis did not spark a social, environmental and human tragedy. All were therefore obliged to proclaim their responsibility towards each other, so that, together, inclusive solutions could be sought. “There is no better place to do so. The General Assembly, by its very name, is the hall of global democratic inclusiveness,” he declared.
“We must be absolutely clear about the fact that we must go beyond controls and corrections in the model and work towards coexistence”, he stressed. The global crisis had resulted from a selfish and irresponsible way of life, and now it was imperative to seek what the United Nations Charter referred to as “a sustainable way of life”, which presupposed a set of shared values that ensured a good standard of living for present and future generations.
“We have arrived at the last frontier,” he declared. The path once followed was now blocked. Addressing controls and corrections in the current model were insufficient in the medium- and long-term, as their inherent ability to confront the global crisis was weak. Selfishness and greed must be replaced by solidarity and efforts that presupposed radical change, he said, warning delegations that it would be irresponsible to build a “Noah’s Ark” that saved only the economic system and left the majority of humankind to its own fate.
“We must collectively adopt a set of decisions that, as far as possible, meet the needs of all,” which included the great community of nations and its shared home, Mother Earth. He urged delegations to overcome a stifling past and shape a hopeful future, built on four ethical principles: respect; care; universal responsibility; and cooperation. The Conference provided an opportunity for delegates to take measures that would reign in the crisis and create a higher sense of living together. Today’s pain was not that of one on his deathbed, but rather one experiencing a new birth. “We will again shine. That is my hope.”
Among the more than 25 speakers to take the floor today, Ngozi Okonjo-Iweala, Managing Director of the World Bank, said the United Nations was gathered at a defining moment. It was no longer feasible to hide behind artificial walls pretending that any country could survive on its own. What had started with turmoil in selected segments of the financial markets had turned into one of the sharpest global economic contractions in modern history. As it deepened, it was morphing into a global human and development crisis.
Outlining some facts and figures for what that meant, she said the World Bank’s forecasts suggested that developing country growth would reach only 1.2 per cent in 2009 compared to 7.7 per cent in 2007. Investment was declining sharply, with net capital flows into developing countries falling to $700 billion in 2008 from $1.2 trillion in 2007. In sub-Saharan Africa and South Asia, where the bulk of the world’s poor lived, the growth slowdown virtually eliminated any prospect for continued poverty reductions in 2009.
“My point is simply this: We are in the midst of a development crisis of immense proportions”, she said. Therefore, failure to launch intensive, inclusive efforts to help vulnerable countries could lead to human catastrophe and even civil unrest around the globe. For its part, the World Bank had moved to quickly leverage its own resources to match the needs of the hardest hit developing countries. Yet, the issue was not to dwell too long on what each country or institution was doing, but to determine how, as a community of will and purpose, all nations could work to effectively urgently address the needs of those who were hardest hit. To that end, the World Bank had tried to practise and not preach.
Dean O. Barrow, Prime Minister and Minister of Finance of Belize, speaking on behalf of the Caribbean Community (CARICOM), said economic devastation in developed countries received great coverage in the international media, with “heart-rending stories” of the newly unemployed being a daily staple on CNN. But, where the effects of the crisis were the sharpest, international reporting was “well nigh non-existent”. Indeed, it was a fact that for the Caribbean, the current set of economic conditions was the worst since Independence.
The economic recovery that some spoke of did not even enter the minds of developing countries. He said commodity prices were severely depressed, accompanied by a decline in export earnings from agriculture, tourism revenues were contracting, and foreign direct investment was in retreat. Finance Ministers were struggling with lower revenues to deal with mounting expenditures. “It goes without saying that there is now no prospect of our countries’ achieving the time-bound Millennium Development Goals,” he said, stressing that developed countries must reassess and restructure their bilateral assistance programmes to developing countries.
While he was pleased to acknowledge the first major set of financial system regulatory reforms announced last week in the United States, the International Monetary Fund (IMF) must now develop a relationship with national financial system regulators, and its surveillance must be, and be seen to be, even-handed. In the interest of better governance of international financial institutions, there could be no justification for continuing the practice of having a United States-elected President of the World Bank and European-elected Managing Director of the IMF. The IMF should also lend because of need, instead of lending because it was trying to meet a lending quota, he added.
For her part, Susan Rice of the United States said tackling the global financial crisis was an issue which all had an interest in addressing. Today’s Conference was particularly important for addressing the needs of the most vulnerable, and offered an opportunity for delegates to exchange views on how to respond. The United States would participate, listen, exchange its views and work in a spirit of cooperation. Indeed, many around the world, especially the poorest, were struggling to respond to the crisis, she said, and the United States was working to address their needs.
Another goal of today’s meeting should be to increase mutual understanding and communication, notably among the many organizations working on the global response. Beyond that, she said the United States understood that it had an economic, security and moral obligation to extend a hand to those facing the greatest risks. In that context, her Government supported increasing resources to enhance the emergency lending capacity of the World Bank.
“These are challenging times,” she said, and the United States remained committed to increasing its development assistance and would support new investments in food security that would help the world’s most vulnerable. Along with others, the United States bore a responsibility for the crisis. She explained that the choice today was not between a chaotic form of capitalism and oppressive State economies. That, as President Barrack Obama had noted, was a false choice. Rather, “we must look to the future” to restore sustained growth that could come only from developing markets that advanced opportunities for all.
Also speaking in today’s debate were the Prime Ministers of Serbia and Grenada, as well as the Vice-Presidents of Gambia, Honduras and Zimbabwe, and the Deputy Prime Ministers of the Russian Federation, Lao People’s Democratic Republic, Jamaica and Timor-Leste.
Ministers of the Netherlands, Bangladesh (on behalf of the least developed countries), South Africa, Mexico (on behalf of the Rio Group), Solomon Islands (on behalf of the African, Caribbean and Pacific Group), Dominican Republic, Cuba, China, Bahamas, Guyana and the United Kingdom also delivered remarks.
The Deputy Minister of Foreign Affairs of the Czech Republic (on behalf of the European Union) also addressed the Assembly, as did the Chairman of the Council of Ministries of Bosnia and Herzegovina, and the Secretary of State for Foreign Affairs and Cooperation of Portugal. The Chairman of the National Financial Supervisory Commission of Viet Nam also spoke.
The Conference held the first of four scheduled round table discussions, today focusing 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”. The discussion was chaired by David John Howard Thompson, Prime Minister of Barbados, and Mirko Cvetkovic, Prime Minister of Serbia. (Issued separately as Press Release DEV/2750.)
The panellists were Joseph Stiglitz, Professor, Columbia University, and Chair of the Commission of Experts of the President of the United Nations General Assembly on Reforms of the International Monetary and Financial System; Ngozi Okonjo-Iweala, Managing Director of the World Bank; Andrei Bougrov, Managing Director and Member of the Board of Directors of the Interros Company and Executive Director and Member of the Board of Directors of the International Bank for Reconstruction and Development; Yu Yongding, former Director of the Institute of World Economics and Politics, Chinese Academy of Social Sciences and Former Member of the Monetary Policy Committee, People’s Bank of China; and Alicia Bárcena, Executive Secretary of the United Nations Economic Commission for Latin America and the Caribbean (ECLAC).
The Conference began its work today adopting its rules of procedure (A/CONF.214/2) and its agenda and other organizational matters (A/CONF.214/1). It next endorsed the recommendations concerning the composition of the General Committee and the distribution of posts as set out in document A/CONF.214/5.
The Conference then elected by acclamation its Vice-Presidents: Afghanistan, Argentina, Bolivia, Cameroon, China, Egypt, France, Honduras, Hungary, Iraq, Jamaica, Kyrgyzstan, Mongolia, Myanmar, Namibia, the Netherlands, Niger, Nigeria, Portugal, Moldova, Russian Federation, Rwanda, Solomon Islands, Spain, Togo, United Kingdom and United States. Maged Abdelaziz of Egypt was also designated by acclamation as Rapporteur-General.
The Conference next endorsed the proposals contained in section IV of its organization of work (document A/CONF.214/5), which concerns the allocation of items, plenary meetings, the Main Committee, and round tables, among other things.
Owing to the fact that a broad-based consensus had emerged on the proposed text of the Conference’s Outcome Document, the Conference decided to take up the consideration of that draft document directly at the concluding afternoon plenary meeting on Friday, 26 June.
Next, the Conference appointed to the Credentials Committee Botswana, China Cyprus, Luxembourg, Mexico, Mozambique, Russian Federation, Saint Kitts and Nevis, and the United States.
The Conference will resume at 10 a.m. Thursday, 25 June.
The Conference on the World Financial and Economic Crisis and its Impact on Development began its three-day meeting today to assess the worst global economic downturn since the Great Depression. The aim is to identify emergency and long-term responses to mitigate the impact of the crisis, especially on vulnerable populations, and initiate a needed dialogue on the transformation of the international financial architecture, taking into account the needs and concerns of all Member States.
Launching today’s summit, the President of the General Assembly, MIGUEL D’ESCOTO BROCKMANN, of Nicaragua, also speaking as President of the Conference, said that while delegates gathered today were citizens of different nations, they also were citizens of a world in which there were multiple relationships of interdependency. At this critical time, all must work to avoid having the global crisis turn into a social, environmental and human tragedy. That obliged all to proclaim their responsibility towards each other, so that, together, inclusive solutions could be sought. There was no better place to do so. The General Assembly, by its very name, was the hall of global democratic inclusiveness.
Indeed, it was not responsible to build a “Noah’s Ark” that saved only the economic system and left the majority of humankind to its own fate. “We must collectively adopt a set of decisions that, as far as possible, meet the needs of all”, he said, which included the great community of nations and its shared home, Mother Earth. “We must overcome a stifling past and shape a hopeful future.”
The global crisis had resulted from a selfish and irresponsible way of life, he said; a way of consuming and producing. At its centre, it was an analytical expression that concealed a perverse social injustice.
“We have arrived at the last frontier,” he said. The path that had been followed was now blocked. Addressing controls and corrections in the current model were insufficient in the medium- and long-term, as their inherent ability to confront the global crisis was weak. Selfishness and greed could not be corrected; they must be replaced by solidarity, and efforts that presupposed radical change.
“We must be absolutely clear about the fact that we must go beyond controls and corrections in the model and work towards co-existence”, he stressed. It was imperative to seek what the United Nations Charter called a sustainable way of life, which presupposed a set of shared values that ensured a good standard of living for present and future generations.
The danger faced was great, he continued, but greater yet was the opportunity for salvation that the crisis obliged all to discover. Now was the time to create a globalized policy on the basis of the many experiences and cultural traditions of the world’s peoples. A new vision that created a new ethics was needed.
He spoke of a Mother Earth that regulated itself, a contemporary concept that was in line with the vision of indigenous peoples, for whom Earth was venerated. “The Earth can live without us, but we cannot live without her,” he said. As a result of excessive consumption and waste, the Earth had exceeded by 40 per cent its ability to renew goods and services. A vision of an Earth that so united its peoples that it was able to feel, love and think was extremely urgent in the face of the Earth’s degradation.
He said that, from that vision, a new ethics should emerge -– a new form of interrelationship -– and it was first important to safeguard the shared heritage of humankind. The community of peoples was a community of shared assets that could not be appropriated by anyone. The common good had the character of being freely given and needed to involve the “community of life”. No one could be excluded. It was not for sale. The Earth belonged not to the powerful, but rather to all the ecosystems of which it was composed -- it was a grant from the universe. Because it was alive, it had the right to be protected and maintained, so as to reproduce life.
A shared vision of the Earth involved seeing water as a shared good, he continued. Water was essential and all had a right to it, regardless of the costs involved in gathering, purifying and distributing it. He expressed concern at the idea of privatizing it. It was sacred and could not be bartered. The same must be said for forests, which prevented climate change from making life on earth unviable, and for oceans.
In addition, humankind was a shared good and endowed with dignity, he said. As such, those who waged wars must be stopped. In that context, he urged the complete abolishment of nuclear weapons and establishment of a “zero tolerance” rule for them, without exception. A meeting for those States that possessed nuclear weapons could not be delayed. Now was the time for such action. The world could not tolerate the “obscenity” of the growing amount of funds spent on weapons, as tiny amounts were being devoted to helping half of humankind out of poverty.
He urged collectively taking short- and medium-term measures to lay the foundation for a new form of sustainable living. In that pursuit, five pillars would guide practice, notably the sustainable use of natural resources and recovery of a noble concept of economy that did away with “eco-banditry”. Democracy must spread to all institutions, and broaden to include the relationship between men and women. A baseline ethos must be shaped so that all could play a part in defining the Earth’s heritage. Finally, a spiritual vision of the world must do justice to human yearning for meaning. Applying those ideas was essential to achieving personal and social well-being.
Such concepts laid the foundation for citizens to be the sons and daughters of happiness, rather than poverty and need, he said. The exclusive use of analytical reason had deafened the world to the clamour of the Earth and calls of the oppressed. At the core of human nature, “we are beings of solidarity, compassion and communion”, he said, and he urged enriching analytic reason with cordial reason.
In closing, he spoke of four ethical principles to guide future action: respect, care, universal responsibility and cooperation. Beyond all events, including the global crisis, there was a mysterious, ineffable energy that nourished humans. The Conference provided an opportunity for delegates to take measures that would avoid the crisis from becoming catastrophic; that would create a higher sense of living together. Today’s pain was not that of one on his deathbed, but rather one experiencing a new birth.
“Now, we must work on spiritual capital”, he said. “We will again shine. That is my hope”. If States were to avail themselves of opportunity, they must move beyond selfish attitudes that sought only to preserve a system that benefited a minority and created harm for the immense majority of the world.
BAN KI-MOON, United Nations Secretary-General, said that, unfortunately, the world still faced multiple crises –- food, fuel, flu, economy –- while it was also struggling to overcome the worst global financial and economic crisis since the founding of the Organization more than 60 years ago. Meanwhile, the effects of climate change and extreme poverty had become starker. “Yes, some see financial stabilization and growth in some countries. But I want to say loud and clear: these are merely signs.”
For a large number of countries, there were no “green shoots” of recovery, only fallow fields, he said, cautioning: “The real impact of the crisis could stretch for years.” Millions more families could be pushed into poverty. This year alone, 50 million jobs could be lost. Stressing that there were already too many people going to bed hungry every night and too many children dying from preventable diseases, he said: “We need international solidarity. We need the United Nations.” That was why he had consistently spoke out for the vulnerable -– those least responsible for the current crisis and those least able to respond.
There had been some progress, he continued, noting that ahead of the Group of Twenty (G-20) meeting in London this year, he had called for a truly global stimulus package –- a $1 trillion effort that had advanced the interests of all nations, especially the developing nations. The G-20 had agreed on a substantial financial support package of some $1.1 trillion, the bulk of which would be made available through the International Monetary Fund (IMF), the World Bank and other multilateral development agencies. That had been largely a United Nations initiative, but it was only a beginning. “It falls upon us, collectively, to make sure that good intentions translate into concrete action,” he said.
In the months ahead, there would be a number of key opportunities to strengthen global growth, mitigate climate change and combat extreme poverty, including next month's meeting of the Group of Eight (G-8) in Italy; the Climate Change Summit here in New York in September; and the G-20 Summit in Pittsburgh. “We need clear priorities. That is why I have just sent a letter to G-8 leaders urging concrete commitments and specific action to renew our resolve,” he said, adding that he had stressed in his letters the need to commit resources to help the poorest and most vulnerable adapt to climate change and to “seal the deal” in Copenhagen in December. He had also underscored the importance of delivering on pledges of aid to achieve the Millennium Development Goals.
“You, here today, have the broadest obligation of all. The General Assembly represents all humanity,” he said, urging the 192-member body to galvanize action and work together to support the economic rights, the social rights, the human rights of all the world’s people. To get there, he saw action in three specific areas: mobilizing to provide better and more up-to-date data on the impact of the crisis on the poorest; keeping global commitments to help women and men move from vulnerability to opportunity; and working together to reform international institutions for the twenty-first century.
Specifically on vulnerability, he said that while everyone was aware of the big picture concerning countries with shrinking financial reserves, foreign investment remittances, and aid, the international community needed a sharper lens with higher powers of resolution. With that in mind, he stressed that the United Nations had a presence in all sectors and an eye on all actors. He was marshalling the Organization’s resources to monitor the impact of the crisis in real time, and in the coming months planned to launch the Global Impact and Vulnerability Alert System. He was also mobilizing the entire United Nations system to support countries on food security, trade, a greener economy, stronger safety nets, and a Global Jobs Pact.
Leaders must also make good on their commitments. In past economic crises, aid had been cut at the very time it was needed most. “The current crisis cannot be an excuse to abandon pledges,” he said, noting that estimates showed that aid to Africa was already at least $20 billion below the promises made at the 2005 G-8 Summit in Gleneagles, Scotland. Surely, if the world could mobilize more than $18 trillion to keep the financial sector afloat, it could find some $18 billion to keep commitments to Africa.
He said that evidence showed precisely where more resources could transform lives, increase possibilities and expand human potential, by, among other ways, closing the gap between needs and resources at the Global Fund to Fight AIDS, Tuberculosis and Malaria and the Global Alliance for Vaccines and Immunization; guaranteeing food and nutritional security and helping subsistence farmers increase farm productivity and access to markets; and by helping developing countries promote cleaner energy and create green jobs.
“This is not charity. It is not a luxury. It is a development imperative. And it is a central ingredient to a coordinated global recovery plan,” he said. Finally, and fundamentally, the United Nations and the wider international community must work together to reform global rules and institutions. That was a basic issue of effectiveness, legitimacy and public faith. The world institutions created generations ago must be made more accountable, more representative and more effective. He regretted that financial institutional reform had divided Member States. “This is not a cause for any one person, nation or group of nations. It is a challenge for us all,” he said, urging stakeholders to build back better.
The global economic crisis had revealed the need for a renewed multilateralism, he said. Without adequate regulation, a breakdown in one part of the system has profound repercussions elsewhere. Challenges were linked and solutions must be, too, he said. “Let us restore hope to the most vulnerable and build a foundation for greater security and peace,” he said, calling on delegations to also ensure more fairness in the governance of the world's institutions and to combine the power to get results with the principles of social justice. “None of these things can we do alone. All of these things we can do together,” he said.
ISATOU NJIE-SAIDY, Vice-President and Secretary of State for Women’s Affairs of the Republic of the Gambia, delivering a statement on behalf of her country’s President, noted that, because of the ongoing financial crisis, the International Monetary Fund’s World Economic Outlook projected global economic growth to decelerate to 0.5 per cent when measured in terms of purchasing power parity, and to contract by 2 per cent when measured in market exchange rates. That would be the worst annual contraction during the post-war period. Already advanced economies had suffered a colossal 3.8 per cent decline in output, with millions of families facing the loss of their homes and livelihoods. The rippling effects of the downturn on developing countries had been devastating and threatened to neutralize the gains made in the past five years towards achieving the Millennium Development Goals and other internationally agreed development goals. Indeed, growth in emerging and developing economies was expected to slow sharply from 6.2 per cent in 2008 to 3.2 per cent in 2009.
She said that, while African economies were better prepared to address the policy challenges of the crisis owing to the implementation of prudent macroeconomic polices, the continent was in a weaker position than most other regions, because of high levels of poverty and reliance on commodity exports. The Gambia was a small, open economy with total imports and exports accounting for about 80 per cent of its gross domestic product in 2008. Its current and capital accounts were fully liberalized, with per capita foreign inflows amounting to 15 per cent of gross domestic product, thereby making it vulnerable to external shocks. The country’s economic activity had already declined, resulting in declining revenue and grants, exports, manufacturing and production, remittances and private inflows, wholesale and retail trade, and tourism. She called on the developing world’s development partners to maintain or even surpass their official development assistance, to ensure that poor and vulnerable countries like hers could stay the course in investing in critical sectors of their economies.
Turning to national and international efforts to contain the crisis, she said the national bailout plans of developed countries, along with the new facilities at the IMF, the World Bank and regional development banks, should provide developing countries with access to critical funds. With the current Conference poised to adopt another outcome document, it should be noted that a report card on the commitments made at the Group of Eight’s Gleneagles Summit and the Group of Twenty’s recent London Summit, showed that many commitments were unfulfilled. All that was asked for was the fulfilment of such commitments. Indeed, the opportunities presented by the current crisis should not go to waste. Among other things, the crisis had exposed the need for developing countries to have a greater voice on how the international financial system was operated and regulated. “It is absolutely logical that decisions about us be taken with our full participation,” she said, stressing that the global financial architecture should no longer be the preserve of the privileged few and adding that Taiwan should be a participant in today’s dialogue.
ARÍSTIDES MEJÍA CARRANZA, Vice-President of Honduras, underlined the need to participate in the current debate on the global financial and economic crises, which was increasing the suffering of millions of the world’s poorest. It was a fact that the world was mired in the most drastic recession since the 1930s and it threatened to have a grave impact on countless societies. It must be recognized who has the responsibility for creating market conditions without the necessary controls to prevent the current crisis.
With the world experiencing a host of challenges, including, among other things, financial and economic crises, climate change, social justice, political democracy, insecurity, terrorism, and organized crime, he stressed that coordinated work among the world’s Governments was required to meet them. In that, priority should be given to designing a new financial and social architecture that would limit the abuses of corporate monopolies, capital speculators and the imbalances in the global marketplace. Indeed, the dubious virtues of the free market had too often been praised, but it was clear that a legitimate global economic order was now needed. To that end, today’s event should not deal as much with the causes of the crisis, but with the future and the needed regulations that could prevent a recurrence of the crisis, while also ensuring economic freedom.
Emphasizing that Honduras had been affected by the crisis, he said although the country’s economy had enjoyed regular economic growth in recent years, that growth had contracted to 2 per cent, as a result of the crisis. That growth rate was greater than the global growth rate, but against the country’s historical poverty, it was insufficient. To combat the effects of the crisis, the Honduran Government had established counter-cyclical actions to mobilize public and private financial resources to facilitate access to credit and to foster employment across all sectors. Nevertheless, it believed that a supra-national body was needed. The vision outlined in the Secretary-General’s report gave hope for new international institutional arrangements that would allow for a fair, and therefore human, development.
JOICE T.R. MUJURU, Vice President of Zimbabwe, said the economic and financial crisis was “one of the most pressing global issues of our time”. It did not originate in developing countries, but they nevertheless faced “the worst consequences” for their lack of resources to mitigate its impact. Those countries were also concerned that the crisis would last longer than originally expected. Its impact was likely to be more devastating in developing countries, particularly those in Africa, and could seriously threaten their economic development to the extent of reversing progress attained in achieving their Millennium Development Goals. Economic activity had already slowed in African countries, where labour markets had weakened and unemployment had risen. The level of business investments had also slowed, as had the tourism sector. Most countries were faced with shrinking trade, reduced foreign remittances, and a fall in foreign direct investment and aid flows. She urged the international community to partner with Africa to alleviate the impact of the crisis on the poorest countries.
Turning to Zimbabwe, she said drought, lack of financial resources, HIV/AIDS, and brain drain were contributing to an economic slowdown. Agricultural inputs and social service delivery ‑‑ in health, education, water and sanitation ‑‑ was “negatively affected” because financial resources were unavailable. Fluctuating commodities prices had led mines to be seriously scaled down, or even closed down. But, aside from that, she said many companies were affected due to “lack of inflows” and “conditionalities imposed on my country”, leading to a decrease in revenue that limited its capacity to achieve sustainable development. “This situation is now seriously undermining progress by our inclusive Government, constituted by the three main political parties on 13 February 2009, to turn around our economy,” she said.
She urged the international community to support Zimbabwe by providing it with a financial stimulus package. As for the stimulus package being proposed for developing countries in general, it should be tailor-made to support the priorities of recipients. While Zimbabwe took note of efforts by the Group of Twenty, unlike the United Nations that group was not inclusive. Calling on a strengthened role for the United Nations as the most appropriate body to come up with a global solution to the crisis, she said the Organization should be equipped with the right tools and resources. Also, to complement the effort of Governments, the international financial architecture should be reviewed and reformed, addressing the major sources of instability -- policies, markets and the current international reserve system.
She called for agreement on effective exchange rate policies and the establishment of an international reserve system that was sensitive to the needs of Member States whenever they were facing a crisis. The voting system at the World Bank and the International Monetary Fund should remove the bias in favour of developed countries. The IMF’s loan policy contained “old policy conditions” that were the opposite of the expansionary and stimulus policies being implemented in developed countries, and should be streamlined. She also touched on the need to remove barriers to trade, and the merits of a vulnerability fund through which to provide infrastructure financing and microfinance. The Multilateral Debt Relief Initiative did not cover all countries, and so Members should consider establishing an international mechanism for sovereign debt restructuring.
DEAN O. BARROW, Prime Minister and Minister of Finance of Belize, spoke on behalf of the Caribbean Community (CARICOM), saying economic devastation in developed countries received great coverage in the international media, with “heart-rending stories” of the newly unemployed being a daily staple on CNN. But where the effects of the crisis were the sharpest, international reporting was “well nigh non-existent”. “It is a fact that for us in the Caribbean, the current set of economic conditions is the worst to have overtaken us since Independence,” he said. The economic recovery that some spoke of did not even enter the minds of developing countries ‑‑ commodity prices were severely depressed, accompanied by a decline in export earnings from agriculture, tourism revenues were contracting, and foreign direct investment was in retreat. Finance Ministers were struggling with lower revenues to deal with mounting expenditures. “It goes without saying that there is now no prospect of our countries’ achieving the time-bound Millennium Development Goals,” he said.
He said the only option for developing countries was to borrow. But, high debt levels and contraction in lending limited their ability to do so. The funding that was available was tied to previously agreed projects, which, while important for development, were not directed towards stimulating the sectors that were most affected. So far, the Group of Twenty had agreed to increase the capacity of some international financial institutions to lend to countries in distress, but it was not enough to deal with “even part of” developing countries’ requirements. Also, part of the Group of Twenty agreements had caused additional stress for some developing countries ‑‑ harmful tax competition had been reactivated, requiring countries such as those in the Caribbean to conclude at least a dozen tax information exchange agreements. It seemed as though the big countries had no interest in facilitating the smaller countries, who were being stretched to the limit with limited staff. “We are thus to be hounded out of the successful business of providing international financial services when those diversification activities were neither the cause nor the consequence of developed country problems,” he said.
Developed countries must reassess and restructure their bilateral assistance programmes to developing countries, he said. The outcomes of many of those programmes had been put at risk by the crisis, and it was in everyone’s interest to keep them on track and to expand them. The Group of Twenty had agreed to a substantial increase in the volume of resources to be made available to the IMF, but the Fund’s interventions were mainly directed towards addressing short- and medium-term balance of payments constraints, and not to provide fiscal and budgetary support. While some countries continued to need traditional IMF assistance, most needed help to increase domestic economic activity. For that, institutions such as the World Bank, regional development banks, and subregional institutions such as the Caribbean Development Bank and the Central American Bank for Economic Integration were best placed to help. “I want to make the point very clearly that if further devastation in our developing countries is to be averted, specific arrangements for the flow of resources to our Governments, whether by way of grants or soft loans, need to be put in place immediately,” he said.
While not singling out the United States, he said the problem of lax oversight originated there. In that context, he was pleased to acknowledge the first major set of financial system regulatory reforms announced last week in the United States. He also “shone a light” on the IMF, whose warnings became strident and public when developing countries did not take corrective action, but seemed “less able to speak truth […] where the big countries are concerned”. The IMF would now need to develop a relationship with country financial system regulators, and its surveillance must be, and be seen to be, even-handed. In the interest of better governance of international financial institutions, there could be no justification for continuing the practice of having a United States-elected President of the World Bank and European-elected Managing Director of the IMF. The IMF should also lend because of need, instead of lending because it was trying to meet a lending quota.
MIRKO CVETKOVIC, Prime Minister of Serbia, said that with the current highly integrated global economy, disturbances in one of its segments inevitably produce negative effects in other parts of the world, threatening to undermine worldwide economic growth and, among other things, slow implementation of the Millennium Development Goals. All countries had been severely hit by the economic crisis, even as they were dealing with the effects of other challenges, including food shortages, extreme poverty and climate change.
It was, therefore, necessary to take adequate and coordinated measures aimed at overcoming negative impacts, and, above all, ensuring liquidity and credit lines for developing countries. At the same time, he said it was important to press ahead with implementation of the Millennium Goals and the Monterrey Consensus on development financing. He said that, while there were still many uncertainties surrounding the current financial crisis, it was becoming clear that it would be vitally important to establish a balanced level of consumption as soon as possible. That would restore the levels of citizens’ confidence in the economy, which was the main prerequisite for demand growth and the beginnings of economic recovery.
He went on to say that developing countries, because of their potential for growth, had an important role to play in the current increasingly integrated global economic environment. However, those same countries faced a higher risk of socio-economic shocks in a global economic downturn. With that in mind, he said that now, more than ever, direct investment in and financing of developing countries should be bolstered, since economic growth and higher living standards throughout the developing world would create a realistic basis for the growth of global aggregate demand. That would allow for higher capital yields to investors and financial institutions, while avoiding serious unemployment and other social ills caused by a lack of resources.
As for the situation in Serbia, he said there had been a drastic drop in foreign direct investment coupled with a credit crunch that had caused significant economic problems at the end of last year. He called for more even distribution of the burden of the financial crisis between developed and developing countries, based on joint responsibility. Global cooperation and adequate regulation were of crucial importance, in both the trade and financial sectors. The current crisis confirmed again the need to strengthen the international financial architecture and other economic mechanisms to ensure greater coherence and a more effective means of regulation.
NIKOLA ŠPIRIĆ, Chairman of the Council of Ministries of Bosnia and Herzegovina, said the nature of the world economy in the twenty-first century caused events at the global level to have an almost immediate effect on individual national economies. Many players in the market, whether States, companies, or individuals, possessed enormous reserves that could dictate the value of various currencies, commodities, bonds, stocks and so on. Also, there had never been so many options for speculation and profit-taking, which could trigger a significant downturn even in the most powerful economies. Numerous links, transactions, and trade options, and new correlations between investors and markets, made it almost impossible to track all the irregularities. The new economy needed new mechanisms, new regulations and “much more transparency”.
He said many poor and developing countries needed more predictability, to enable their growth, development and prosperity. There was no greater threat to global peace and stability than the current financial and economic crisis. Without prompt action, it was only a matter of time before such a crisis turned into a social and political crisis. The interconnectedness and interdependence of today’s world meant that a significant downturn in one part of the world, especially in developed countries, could cause an economic meltdown and collapse in even remote areas in a matter of days. Most political disputes, conflicts, revolutions and wars throughout history were partly due to economic problems –- thus, the world needed a mechanism to create an early warning system to enable the world to react appropriately, and needed tools to intervene in the market. It must take measures to prevent greed and irresponsible policies from pushing huge numbers of people into poverty. However, protectionism was not the answer, because it would worsen the economic situation globally, and negatively affect international relations.
He said even countries with prudent and cautious economic policies had no chance of avoiding an economic downturn. The global crisis could not be solved on the national level, but needed a global solution. For many years, developing and developed countries were told to practise good governance at home. But, even if their lack of good governance brought harm, it rarely influenced others outside the country. In contrast, economic imbalances in the most powerful countries could result in extreme volatility in the world market and have a tremendous impact on all other countries. That was why the strongest world economies must demonstrate a special responsibility. Concerned over the absence of a regional and European dimension in resolving the problem, he had launched an initiative to found an investment bank for South-Eastern Europe. Also, expressing concern about a possible reversal in some countries of progress made towards achieving international development goals, he noted that immediate, decisive action was needed. Of paramount importance were new policies to better serve and assist least developed and developing countries, as was the need for transparency. “The very same transparency that the international community urged and advocated in my own country during the process of post-war rebuilding is needed,” he said. The readiness of global institutions and funds to promptly and effectively intervene must be significantly upgraded.
TILLMAN THOMAS, Prime Minister and Minister for National Security, Legal Affairs and Public Administration and Information of Grenada, associating himself with the Caribbean Community (CARICOM), said he came today with mixed emotions. On the one hand, the financial and economic crisis had presented challenges for small States; and on the other, he was pleased to help seek solutions for addressing its impacts on development. Grenada’s very survival was particularly threatened -- its recovery from two hurricanes in the last five years had disrupted its attainment of the Millennium Development Goals, while the food and fuel crises had exacerbated its already fragile economic situation.
To make that point, he said that in the first four months of the year, customs revenue -– which normally accounted for more than 50 per cent of all Government revenue –- fell by 25 per cent. Foreign direct investment had slowed, tourist arrivals had dropped and unemployment continued to be a major challenge. Remittances had moved in lock-step with the crisis in the major developed countries since October 2008 and were expected to decline by as much as 20 per cent by year’s end. The local economy was projected to contract by 0.5 per cent. Though Grenada was a middle-income country, such indicators showed that the crisis was plunging it into widespread poverty and reversing economic and social gains. More declines were expected in tourism and remittances, particularly from North America and Europe.
Grenada had taken steps to ease the impact of the crisis, he said, but without full recovery in the North, dependent economies would continue to decline. He was concerned that Grenada’s 2009 Atlantic hurricane season had only just begun. Each year, the intensity, severity and unpredictability of those storms had increased. That added to the population’s anxiety. To address the challenge the Government had undertaken a modest stimulus package, which was dwarfed by the needs and financial gaps.
While the world had changed drastically over the years, the old financial rules of accessing financing remained, and thus placed developing countries, as borrowers, at a significant disadvantage, he said. The global crisis required increases in financial resources, accompanied by a restructuring of international financial institutions, improved regulation and better governance. Moreover, the United Nations had to embark on a more prominent role in those pursuits. There was a need for a new financial architecture, with stronger regulation, to secure a better future. That new approach should include better monitoring mechanisms to identify economic and financial threats on the horizon. Further, it must address imbalances in the global economy -– in food, employment, health, development and the environment -- that preceded the crisis. He called on multilateral institutions to come up with ways to reduce developing country debt. In closing, he highlighted the special plight of small island developing States, which were facing the vicissitudes of climate change and required attention. He hoped that the United Nations would respond with, among other measures, a massive global fiscal stimulus, a large part of which should be invested in creating green jobs.
ALEXEY KUDRIN, Deputy Prime Minister and Minister of Finance of the Russian Federation, said there was a clear need to reject standard approaches in reacting to the economic crisis. Strategic challenges had to be considered and a fairer, more transparent financial architecture created. Moreover, widespread consensus on reform of the global economic system was necessary to answer the cries of those who, through no fault of their own, were suffering the most from the current financial upheaval.
Noting that the level of savings in such countries as the United States and the United Kingdom had been quite low in recent years, he said it was clear that, even in developed countries, people could not spend more on consumption when there were insufficient resources to cover those expenses. In fact, the first “green shoots” of recovery in some countries had not resulted from a reform of the financial system, and, among other things, there was still concern regarding capital flows to developing countries. It was now expected that such flows would amount to only a fraction of the recently seen $2.3 trillion transfer of such capital, and institutions that responded to changes in capital flows were needed to protect countries from the shortcomings in those resources.
He said greater coordination in developing country economic policies had resulted after the Asian financial crisis in the late 1990s. Balanced macroeconomic and fiscal policies had been imposed and individual countries had been given latitude to respond. In the current crisis, it was similarly important to give a new format to combined efforts, which should not be concentrated in only a few areas. National and regional efforts must also be coordinated and general rules that were mandatory for all countries set out. Coordination would be critical as the world emerged from the crisis, and in the immediate period after. Further, a new sustainable monetary system that allowed the participation of a variety of currencies and ensured stability should also be set up at the global level. Only then would a new financial system enjoy the world’s trust.
He saluted the efforts of several countries to define the framework for a package of universal agreements to establish a new model of supra-national policies. His country was prepared to actively participate in those efforts and believed the outcome document should reflect such a vision and seek common ways of increasing international cooperation. Stressing that further measures to overcome the crisis were needed, he underlined the outcome document’s emphasis on the timely support to developing countries in their efforts to combat the crisis. To that end, the obligations adopted at Gleneagles should be met. For its part, the Russian Federation had set up a crisis fund of $7.5 billion. Because anti-crisis efforts needed components at all levels of society -- particularly the social protection of people -- further agreement was needed to build on actions taken in other multilateral formats.
THONGLOUN SISOULITH, Deputy Prime Minister of the Lao People’s Democratic Republic, said the economic crisis that had begun in the developed world had now spread to all parts of the globe, with serious human and social consequences. Developing countries, which bore the least responsibility for the economic turmoil, were the most severely affected, and now, as the crisis deepened, faced “a human and development calamity”. He said that, as an estimated 50 million more people were driven into poverty, attainment of the Millennium Development Goals and other globally agreed development priorities would become increasingly more difficult.
All those challenges demanded concerted global action, and the international community had the responsibility, as well as the opportunity, to strengthen its response by taking decisive measures to alleviate the impact of the crisis in the developing world and help them maintain progress towards attainment of the Millennium Goals. “We must ensure existing multilateral commitments are fulfilled, the promised commitments to financing for development are implemented and the aid-for-trade levels are sustained,” he said, adding that the crisis also underscored the importance of wrapping up the Doha Development Round of World Trade Organization negotiations. Further, substantial funding should be made available to the developing countries to offset the impact of the crisis.
While calling for reformed global financial institutions, he stressed that his Government supported the role of the United Nations in developing an international consensus on what action must be taken to address the crisis. His country hoped that the international community would use the current opportunity to adopt the agreed outcome document and ensure full implementation of the follow-up measures outlined therein. As for the situation in his own country, he said the national economy had slowed and its fiscal deficit had increased, especially due to the volatility in commodities over the past year. Likewise, foreign direct investment and tourism had both slowed.
The Government had, therefore, taken concrete actions to strengthen public/private dialogue and create an enabling environment for business and investment. His country also attached great importance to regional financial cooperation as a way to shield it and its neighbours from external shocks. To that end, he welcomed the agreement by the Association of Southeast Asian Nations Plus Three (ASEAN+3) Finance Ministers to increase the size of the Chiang Mai Initiative Multi-lateralization Regional Swap Arrangement and develop a more robust and effective mechanism to support its operation.
SUSAN RICE, Permanent Representative of the United States, said her country placed the highest priority on the global financial crisis, an issue which all had an interest in addressing. President Barack Obama understood that the collective response to the global financial crisis would mark an important moment in history. In his recent speech in Cairo, Egypt, he noted that all countries had a responsibility to join together “on behalf of the world we seek”. That was the goal today -- to continue the work of creating that world. Today’s Conference was particularly important for addressing the needs of the most vulnerable, and offered an opportunity for delegates to exchange views on how to respond. The United States would participate, listen, exchange its views and work in a spirit of cooperation.
Indeed, many around the world, especially the poorest, were struggling to respond to the crisis, she said, and the United States was working to address their needs. Her Government supported multilateral efforts to increase the coherence of sustainable development policies, a topic that had been addressed by several global forums, including the General Assembly, the Commission on Sustainable Development, the Commission on the Status of Women, the Group of Twenty and the International Monetary Fund. Each had its strengths and mandates, and all enjoyed representation from developed and developing countries alike.
The United Nations’ long institutionalized intergovernmental process gave it a unique advantage, she said. Today’s dialogue should focus on finding ways to mitigate the consequences of the crisis, and for the United Nations to perform its development goals with new urgency. Countries should use every instrument at their disposal to tackle the different dimensions of crisis. The United States -- through the Group of Twenty -– was working to build an overall strategy to address the worst financial crisis seen in decades, and had seen considerable success in those efforts. Another goal of today’s meeting should be to increase mutual understanding and communication, notably among the many organizations working on the global response. Beyond that, the United States understood that it had an economic, security and moral obligation to extend a hand to those facing the greatest risks. In that context, her Government supported increasing resources to enhance the emergency lending capacity of the World Bank.
“These are challenging times,” she said. The United States remained committed to increasing its development assistance and would support new investments in food security that would help the world’s most vulnerable. Along with others, the United States bore a responsibility for the crisis. She explained that the choice today was not between a chaotic form of capitalism and oppressive State economies. That, as President Obama had noted, was a false choice. Rather, “we must look to the future” to restore sustained growth that could come only from developing markets that advanced opportunities for all. She hoped that today’s Conference would adopt a practical approach to achieve a vision of a shared future. The United States stood ready to create a new future that would feature jobs, sustained growth and development. In closing, she called on countries to learn the lessons of the crisis and, together, forge a prosperity that would endure in the twenty-first century.
HELENA BAMBASOVÁ, Deputy Minister of Foreign Affairs of the Czech Republic, speaking on behalf of the European Union, said all countries were being severely affected by the global economic and financial crisis. Progress made by many developing countries, particularly in achieving the Millennium Development Goals, was being threatened, and millions were falling back into poverty. The European Union was firmly committed to taking comprehensive, timely and targeted action to support them.
To ensure a fair and sustainable recovery, she said the Union would take targeted, counter-cyclical measures to protect the most vulnerable countries and sustain economic activity. It would improve the effectiveness of its aid, based on the principles outlined in the Accra Agenda for Action, work together for stability and promote an open global economy. While encouraging developing countries to elaborate national response plans to the crisis in consultation with civil society and the private sector, she said the Union would review its development cooperation programmes based on partner country priorities. It would increase support for their efforts to mobilize domestic resources for development, including through improving financial management, and support them in creating an enabling business environment to attract foreign investment.
With that, she called on donor countries to reaffirm their commitment to support developing countries in meeting the Goals, and to achieve official development targets, notably those made at the most recent Group of Twenty summit in London. The Union’s assistance had increased in 2008, reaching more than 49 billion euros and 0.40 per cent of gross national income. Also, the Union would help poor countries cope with the social impacts of the crisis through the creation and strengthening of social protection systems and programmes, including enhancement of financial and in-kind transfers. It was preparing a “vulnerability FLEX” mechanism to deliver support to African, Caribbean and Pacificcountries in 2009-2010.
To revitalize agriculture, she said the Union would strive to ensure continued support for -- and increased investment in -- agriculture and food security, with a focus on small-scale farmers and women. Underlining the importance of the work of the Global Partnership on Agriculture and Food Security, she said her delegation would also work with regional organizations and the private sector to align investments in support of transport and trade infrastructure of agricultural products, linking markets and production areas. More funding for Aid for Trade was needed and the Union would continue implementing its 2007 strategy in that regard.
On climate change, she said the European Union was committed to playing a lead role in bringing about a comprehensive agreement in Copenhagen, Denmark, in December. Significant domestic and external financing sources -– public and private -- would be needed for mitigation and adaptation actions, and the Union would take on its fair share of financing such actions in developing countries. It also supported calls, notably by the Secretary-General and the United Nations Environment Programme (UNEP), that stimulus packages promote a sustainable post-recession global economy.
For its part, the United Nations’ capacity to “Deliver as One” should be strengthened, she continued. Coordination of policies between the Organization, international financial institutions and regional organizations should be strengthened, and she called on it to establish a mechanism to monitor the crisis’ impact on the poorest. As for trade, she said the European Union was committed to swiftly reaching an ambitious, balanced agreement on the World Trade Organization Doha Development Round, which should contain elements of “real value” for developing countries. She welcomed the agreement reached at the April meeting of the Group of Twenty, saying the Union had contributed to refraining from raising new barriers to investment or trade in goods and services or imposing export restrictions.
Swift delivery of agreed commitments was crucial, she said. The crisis had shown the importance of strengthening commitments to standards of propriety, integrity and transparency. Building on existing initiatives, a set of common principles for the conduct of international business and finance was needed for a stable growth path. The European Union welcomed the 26 April outcome of the World Bank’s Development Committee Meeting, notably its statement on measures to help poor countries to respond to the crisis.
NGOZI OKONJO-IWEALA, Managing Director of the World Bank, said the United Nations was gathered today at a defining moment when the international community was called on to show solidarity, compassion, resolve and action. As United States President Franklin D. Roosevelt had said at the opening of the 1944 Bretton Woods Conference, “Economic diseases are highly communicable. It follows, therefore, that the economic health of every country is a proper matter of concern for all its neighbours”. It was no longer feasible to hide behind artificial walls and pretend any country could survive on its own. What had begun with turmoil in selected segments of the financial markets had turned into one of the sharpest global economic contractions in modern history. As it spread and deepened, it was morphing into a global human and development crisis.
Outlining some facts and figures for what that meant, she said the World Bank’s forecasts suggested that developing country growth would reach only 1.2 per cent in 2009 compared to 7.7 per cent in 2007. Investment in many developing countries was declining sharply, with net capital flows into developing countries falling to $700 billion in 2008 from $1.2 trillion in 2007, and leaving a large gap to fill. The crisis-related slowdown in growth in developing countries implied there were an estimated 55 to 90 million more extremely poor people in 2009 living on less than $1.25 a day, than had been projected before the crisis. In sub-Saharan Africa and South Asia, where the bulk of the world’s poor lived, the growth slowdown virtually eliminated any prospect for continued poverty reductions in 2009. Rather, rising poverty was expected in some of the more fragile and low-growth economies, which could also experience declines in per capita incomes.
She said that, while the full impact of the crisis on labour markets in the developing world was emerging only slowly, there was growing evidence that it was happening. Particularly worrisome were signs that the jobs being lost were the “good” jobs in productive export-oriented sectors. Already 28 of 38 developing economies reported double-digit drops in nominal exports in December compared to the year before. Using the $1.25 a day poverty line, forecasts suggested that over 93 million additional workers were expected to be categorized as “working poor”, with 47 million in South Asia and 24 million in South-Saharan Africa.
“My point is simply this: We are in the midst of a development crisis of immense proportions”, she said. With the world already off-track on most of the human development Millennium Development Goals, the global crisis threatened further setbacks. Core spending on health, education, infrastructure and social safety nets could drop by as much as $200 billion as a result of the global slowdown. This translated not only into infant deaths in developing countries, but to a significant risk that the children in poor households who were withdrawn from schools today might never return. That implied, in turn, that the situation could be even more catastrophic, with the long-run implications being more severe than those observed in the short run.
She said the facts were sobering, but what the international community had to realize was that a failure to launch intensive efforts to help countries made vulnerable by the crisis could lead to human catastrophe and even civil unrest around the globe. A global and inclusive response that paid attention to local specificities was required. For its part, the World Bank had moved to quickly leverage its own resources to match the needs of those developing countries hit hardest by the crisis. Yet, the issue was not to dwell too long on what each country or institution was doing, but to determine how, as a community of will and purpose, the global community could work to effectively address, urgently and immediately, the needs of those who were hardest hit. To that end, the World Bank had tried to practice and not preach.
BERT KOENDERS, Minister for Development Cooperation of the Netherlands, said that, with the world economy “in the thick of the fog”, today’s meeting came none too soon. The United Nations was working against the clock as the crisis took a staggering human toll every day on ordinary citizens around the world and especially in developing countries. Its depth and magnitude meant no country was immune. Clearly it was a moment in history when national interests converged. Countries were eager to feel the positive impact of immediate mitigation policies, including measures to stabilize financial markets, get capital flowing again and put the world economy back on a growth path. With a broad understanding of the main causes of the crisis had come a rethinking of the basic assumptions of economic policies and a recognition that globalization can have an ugly side, if it was not managed responsibly.
He said the Group of Twenty, which had agreed in April on an extraordinary package of far-reaching measures to fight the crisis and prevent future ones, deserved credit for formulating the first concrete international and comprehensive response to the crisis. The current Conference should build on that work, since the United Nations added, by virtue of its universal membership, inclusiveness and legitimacy to its decision making. Still, inclusiveness would hardly be enough, since the gravity of the crisis required bold and effective action and inclusiveness alone could not restore jobs, growth or even confidence. The Conference was, thus, a test case for broad, inclusive multilateral decision-making. “Can we prove the sceptics wrong who maintain that the United Nations […] is too unwieldy to agree on meaningful solutions when they are most needed?” he asked, stressing that this was the Conference’s specific challenge within the broader challenge of the crisis.
But even though immediate measures to steer away from financial and economic disaster were the focus, he said, the longer-term systemic and macroeconomic deficiencies and imbalances should not be forgotten. To that end, he paid tribute to the work of the Commission of Experts, which was chaired by Professor Joseph Stiglitz, for its thought-provoking report. The Netherlands fully endorsed calls for rapid and effective steps to mitigate the effects of the crisis, including creating much-needed fiscal and policy space for developing countries. Protectionism and lending conditionalities that led to counter-productive pro-cyclical outcomes should also be avoided. The Doha Round of trade negotiations should be completed and financial supervision and regulation strengthened. The illicit flow of capital also needed attention, while the developed countries should meet their official development assistance commitments.
In the medium- and long-term, the mandates, scope and governance of the international financial institutions should be reformed and modernized, he went on to say. The voice and representation of emerging and developing economies should be enhanced. The analytical thinking towards a more efficient reserve system should continue. The creation of a new institution alongside or above existing ones wouldn’t ensure better coordination and coherence in the global financial and economic system. Stacking a new mandate upon existing ones might actually add to the confusion of which institution was responsible for what. It was urgently important to strengthen the capacity and effectiveness of the United Nations and enhance the coherence and coordination of policies and actions between the United Nations and the financial institutions. The sixty-fourth General Assembly could help solve the urgent problems, and an ad hoc panel to reinforce coherence was urgently called for. Substantial follow-up to the ideas and measures set out by the Conference would also be needed.
KENNETH BAUGH, Deputy Prime Minister and Minister of Foreign Affairs and Foreign Trade of Jamaica, aligning himself with the Caribbean Community (CARICOM) and the “Group of 77” and China, said the financial crisis had occurred at an inauspicious time. Only a few months ago, developing countries were struggling to address the impacts of the food and fuel crises. It was not surprising that the “triple tsunami” of the food, fuel and financial crisis had only worsened a precarious situation. In Jamaica, the impact had been severe: Major export industries had recorded lower output and exports, which in turn, had increased unemployment and slowed remittance inflows. The development prospects of the majority of Jamaica’s population had been affected.
Of critical concern was the impact of the crisis on the attainment of the Millennium Development Goals, and it was increasingly clear that Jamaica might not achieve some of the targets, he said. While there were some indications of global recovery, Jamaica was not expected to show signs of improvement until a year after global recovery. Against that background, developing countries like Jamaica needed more resources. Funding committed to at the recent Group of Twenty meeting would best be channelled through regional and multilateral agencies, including the Caribbean Development Bank. The developed world must fulfil pledges to commit 0.7 per cent of their gross domestic product to development assistance. Moreover, small and vulnerable highly indebted middle-income countries, including Jamaica, must be recognized by multilateral institutions. They needed access to concessionary financing.
For years, many had called for comprehensive reform of the international economic architecture, and he believed that there was now consensus on that issue. Global challenges required global solutions. At the same time, positive spin-offs could be realized from partnership between developing and developed countries -- the developing world could provide huge market potential if its purchasing power was increased. Such partnership was critical for ensuring global prosperity.
In addition, the crisis had underlined the need for reform of the international financial system. In that context, he called for eliminating the use of conditionalities and allowing developing countries the necessary fiscal space to implement national development objectives. Reform efforts should seek to institute a well-functioning, rules-based and non-discriminatory multilateral trade regime that promoted development and recognized the diversity of economic size. As such, he called for successfully concluding the Doha Round with full realization of the Doha Work Programme. In closing, he urged delegates to continue work in a spirit of partnership, fully aware that countries must work together to emerge from the crisis. “One hand can’t clap”, he added.
JOSE LUIS GUTERRES, Deputy Prime Minister of Timor-Leste, said the world was confronted by a host of interconnected challenges: a global economic and financial crisis; the lingering effects of the food and fuel crisis; the H1N1 crisis; persistent extreme poverty; and climate change. Timor-Leste sought to deal with the crisis, while simultaneously pursuing a vigorous and truly viable sustainable development. Since its crisis in 2006, it had come a long way, overcoming the setbacks of that time. A president and parliament had been democratically elected, while the Timorese had regained trust and confidence in the State’s institutions. Peace and security had been consolidated through a national dialogue and other reconciliation initiatives. In 2008, the country had registered one of its best economic performances, achieving economic growth of 12 per cent. While it was blessed with oil and gas, Timor-Leste recognized that it could not depend on those non-renewable resources alone. It thus intended to save for future generations, while also spending money to develop agriculture, industry and other sectors.
He emphasized that economic progress did not mean that Timor-Leste had solved all of its development and social problems. It did, however, provide hope, optimism and trust in the future. To that end, the Government had taken a number of measures to mitigate the effects of the crisis and to combat poverty and meet the Millennium Development Goals. An Economic Stabilization Fund had been set up in anticipation of food shortages and for the stabilization of food prices. The Government was also focusing on developing the country’s infrastructure. Moving forward, it would also be important to invest in human capital, critical economic and social infrastructure, agriculture and rural development, small and medium enterprises, and institutions to improve service delivery.
He concurred with the ideas and recommendations contained in the outcome document. He joined the least developed countries in appealing for policy response, external resources and assistance to mitigate the effects of the crisis, so that the gains in meeting the Millennium Development Goals and the targets in the Programme of Action for the least developed countries for the Decade 2001-2010 were not reversed. It was hoped that the Conference would mobilize not only ideas, but also resources to address the challenges in a timely fashion.
ERNESTO CORDERO ARROYO, Minister of Social Development of Mexico, speaking on behalf of the Rio Group, said his delegation had supported the convening of today’s Conference from the outset and shared States’ concerns for addressing the causes of the global crisis. It was essential to advance in such areas as restoring growth and employment, stabilizing financial markets, countering the drop in capital flows -- especially for developing countries -- increasing the commercial flow of goods and services, and protecting economic, social and human advances, particularly in middle-income countries. In the same way, reform of the international financial institutions was needed.
He said a rapid, coordinated and decisive response to the crisis was needed, with developed countries taking into account the effects of their fiscal stimulus packages on developing nations. Developing countries should have access to resources to allow them to adequately respond. Further, international cooperation should be promoted to strengthen regulation and supervision of all institutions, instruments and markets, notably hedge funds, ratings agencies, tax jurisdictions and regulating and supervising associations. Also, reform of the international financial system was needed to make it more oriented towards development. He called for decisively increasing developing countries’ participation in international financial institutions, to make them more representative.
In addition, the heads of those institutions should be elected based on democratic criteria and based on their merits, without geographic or nationality conditions, he said. The Group recognized the importance of regional and subregional banks and called for granting them resources to properly support countries. In the same way, it was essential to satisfactorily conclude the Doha Round in a way that took into account developing countries’ needs. In that context, he emphatically called for resisting protectionist pressures and recognizing developing countries’ rights to use safeguarding mechanisms, consistent with World Trade Organization agreements. He also reiterated the need to eliminate migration controls, consistent with applicable international commitments on that matter.
He said it was urgent to resolve global economic instability. In an increasingly globalized world, global governance must be based on collective actions that supported internationally agreed development goals, including the Millennium Development Goals. Though the current financial architecture presented some instances of global coordination, the diversity of international organs made it difficult to appreciate the comprehensive vision of development challenges. To overcome the crisis, he urged moving beyond bank and financial regulation to address the fundamental issue of inequality in the international financial architecture.
For its part, the United Nations should have an active role in the new international financial architecture, working to balance policies that responded to short- medium- and long-term challenges. Communication between the United Nations and international financial bodies should be improved. In that context, he supported revising the implementation of agreements between the Bretton Woods institutions and the Organization. There was uncertainty about the amount of time an economic recovery would take: credit markets were still frozen and protectionist tendencies could hinder recovery. International cooperation was necessary in a globalized world.
DIPU MONI, Member of Parliament, Foreign Minister of Bangladesh, speaking on behalf of the least developed countries, said it was clear that undue confidence in the self-correcting strengths of the market, lax regulation, and increases in both household and public debt contributed to the global crisis. It was growing deeper than initially anticipated and recovery seemed sluggish and costly. It was affecting the global trade system, global finance and developing countries’ ability to achieve the Millennium Development Goals. It was having a disproportionately negative impact on least developed countries, marked by a sharp contraction of output, job loss, falling commodity prices and a massive withdrawal of private capital flows.
She was worried at the world’s prognosis. The economic crisis had pushed millions below the poverty line and into hunger, through the loss of employment at home and abroad. Given that situation, least developed countries had been compelled to divert scarce resources from development to programmes to cope with immediate impacts. Such a bleak outlook required immediate, collective and forceful actions at all levels. Least developed countries would need urgent and sustained support commensurate with the crisis’ impacts. Restoring global economic health was in everyone’s interest. Least developed countries did not have the fiscal capacity or institutional arrangements to counter the fallout of the crisis. With high poverty rates, they were in most critical need of external fiscal assistance, and she expressed hope that the Conference would provide a guideline for measures to ensure growth.
In that context, she called for restoring three critical global public goods: market confidence, a well-functioning financial system and an open trade regime. There was a need to maintain investments in infrastructure, education and health, and equally to adopt counter-cyclical policies and programmes to compensate for the fall in private demand. Protection of the poor through expansion of social safety nets was also needed.
Her delegation appreciated the decision made at the recent Group of Twenty summit to provide $1.1 trillion to restore credit, growth and jobs in the world economy. It was important that least developed country financing needs were met from multilateral and bilateral sources. The least developed countries were encouraged by the Group of Twenty pronouncements that developed markets would refrain from raising new barriers to investments and urgently conclude the Doha Round. She reiterated the need for least developed countries to be represented in the Group. Her delegation also demanded easier movement of workers, which would improve the quality of the world labour market. She supported the view that at least 1 per cent of bailout package be earmarked for least developed countries to meet their needs for official development assistance. She strongly supported the quick implementation of a new general Special Drawing Right allocation of at least $250 billion to provide a cushion for trade and exchange rate instability.
Reforms based on the diminution of Government had not worked, she said. Reforms were needed to enhance productivity and must grow from within countries. International financial institutions had grown anachronistic, with the shares of capital and voting weights reflecting the distribution of economic and political power obtained in the immediate post-war world. The map had changed, and comprehensive reform was needed to redress democratic deficits in the Bretton Woods institutions. Least developed countries must enjoy full flexibility in determining their own macroeconomic policies that created jobs and reduced poverty. That would help them effectively manage domestic economic policies. She asked that the United Nations play a lead role in norm-setting and rule-making, as well as in undertaking operational activities to address the crisis.
MAITE NKOANA-MASHABANE, Minister of International Relations and Cooperation of South Africa, said the financial crisis had given rise to a synchronized global recession that threatened jobs, livelihoods and social cohesion across the globe. World trade was expected to shrink for the first time since 1982 and job losses could reach 90 million in 2009. The burden would fall on the most vulnerable -- women, children, youth and migrant workers -- and push millions of people back into poverty. Urgent and effective global responses were necessary and should promote inclusiveness, transparency, efficiency, accountability, and legitimacy. Indeed, the global challenges could not be addressed without the collective voice of nations.
She said a global plan to restore worldwide growth should be based on four pillars: stabilizing global finance; countering the global recession; deploying resources to support demand and sustaining investments in developing countries; and laying the foundation for a sustainable recovery. South Africa’s participation in international efforts, such as the Group of Twenty, was premised on those pillars. The economic crisis showed that the current structure and instruments of multilateral financial institutions were systemically fragile and largely inadequate in addressing the impact of the crisis. South Africa had, thus, called for a significant increase in the International Monetary Fund’s resources, the recapitalization of multilateral development banks, and fundamental and far-reaching governance reforms at the Bretton Woods institutions.
She said further interventions were needed in four key areas: balance of payments support when capital flows suddenly stopped; support for counter-cyclical policies and for financing planned investments targeting increased productivity and social equity; trade finance support to keep world trade from drying up; and action on commitments to boost concessional support to low-income countries. Global trade should also be reinvigorated and the global trading system rebalanced, so that it no longer favoured the most developed countries.
Turning to the impact of the crisis on African countries, she welcomed recent announcements for the allocation of additional resources to augment trade financing and urged donors to urgently implement their commitments. The African continent remained committed to the implementation of sound economic policies and the establishment of strong institutions. Still, global action was needed to ensure that the gains of the last decade were preserved, and African countries needed the space to implement counter-cyclical policies. Investment in infrastructure was also needed, as was the provision of new and additional resources to sustain growth. Partnerships with Africa should be made using the African Union’s New Partnership for Africa’s Development (NEPAD).
STEVE WILLIAM ABANA, Minister for National Planning and Aid Coordination of the Solomon Islands, speaking in his capacity as President of the African, Caribbean and Pacific Group, said that, at the onset of the crisis, some analysts believed that low-income countries would not be affected. That idea had proven to be completely wrong, with recent studies showing it had severely impacted African, Caribbean and Pacific countries, with growth prospects having fallen sharply. The effects had spread wide and deep, and were marked by a drop in export earnings, declines in foreign direct investments, decreased remittances from migrant workers and reductions in official development aid. The crisis had already given rise to unemployment, increased hunger and higher mortality rates.
It was most urgent to find solutions that focused on countering the effects of the crisis, he said, adding that they must also help avoid the recurrence of other crises. Everything must be done to restore confidence and growth; protect the needs of the poor; provide support to safeguard economic gains; restore confidence in the financial sector; promote global trade; and reform the global financial and economic architecture.
He said efforts must be urgently focused on areas where the need was most pressing: in poor countries. African, Caribbean and Pacific States needed substantial resources to regain pre-crisis growth levels. At their national levels, various measures had been implemented and reforms were underway. However, Governments did not have adequate capacity to react and were in dire need of international assistance. He welcomed the recent decision at the Group of Twenty meeting to increase the resources of the International Monetary Fund, among others, for the financing of development in poor countries.
He appealed to international financial institutions for a flexible allocation of agreed resources, which should be provided in addition to traditional official development aid. With less than one year before the expiration of the Paris Declaration on Aid Effectiveness, there was a need to speed implementation of the Accra Programme of Action. The international financial structure was significantly flawed, and any reform must aim to give low-income countries increased representation. The United Nations must play a strong role as a catalyst in the reform of public goods. In closing, he said he firmly believed the world would emerge from the crisis, if the resources announced were swiftly and wisely used.
LE DUC THUY, Minister, Chairman of the National Financial Supervisory Commission of Viet Nam, said the present crisis had broken out at a time when globalization was deepening. Therefore, the response required broad and concerted action. To that end, apart from national-level initiatives, world Governments had cooperated in multilateral regional and global frameworks, including the G-20, which had held its second summit on the crisis in April. Now such efforts must be translated into realities to help jump-start growth, spur hiring and restore confidence and trust in the global economy.
While Viet Nam concurred with the draft outcome documents to be adopted at the end of the Conference, he drew the Assembly’s attention to several specific issues the delegation wished to highlight. He said developing countries had been hardest hit by the economic downturn, and in addition to stimulus initiatives and proposed reform of global financial mechanisms, the international community must stand by its prior commitments, including those pledged at the London G-20 Summit and the Doha Follow-up Conference on Financing for Development. Reform of the global financial and monetary system was vital to resolving the root causes of the current crisis. Viet Nam believed that such reform must include relevant mandates, set effective norms for cooperation, and ensure more equal participation of developing countries.
He also believed the current financial turmoil posed new challenges for the United Nations to meet the short- and long-term needs of its Member States, especially regarding issues such as environmental protection, food security, clean energy, health and education. Viet Nam was interested in proposals that led to the development of road maps or mechanisms that could improve the efficiency of United Nations agencies. It also wanted to see closer collaboration between the United Nations and the international financial institutions towards mobilizing additional resources to help developing countries weather the crisis and achieve agreed development goals.
CARLOS MORALES TRONCOSO, Minister of External Affairs of the Dominican Republic, said Member States were here today in response to the universal call of the United Nations to face, together, the world economic and financial crisis. It was a crisis that had originated in the collapse of the speculative real-estate bubble and infected all the other segments of the financial sectors of most developed countries. While it had severely reduced investments in, and remittances to, developing countries, it had also deflated other bubbles in the markets of basic products. Nevertheless, it was a crisis that should be overcome, so countries could again begin to export and put themselves on the path to sustainable human development.
“Today we can say with satisfaction that we have before us a reasonable response coming from this group of 192, which complements the measures formulated by the G-20,” he said. The outcome document committed rich and poor countries alike to addressing the human costs of the crisis and returned to fiscal policy the central role it should never have lost in development efforts. It also reaffirmed the commitments made in support of developing countries’ financial needs for liquidity, so as to adopt counter-cyclical measures. It further loosened conditionalities that had, up until now, done little to guarantee development. It also recognized the importance of good governance and favoured the regional sphere as the ideal arena for different measures to end the crisis. While the crisis had been costly for all, a new air could be felt.
He stressed the need to act to ensure the relevance of United Nations bodies -- particularly the General Assembly and the Economic and Social Council -- in directing the policies and action of the multilateral and regional financial institutions. Protectionist temptations should also be avoided and the world’s confidence in the financial markets returned through regulation without exception, where such regulation did not restrict their innovation. A new era of cooperation in tax matters should be fostered, while illicit financial flows were curbed.
Turning to an additional initiative, he reiterated President Leonel Fernandez’s proposal, made at the recent meeting of beneficiaries of the Petrocaribe programme, that other oil-exporting countries grant their clients in developing countries comparable financial conditions. As a beneficiary of Petrocaribe, the Dominican Republic had had a highly positive experience, as the high international price of oil last year had not hit its balance of payments that hard due to the significant reduction in its oil bill. It would not be long before the price of oil recovered from its current levels, and he called for the adoption of a General Assembly resolution that replicated the Petrocaribe programme in favour of importing developing countries.
RODRIGO MALMIERCA DÍAZ, Minister of Foreign Trade and Foreign Investment of Cuba, said the selfish and irrational neo-liberal financial recipes imposed on others by “the great capital” had proved unsustainable. In the wake of the current financial crisis, the challenges now before the international community were immense, and finding a collective solution was imperative not only for development, but for the very survival of the human race. He stressed that the people of the developing world were victims of a crisis that was being portrayed by the centres of power as merely a natural cyclic episode.
The reality, however, was that the crisis was structural and the main responsibility for addressing it fell on the major developed countries and the transnational corporations, which had “amassed large fortunes out of the suffering and poverty of vast majorities”. He said that, in essence, this was a “crisis of capitalism”, intensified by policies that promoted an economic model based on unsustainable production, consumption and distribution patterns. The international financial system must be totally restructured, as its current failures were not only due to deregulation. Indeed, the current system was anti-democratic, as its norms had been established according to the interests of a few industrialized powers.
He went on to say that developing countries and “less favoured majorities” in the industrialized world were, as ever, the most affected by the deepening crisis, the fallout from which included a credit crunch, massive job losses and sharp spikes in commodity prices. The prompt action taken to bail out bankrupt financial institutions contrasted shamefully with the meagre outlays for official development assistance. It was also shameful that the International Monetary Fund had been designated to map out the recovery when that organization had been created by the very powers that had sparked the crisis in the first place. He said that the Assembly, not the G-20 or other mechanisms, was the correct forum for crafting a democratic response in a transparent manner.
“Enough of the Bretton Woods Institutions that have impoverished our peoples and placed us in this serious global crisis,” he declared, saying the world was calling for a truly democratic financial architecture. The current Conference must define the mandates, duties, governance structures and management procedures of the new international monetary and financial institutions. Likewise, it must also lead to the creation and promotion of financial mechanisms that were not dependent on the economic stability, legislation or political decisions of only one country. He added that the new system must also recognize that developing countries required special and differential treatment and its institutions must be subordinated to the United Nations.
YANG JIECHI, Minister for Foreign Affairs of China, said that as the world’s most universal, representative and authoritative intergovernmental organization, the United Nations was an important mechanism in promoting international economic and development cooperation. China supported the Organization’s playing a bigger role in tackling the international financial crisis and hoped a win-win spirit would allow for the exploration of effective ways to counter the crisis and promote common development.
Yet, as the financial crisis continued to unfold, resources for international development cooperation were dwindling, he said. Although developing countries had not caused the crisis, they had been the hardest hit. External demand was falling, trade was contracting, foreign investment was being withdrawn and remittances were declining. Developing countries also faced difficulties in accessing financing from abroad and it was now indisputable that developing countries had suffered a serious setback in their overall development. Should the development situation worsen, the entire world would feel the pinch, as global demand continued to decline and the pace of global economic recovery slowed. The international community should, therefore, look at the development issue from a broader perspective and in a wider context. Indeed, developing countries were an important force in addressing the crisis and achieving a global recovery.
To that end, he suggested efforts should be made in five areas. First, macroeconomic policies should be coordinated and should consider their possible external impact. Any negative spillover effect on developing countries should be avoided. Second, the growth of international trade should be promoted and trade protectionism avoided. Markets should be opened to developing countries, particularly the least developed, by lowering or exempting tariffs and achieving the goals of the Doha Round of trade negotiations. Third, international development cooperation should be intensified, with developed countries implementing the Monterrey Consensus. They should also act further to cancel the debt of developing countries. Fourth, South-South cooperation should be deepened through greater trade, investment and cooperation among developing countries. Fifth, a just, fair and orderly international financial structure should be developed, in which the International Monetary Fund (IMF) provided just and balanced supervision for the macroeconomic policies of its members. A diversified and international monetary system was also needed.
Continuing, he noted that since the outbreak of the international financial crisis, China had called on the international community to focus more on development. It had provided development assistance to some countries to the best of its abilities. It had also supported the need to increase the IMF’s resources by purchasing its bonds. Further, China had been actively involved in developing a reserve pooling arrangement and Chinese support would account for over 30 per cent of the fund’s total $120 billion. It was ready to work with the rest of the international community to recover from the crisis, contribute to the attainment of the Millennium Development Goals and build a harmonious world of enduring peace and common prosperity.
ZHIVARGO S. LAING, Minister of State, Ministry of Finance, for the Bahamas, said his delegation believed the Conference should be only the beginning of a process leading to the overhaul of the international economic and financial system. “What we need is a system that will reduce global systemic risks and inefficiencies that arise from localized regulatory inadequacies [and which] will promote greater equality in development among the economies of the world,” he said. Such a system would help ensure an international environment within which all countries could successfully pursue sustainable development.
Turning to the situation in his country, he said the current crisis had created serious macroeconomic, social and human development challenges. The small economy of the Bahamas was heavily dependent on the performance of large developed economies and, to that end, it was experiencing one of the most difficult tourism seasons on record. By the end of 2008, major hotels and resorts had begun to experience historic lows in occupancy rates and advance hotel booking remained soft, offering little sign of a quick recovery. As a consequence, the tourist sector had been forced to lay off hundreds of workers and cut the hours of hundreds more. The uncertain climate meant that might remain a problem for some time.
He went on to say that, while the country’s own financial system remained sound, the international financial services it offered had taken a hit, as some developed countries had erroneously blamed the current financial turmoil on small offshore financial centres. He said the Bahamas remained fully committed to cooperation with others to ensure a financial system free from criminal elements and meeting the evolving tax norms and standards. While the country had been proactive in addressing the challenges posed by the crisis at home, including by providing targeted assistance to those especially exposed, the Bahamas was of the view that the international response must include, among other things, a serious assessment of the international financial institutions, ways to level the playing field with respect to the targeting and treatment of small offshore jurisdictions, enhancing cooperation and fairness, and a greater role for the United Nations.
ASHNI SINGH, Minister of Finance of Guyana, said that, more than at any other time in history, the people of small countries such as those of the Caribbean were convinced of the inextricable links between the stock market in London and the number of tourists that will visit their islands and resorts; between automobile sales in Tokyo and the livelihoods of the workers in their bauxite mines; and between speculative trading of commodity futures in Chicago and the prices that small farmers in their villages will pay for fuel. In those ways, the global economic crisis had manifested itself in the Caribbean’s small, vulnerable economies. Export prices of key commodities had been affected, oil prices remained high, activity in the tourism sector had been reduced, foreign direct investment had slowed and remittance inflows ebbed.
He said Guyana’s Government had been proactive in responding with policies aimed at implementing an accelerated public investment programme, particularly in enabling physical infrastructure, promoting labour-intensive economic activity, facilitating diversification and improving competitiveness. Its financial system remained strong and liquid. Nevertheless, the available policy space was limited and the potential implications of external events pervasive. That reality should define the cardinal principles needed to stimulate the global economy, fight poverty and promote development in the immediate term and the mechanisms to guard against future crises in the medium- and long-term.
He said that actions taken by the Group of Twenty had been noted, as the success of their interventions would determine and be measured by the timeliness and fullness of the global recovery. Also appreciated was the decision to increase the resources available to countries in distress through the International Monetary Fund and the multilateral development banks, as well as the support expressed for reforming assistance-delivery mechanisms. The success of those measures would depend on the promptness with which the additional support was delivered and effectively used, and the depth of the reforms. If the past were to be a guide, there had been no shortage of declarations of good intent. But, with one-sixth of the world’s population undernourished, the international community could not afford to dally.
He went on to stress that a post-crisis multilateral architecture informed by yesterday’s lessons, responsive to today’s realties and relevant to tomorrow’s challenges would be needed to avoid the onset of future crises. Further, the United Nations should play an expanded role in development issues. That could only happen if the Economic and Social Council became more politically meaningful. A closer working relationship between the United Nations and the multilateral financial institutions would also be critical. Moreover, the mandates of the International Monetary Fund and the World Bank needed revisions, and reforms should be undertaken to infuse those institutions with legitimacy and representativeness. In closing, he stressed the current economic situation must not allow the world community to be distracted from the equally urgent climate change crisis. “The quest before us is a new philosophy of development based on a more just and equitable order,” he said. “Ultimately, the aspiration to reform must be accompanied by the political will to deliver.”
MARK MALLOCH BROWN, Minister of State for Africa, Asia and the United Nations of the United Kingdom, said he spoke today as part of a Government that had made the most significant commitments in its history to the Millennium Development Goals and which was delivering on those pledges every day. He also spoke as a European in a European Union that was making global poverty reduction a primary objective of its international action, and as a lifelong supporter of strong international institutions that were able to support all in times of crisis.
Since the financial and economic crisis began last year, nations had come together in various groupings to decide on a response: the United Nations had met in Doha, Qatar, while the Group of Twenty had held two summits. The Group of Eight would meet shortly in Italy. “We have a good understanding of the origins of the crisis and know how serious its impacts are,” he said. In Washington, D.C., the Group of Twenty set out measures needed to stabilize the financial system and rebuild confidence. In London, it agreed on how to stimulate developed and emerging economies, and on a $50 billion package to support low-income countries. He was proud of what the British Prime Minister was able to do to expand African and Asian representation at the summit.
The crisis had affected countries and regions in different ways, he explained, saying there was a need to restore global growth through coordinated stimulus and strengthened regulation. There were lessons about the importance of both regulation and the market, and there were choices for all in getting the balance right between them. In that context, he underscored the need for strong international financial institutions to increase liquidity and promote growth. While the Bretton Woods institutions had rarely been popular, they had never been so necessary and had responded in a transparent way to demands placed on them. Their ongoing reform must be carried through to ensure that all countries were equitably represented.
He said the world needed a more effective United Nations. At the country level, he encouraged streamlined operations that coordinated analysis and response effectively across the system. At Headquarters, “we must be ready to take bold action to reshape funds and programmes and agencies so that they fit today’s challenges”, he said. United Nations members had to provide resources, commit to action -– and take that action –- and share power, so that all would be better off. That also applied to reforms at national levels, efforts to achieve agreement on climate change in Copenhagen, and pledges to increase official development assistance. The political energy brought today would fade unless delegates used it to build momentum to tackle big challenges. “Divided we will fail,” he said. Together, countries would achieve the reforms they had long worked for and provide leadership their communities needed to end global poverty.
JOÃO GOMES CRAVINHO, Secretary of State for Foreign Affairs and Cooperation of Portugal, said that while the Conference must of course help plot the course to financial stability and recovery as part of a broader international effort, it must also send a message of optimism and collaboration. That view would be best expressed by an outcome document that was accepted by all Member States, and one which sent a clear signal that the people of the world could look to their leaders for action. Delegations must build on the initiatives that had been implemented nationally and regionally to effectively address the crisis and create the conditions to ensure a global financial and economic system that functioned properly.
He went on to say that Portugal was committed to concerted action to reduce the impact of the crisis at all levels. It would honour its commitments regarding official development assistance, aid-for-trade, and duty free, quota-free access to goods from least developed countries. He said the current crisis must be seen as an opportunity for hastening progress towards inclusive and ecologically efficient societies. The best way to do that was to ensure that people were at the centre of recovery plans.
He said that a new and strengthened global financial system must be based on the principles of accountability and transparency. It was necessary to take concrete and determined measures to improve regulation and oversee non-cooperative and non-transparent jurisdictions, in combating tax evasion, money laundering and terrorist financing. To that end, Portugal supported the participation and engagement of emerging economies and developing countries, including through regional groupings or institutions, in the current discussions regarding reform of the global financial architecture. He said it was important to press ahead with reform of the International Monetary Fund so that it better reflected the weight of the current world economy. Such reform should be broad based and should address “difficult issues” such as making that organization more efficient and enhancing its decision-making procedures.
* *** *For information media • not an official record