|Department of Public Information • News and Media Division • New York|
Conference on World Financial
and Economic Crisis
8th & 9th Meetings (AM & PM)
DISMANTLING OF PROTECTIONIST TRADE MEASURES, FULFILMENT OF AID PLEDGES AMONG
ISSUES, AS DEBATE CONTINUES AT UN CONFERENCE ON WORLD FINANCIAL CRISIS
Hears from More Than 25 Speakers, Following Friday’s Adoption of Outcome Document
Struggling to recover from steep declines in export earnings, tax revenues and overall economic growth, delegates from developing and middle-income countries alike today pressed rich nations to dismantle protectionist trade measures and fulfil pledges for official development assistance to avert a humanitarian catastrophe, as the plenary debate of the Conference on the World Financial and Economic Crisis and Its Impact on Development continued at United Nations Headquarters.
The Conference, which began on 24 June, has brought together world leaders to assess the worst global economic downturn since the Great Depression and identify emergency and long-term responses to mitigate its impacts. On 26 June, delegates adopted a sweeping outcome document that contained recommendations to fight the recession and establish safer and fairer financial practices. Among other measures, they called for more resources for social protection, food security and human development, and follow-through on commitments for increased development assistance.
Throughout today’s debate, representatives of Governments and observer missions stressed that many open, export-dependent economies were still suffering the impacts of sustained high food and fuel prices, and battling the severe impacts of climate change that included drought, flooding and soil erosion.
The representative of Belarus, one of 27 speakers today, told delegates that new protectionist measures brought particular harm to small, export-oriented countries. They had been used not only to protect domestic markets but to pressure other nations -– and that was unacceptable. He urged the United Nations and the World Trade Organization to ensure the early cancellation of protectionism measures, and United Nations agencies particularly to help affected countries deal with consequent losses.
The situation was especially severe in Tajikistan, whose delegate said that economic growth for the first four months of 2009 had reached only 2.9 per cent, versus an average of 8 per cent during the last eight years. Exports had declined by 41 per cent in the first quarter and imports by 11 per cent. While he appreciated policy responses taken by countries worldwide, he urged developed countries to ensure that their actions did not harm -- but helped -- countries in neighbouring and interconnected regions. He asked the United Nations to include in the agenda of future reforms the establishment of an initiative or fund to support landlocked countries.
Congo’s representative said that, while his Government had seen progress over the last ten years on various fronts, the global financial meltdown had forced it to review its growth targets. The forestry sector had contracted by 50 per cent, while Congo’s oil dependence, debt burden and high production costs were all major challenges that the Government sought to address.
Shedding light on the macroeconomic situation, the delegate of Cape Verde said forecasts expected a 1.7 per cent drop in global gross national product and a 2.1 per cent slowdown in income. Behind such figures lay a human tragedy that involved a loss of hope. The situation threatened countries’ ability to meet the Millennium Development Goals, particularly for women and children, and could worsen social tensions. It would be illusory to expect any country to face such challenges alone and Cape Verde -– a young, dynamic country -- risked losing its middle income economy status.
“We are at a critical juncture that requires rapid, decisive and coordinated action,” Afghanistan’s delegate said. The causes of the crisis had to be addressed and all had to work together to prevent a tenuous situation from becoming a social and human disaster. As a post-conflict, least developed and landlocked country, Afghanistan would be pressed to implement its national development strategy and achieve its Millennium Development Goals without intensified global support.
He saw the potential of North-South collaboration, as well as that between countries in the South, saying that Afghanistan could testify to the value of various types of partnerships. Cooperation could best be accomplished by improving international and regional institutions, supporting global and regional cooperation and increasing the effectiveness of such efforts in recipient countries.
Agreeing, the Secretary-General of the Inter-Parliamentary Union said the health of the world economy should not be measured simply in terms of stock market recovery, but in terms of its ability to provide jobs that valued the dignity of work. The debate over good governance of international financial institutions should involve making them more responsive to people’s real needs, and opening them to greater parliamentary scrutiny and support.
He insisted that the crisis was one that had been foretold. “We cannot claim to have been ignorant”, he said. At its most basic level, it concerned morals and ethics. At a very minimum, the response must be one in which “business as usual” was abandoned, and a better equilibrium between the voice of society, the role of the State and the dynamics of the market was found.
Also speaking in today’s debate were Bolivia, Swaziland, Tunisia, Ghana, Eritrea, Panama, Ethiopia, Moldova, Iceland, Albania, Democratic People’s Republic of Korea, Croatia, Montenegro, Jordan, Mauritania, Nepal, Malawi, and Trinidad and Tobago.
Representatives of the Permanent Observer Mission of Palestine and the Holy See also delivered remarks, as did a representative of the Common Fund for Commodities.
The Conference will conclude its debate tomorrow, Tuesday, 30 June. After, the General Assembly will take up the reports of the Fifth Committee (Administrative and Budgetary), and take action on a draft resolution on the situation in Honduras.
The General Assembly today met to continue the plenary debate of its Conference on the World Financial and Economic Crisis and Its Impact on Development, which aims to identify emergency and long-term responses to mitigate the impact of the crisis, especially on vulnerable populations, and initiate dialogue on the transformation of the international financial architecture. (For days one through three of the Conference, see Press Releases DEV/2747, DEV/2748, DEV/2749, DEV/2750, DEV/2751, DEV/2752, DEV/2753 and DEV/2754.)
RAYMOND SERGE BALE ( Congo) said the crisis provided an opportunity to review the entire global financial system and create a new vision of life based on solidarity. Recalling that the Group of 20 recently met in London to bring lasting solutions to the present situation, he said today’s Conference must establish a new starting point for nations, particularly developing nations. In that context, he welcomed measures taken in intergovernmental discussions on the outcome document. All parties, including people themselves, must be mobilized on the basis of coordinated solidarity, and he expressed hope that the trend would continue. “Reshaping the global financial system is everybody’s business,” he said.
He said Africa was experiencing the impacts of a crisis it did not create, just at a time when it was beginning to see progress on various issues. Export revenue was a major lever for nascent African economies. They were vulnerable because of the nature of trade with developed countries. In Congo, the forestry sector had contracted by 50 per cent. Its dependence on oil, its debt burden and high production costs were major challenges that the Government sought to address. Progress had been seen in the last ten years, but the crisis had forced Congo to review its growth targets. Also, protection of the Congo Basin was vital to sustainable development of the country and adequate funding was needed to preserve it. The United Nations must play a key role in coordinating international development.
PABLO SOLÓN-ROMERO ( Bolivia), first condemning the coup d’état in Honduras, said today’s Conference was a triumph of democratic participation. Indeed, the global financial crisis was structural and systemic, and it called for far-reaching measures. A few regulatory measures did not constitute a solution. For capitalism, there was no Mother Earth -- just raw materials. It generated luxury and waste for a few, while many died of hunger. Life itself had become a good and natural disaster a source of business. There was a choice at hand. Poor countries could not continue to pay for rich countries’ serious errors -- money was flowing out of them towards the rich nations. “This is unacceptable”, he said. Developed countries must pay the bill for promoting today’s disaster.
To compensate poor countries, he said developed nations must contribute an additional 1 per cent of gross domestic product to a fund for developing countries. They also needed to open multilateral trade immediately. The North must stop promoting Free Trade Agreements that only led to social upheaval. They must open their markets and immediately cancel the debt of poor nations. Developing countries must stop financing the North and use the reserves to leverage the crisis to attain sustainable development. Finally, it was essential to guarantee poor nations the space needed for commercial, trade and financial measures to attain their rights to food, water and all basic services. “We cannot confuse the protectionism of sharks with the protectionism of sardines,” he said. Also, there must be a full restructuring of the World Bank and International Monetary Fund. They could not reform themselves. The United Nations must play a determining role in their reform. In closing, he said the free will of the market could no longer be allowed to trigger instability. The world needed new institutions, based on solidarity, social justice and the rights of Mother Earth.
ABDUJABBOR SHIRINOV ( Tajikistan) said the country’s economy faced serious difficulties, as economic growth for the first four months of the year was 2.9 per cent, compared with an average of 8 per cent during the last eight years. In the first quarter of 2009, exports had declined by 41 per cent and imports by 11 per cent, while remittances were down by more than 30 per cent. The country had also experienced additional difficulties because of the global energy and food crises.
It would be very difficult for Tajikistan to deal with the current problems without assistance from the international community, the United Nations and other global and regional financial organizations and institutions. Tajikistan welcomed the recommendations of the Commission of Experts and, while it appreciated the policy responses taken by countries worldwide, he urged developed countries to ensure that their actions did not harm, but helped countries in the neighbouring and interconnected regions. For example, developed countries subsidized cotton producers, which harmed cotton producers from poor countries like his own. He called on developed countries to stop that practice.
He asked the United Nations to include in the agenda of future reforms the establishment of an initiative or fund to support landlocked countries and to see a rapid replenishment of the initiative or fund from the international donor community, he said. He supported the outcome document.
JOEL M. NHLEKO ( Swaziland) said small, open and vulnerable developing countries like his own, while not directly affected by the financial crisis due to their weak integration into world capital markets, had been impacted more directly by the contraction in advanced nations. Such secondary effects were as yet being unravelled, implying that the poorest countries had not seen the worst of the turmoil. They were now contending with falling exports, commodity prices, balance of payments shortfalls, sliding access to trade and diminished foreign direct investment. Most developing countries lacked the individual financial capacity to either affect the system or provide the necessary stimulus to jump start their economies.
While he appreciated recent efforts of the Group of 20, it was only fitting that the United Nations hold today’s Conference. The decisions taken would consolidate what was being done by other actors in other forums. In that pursuit, developed countries should steer the “global ship out of these perilous waters”, taking measures to boost global demand, stabilize financial markets and unlock credit markets. They should also fulfil official development commitments. Developing countries could not sit idly by -– they had to deepen economic and structural reforms, boost private savings and maintain political and macroeconomic stability. For its part, Swaziland’s poverty reduction strategy and action plan rested on two pillars: investing in infrastructure and enhancing health delivery and skills development. In closing, he said developed and developing countries alike must do whatever possible to boost economies and arrest the slippage into abject poverty for the most vulnerable.
JALEL SNOUSSI ( Tunisia) said the global financial crisis showed the failure of a certain model, and it was an unprecedented crisis that required an unprecedented response. It had taken place at a decisive stage in the process of the Millennium Development Goals (MDGs), which had been left on the back burner since the financial crisis had begun. The international architecture needed to be revised. It needed to be reviewed to make it more open, transparent and inclusive and to make the international economy became more stable.
In such an environment, it was crucial for States to coordinate their efforts in economic and political affairs, he said. The United Nations had the necessary legitimacy and should be able to play a governing role, and a more significant role, in the international financial world. The Economic and Social Council could serve as a central mechanism. It was necessary to extend control over the financial bodies that created risk. Further, more rigorous standards must be created for risk assessment and the use of complex financial products. Tunisia also supported the creation of a follow-up mechanism for the Conference
LESLIE KOJO CHRISTIAN ( Ghana) said the crisis presented significant challenges for developing countries, especially those in Africa. In fact, the crisis represented a serious setback for the African continent at a time when it was gradually, but steadily making progress in economic performance and management. One worrying, but likely consequence of the crisis for all developing countries was the reduction of internal and external finance, which posed difficulties for funding health, education, infrastructure and nutrition programmes. The key challenge facing Africa, therefore, was determining how to manage the current crisis, while ensuring development progress was not reversed.
He noted that among the policy responses to the crisis, African countries had taken steps to mitigate its impact, including through interest rate reductions, recapitalization of financial institutions, increasing liquidity to banks and firms, fiscal stimulus packages, trade policy changes and regulatory reforms. Some had set up task forces and committees to monitor the crisis. In Ghana restrictions had been imposed on travel budgets, official procurement and the creation of new posts. Nevertheless, financial constraints continued to limit responses and the international community needed to provide appropriate assistance to prevent a humanitarian catastrophe. Among other things, rich countries should make more efforts to meet existing aid and debt reduction commitments. Disbursements should be accelerated and access to existing finance facilities improved. The International Monetary Fund should put in place a new facility with relaxed conditions to support African economies during the crisis, and early capital to the African Development Bank should be increased. The International Monetary Fund’s (IMF) gold reserves should be sold to release additional resources.
ARAYA DESTA ( Eritrea) said his delegation agreed with the statement made by Bangladesh on behalf of the least developed countries. The cause of the financial crisis was rooted in human greed and had gone on without mercy to cause colossal damage around the world. The impact of the crisis compounded the recent crises in food and fuels and had severe ramifications for the poorest and most vulnerable populations. The crisis had rapidly spread to developing countries and emerging market economies, which had been impacted by lower export revenues, less tourism, increased unemployment, decreased capital flows and fiscal budgetary constraints.
It should be emphasized that the current crisis had triggered a slowdown in global economic growth, which showed itself in a demand–driven fall in international trade, falling commodity prices, declining remittances, shrinking foreign direct investment, and the potential decline of official development assistance. Those conditions were added onto the ongoing global food crisis, volatile energy prices and climate change challenges. The Conference should lead to immediate collective actions, which should include a strong follow-up mechanism and the reform of the international financial institutions, especially governance of the International Monetary Fund.
YAVEL FRANCIS LANUZA ( Panama) said the global economic and financial imbalances had directly affected developing countries. The call of today’s Conference reflected the urgency of in-depth discussion on the situation and, in that context, she recognized the legitimacy conferred on the United Nations. Indeed, the Conference was an important step on the right path and it should produce recommendations for countries and regions without creating a “single recipe”. She also expressed hope that it would strengthen discussions on the causes of the crisis. The time had come to stress the importance of strengthened financial systems.
She said diversified financial services played an important role in Panama, and the country had established solid regulatory institutions. The financial and trade interrelationship was increasingly complex, and made it necessary to use effective supervision mechanisms. Developing economies had been impacted by multiple and interlinked commercial transactions with trade partners, a drop in basic goods prices and contraction of financial credit. More than ever, all forms of cooperation were positive, not only in the North-South axis, but between developing economies. Without prejudice for the need to adopt an adjustment mechanism, she said nations must avoid implementing measures that would reverse progress in commercial and trade relations. The growth and well-being of citizens were the ultimate goals of country actions. In that context, she trusted that the United Nations’ role would continue to develop in a prominent way and complement that of other international organizations. In closing, she rejected the destabilization that had taken place yesterday in Honduras.
RETA ALEMU NEGA ( Ethiopia) said the global economic crisis had become a human development crisis and was pushing millions of people back into poverty and placing the survival of the poor and vulnerable groups at risk. The prospects of reaching the Millennium Development Goals had also been compromised and their achievement looked more distant than ever. The African continent was becoming the victim of the consequences of the crisis, which was testing the continent’s recent progress in various social and economic areas. The collective efforts of the international community to address those challenges had been stalled.
Ethiopia believed it was time for the international community to take concrete measures to address the global economic crisis, including committing to the provision of additional resources to poor countries. The delegation fully supported the creation of the Global Economic Coordinating Council, with adequate representation of developing countries’ practitioners and policy-makers. The United Nations should continue to play an important role in addressing this and possible future crises, and it was urgent to strengthen the coordination and coherence of its activities among its agencies and other international Organizations.
ANTONIO PEDRO MONTEIRO LIMA ( Cape Verde) said his country was suffering the effects of a crisis for which it was not responsible. Without sustained global efforts, it could find progress made in the last thirty years called into question. That was unacceptable and he urged the international community to understand the causes of the crisis, so as to avoid a repeat. He said market deregulation and liberalism were among the causes of the turmoil, which had led many countries to break with past practices. Countries must act to avoid an unprecedented humanitarian crisis. Without necessary measures -- notably on the substance of the problem -- more than 53 million people in 2009 could join the hundreds of millions who already lived below the poverty level. Forecasts showed an expected 1.7 per cent drop in global gross national product and a 2.1 per cent slowdown in income. Behind such figures lay a human tragedy that involved a loss of hope.
He said that situation would impact countries’ ability to meet the Millennium Development Goals, particularly for women and children, whose food needs were particularly threatened. It also could worsen social tensions, and leaders must act in a determined way to diffuse extremism. In addition, there should be more transparency in the United Nations and global financial institutions. Indeed, protectionism would condemn millions more into poverty. Cape Verde, an archipelago nation, was particularly vulnerable to soil erosion and desertification. It produced only 20 per cent of its food needs and could cultivate only 10 per cent of its land. Despite that, the nation was based on democratic governance, an economic system free from corruption and a good social system. Its dynamism was due to pragmatism and strict financial management. However, the crisis had reduced foreign direct investment and a drop in real estate, tourism and remittances. It would be illusory to expect any country to face such challenges alone. Cape Verde risked losing its middle income economy status. “We are a young State”, he said. After the current crisis, it would grow stronger and go further.
ALEXANDRU CUJBA ( Moldova) aligned himself with the statement made by the Czech Republic on behalf of the European Union, saying the scale of the crisis and extent of the meltdown were underestimated and the crisis went across all borders and impacted emerging markets. It had impacted the real sector of most States, had spread into all sectors and had a human face, impacting Wall Street and Main Street. The Millennium Development Goals had been sidetracked and it was necessary to achieve those goals. He welcomed the commitment of development assistance that had been made during the Conference.
The crisis should bring together the leaders of the major economies to stabilize and secure the global economy. The speakers in the hall had described the crisis as the most severe crisis since the Great Depression of the 1930s. Moldova had experienced growth and poverty reduction in recent years, and now its people were being pushed back into poverty and vulnerability. The recent surge in food and energy prices, and natural disasters, such as the 2007 drought and 2008 flood, had diverted resources from national programmes. Even with that, the country registered 7.2 per cent growth in gross domestic product (GDP) in 2008. But, during the first quarter of this year, its economic figures declined and tax revenue declined. The country’s gross domestic product dropped by 6.9 per cent during the first quarter of this year, compared with same period of 2008. Only through common efforts and the genuine contribution of all members of the “G-192” would the international community succeed, he said.
ANDREI DAPKIUNAS ( Belarus) objected to new protectionism measures that had been taken under the pretext of protecting consumers. Such behaviour brought particular harm to small, export-oriented countries and, ultimately, would lead to a dead end. Protectionist measures had been taken not only to protect domestic markets, but to pressure other nations -– and that was unacceptable. Given that, he urged the United Nations and the World Trade Organization to ensure the early cancellation of protectionism measures, while United Nations agencies especially should help affected countries to deal with losses stemming from protectionist measures. He called the Secretary-General to work with the World Trade Organization and the World Bank to implement decisions taken by the Chief Executives Board.
He said the crisis also provided a unique opportunity to move towards sustainable development. Vital to that was access to modern energy sources. Without such access, it would not be possible to achieve a high level of human development. Access to modern energy sources was needed to ensure high quality health and education services, and to deal with climate change. He called on the United Nations to develop an integrated energy agenda. With the World Bank, the Organization should support countries with measures to boost energy efficiency, energy savings and new and renewable sources of energy.
EMIL BREKI HREGGVIðSSON ( Iceland) said the experience of his country, which was one of the first to be caught in the world financial storm in 2008, underscored the need for the crisis to be resolved in a collective manner. Together, the international community should work constructively and resolutely to promote sustainable recovery, taking the human dimension into account at both the national and the international level. Iceland believed that the active participation of the United Nations and wider cooperation with the Bretton Woods institutions was essential to address the challenges facing the world. It supported reforms already under way within the international financial institutions, which aimed for more equitable representation and more flexible instruments for countries in need. Closer cooperation would also be needed on financial regulation and supervision to mitigate future crises, and must be complemented by greater political commitment to implement recommendations made by the international financial institutions. Iceland was also strongly committed to concluding the Doha Round of trade negotiations and called on all countries to observe pledges to avoid protectionism.
He further stressed that all efforts should be made to protect the poor and vulnerable and to keep the Millennium Development Goals on track. Accountability at all levels should be ensured, while aid effectiveness should be harmonized and aligned through the application of the Paris Declaration and the Accra Agenda for Action. With two thirds of the increase in world energy use over the next 25 years expected to come from developing countries, access to clean and cost-effective energy resources would be essential to poverty reduction, and the transfer and development technologies for such new energy sources should be accelerated. Promotion of gender equality and women’s empowerment must also continue during these trying times. Indeed, harnessing women’s energy and talent was essential to economic recovery.
ADRIAN NERITANI ( Albania), aligning himself with the European Union, said the financial meltdown threatened to reverse “hardly achieved” development goals. Its spillover effects were due to mismanaged globalization in an increasingly interdependent world. The formulation and enforcement of international standards might result in increased power for international institutions, which risked growing inflexible if they did not accommodate multiple rules of sovereign nations that competed in global markets. National response plans, in wide consultation with society and the private sector, were crucial to a collective global response.
He said the United Nations had the legitimacy to discuss important issues and effectively make decisions. It also had a comparative institutional advantage in the current architecture and its impacts could be far-reaching if countries pursued serious reforms. With that in mind, Albania had been implementing the “One UN” programme. It had blunted the initial impacts of the crisis, as its integrated financial markets and lower household and business indebtedness offered natural protection, and it continued to achieve positive economic growth. But, it was clear that such behaviour might not compensate for risks stemming from a less diversified growth, over-reliance on remittances and an insufficient culture of risk management in financial institutions. As such, the United Nations would remain indispensable in helping developing countries address multiple crises. He urged supporting the establishment of a global impact and vulnerability alert system.
ENAYETULLAH MADANI ( Afghanistan), delivering a statement by ZAHIR TANIN, said the global financial crisis had exacerbated other problems of energy, environment and food that particularly affected developing countries. Afghans had felt such stress first-hand, as rising wheat prices had threatened a deadly food shortage this past winter. Post-conflict countries, least developed countries and landlocked least developed countries faced unique challenges. As one of them, Afghanistan would find it difficult to implement its national development strategy and achieve its Millennium Development Goals without intensified global support. Insecurity caused by the Taliban in parts of the country, coupled with several recent natural disasters, had increased the need for resources, notably humanitarian assistance. As a result of the crisis, Afghanistan’s exports and imports, and reconstruction of infrastructure, transportation and health sectors had been severely weakened.
“We are at a critical juncture that requires rapid, decisive and coordinated action,” he said. The causes of the crisis had to be addressed and all had to work together to prevent a tenuous situation from becoming a social and human disaster. The United Nations had an important role in coordinating international cooperation and he encouraged countries to ensure that United Nations development agencies were fully resourced, particularly so they could increase technical and financial assistance to landlocked developing countries. He saw the potential of North-South collaboration, as well as that between countries in the South. Afghanistan could testify to the value of various types of partnerships. Cooperation could best be accomplished by improving international and regional institutions, supporting global and regional cooperation and increasing the effectiveness of such efforts in recipient countries. Urging donor countries to meet commitments made at the recent Group of 20 meeting, he also called on them to reduce official development assistance allocations outside the Government system, and rather channel funds through the core budget and trust funds. A lack of donor coordination, incomplete reporting and unpredictable aid were challenges to be addressed. He concluded by reiterating the call for an early and successful conclusion to the Doha Round of World Trade Organization trade negotiations.
SIN SON HO (Democratic People’s Republic of Korea) said the global economic and financial crisis was negatively impacting the political, economic, cultural and other areas of many countries, regardless of their level of economic development. The developing countries had suffered the most, which was the inevitable result of the capitalist economies. The implementation of the internationally agreed targets for development, such as the Millennium Development Goals, had been gravely challenged. His delegation valued the fact that the United Nations, the most comprehensive forum encompassing 192 Member States, considered such important issues as analyzing the causes of the current crisis and the reform of the international financial architecture.
The Democratic People’s Republic of Korea supported the outcome document, but was of the view that the document was not the complete and adequate solution to the current crisis. It constituted the initial stage in enabling the Assembly to proceed with an innovative negotiation process to boldly reform the international financial structure and promote world economic growth in a sustainable way. The only way to move out of today’s global economic and financial crisis was to replace the outdated system with a new international economic order that ensured equal sovereignty and the interest of all countries, he said. It was imperative to restructure the old international financial system that relied heavily on the United States dollar.
Archbishop CELESTINO MIGLIORE (Holy See) said it must not be forgotten that poor people in both the developed and developing world, who were suffering most, were also the least able to defend themselves against the crisis. This disparity threatened to undermine any long-term resolution to the crisis. Given the vulnerability of so many of the world’s poor, he endorsed the measures designed to help them in the short-term, as well as those longer-term mechanisms that sought, among other things, to stabilize capital flows in order to prevent a recurrence of the crisis. Since such long-term measures may require a stronger political consensus to enact them, they should focus on sustainability.
Continuing, he welcomed the commitments expressed by the G-20 in April to take steps to end the crisis, but said it was regrettable that so little of that aid targeted the world’s poorest. Further, that assistance should be offered with as few conditionalities as possible. The elimination of agricultural export subsidies could provide significant help to poor countries. Practicable and enforceable mechanisms aimed at transparency were also needed. Too often, in the past, economics had sought to remove values from its discussions, instead of aiming to create a more just financial system. In view of the fact that the marginalization of peoples could lead to, and worsen, conflicts, the poorest countries should be given priority in the crisis. An ethical approach should also be undertaken and should include the participation of civil society.
RANKO VILOVIC (Croatia) aligned himself with the statement made by the Czech Republic on behalf of the European Union and said it was unequivocally clear that the gravity of the financial and economic crisis commanded nothing less than globally coordinated efforts. Croatia welcomed the convening of the Conference as a timely forum to hear, for the first time, from the whole United Nations membership, especially developing countries. The Croatian Central Bank had taken several precautionary measures to maintain the orderly functioning of markets, avert destabilizing pressures on the national currency, and address the fallout of the crisis on the country’s financial system.
Given the urgency of the crisis, the United Nations had a central role to play in tackling the impact of the crisis on the world‘s most vulnerable people and had well established and achievable benchmarks set by the international community already in place. But, in order to provide meaningful development on the ground, the United Nations needed to streamline its operations and better coordinate and reshape funds, programmes and agencies. Croatia believed that the Conference should build on earlier comprehensive responses launched by the Group of 20 and others in their efforts to mitigate an extended global recession and promote global recovery, he said. This Conference reaffirmed for Croatia the important role that international financial institutions had to play alongside the United Nations, in responding to the systematic issues of the crisis. It also underscored the need to strengthen and reform them, to improve their effectiveness and enhance their capacity as a platform for international cooperation.
NEBOJŠA KALUDJEROVIĆ (Montenegro), aligning himself with the European Union, said the convening of the Conference was timely, as the financial, food and energy crises, the flu pandemic and climate change were negatively influencing economic systems and social equilibrium. Negative spillover effects could create volatile environments, and increase social, religious and cultural tensions that carried paramount political and security repercussions. Hard-earned progress on the Millennium Development Goals, and other internationally agreed development goals, risked being halted and even reversed, while the burden carried by the world’s most vulnerable populations was only increasing.
Thus, it was imperative to achieve international solidarity in addressing the needs of the world’s poor, placing development issues at the top of the global agenda, he explained. Echoing calls for comprehensive and coordinated efforts to support poor nations, he urged donors to fulfil their official development assistance commitments. The United Nations, as the only universal body, had the power to influence change. Montenegro recognized that better coordination among various agencies, funds and programmes was needed to achieve solid results. He welcomed the recent Group of 20 agreement, notably the $1 trillion package designed to mitigate the impacts of the crisis on developing countries. He urged using public-private partnerships to find innovative financing for development, and ensuring that policy measures promoted a green recovery. In that context, he reiterated the importance of reaching a post-2012 climate change agreement.
Turning to his country, he said Montenegro had experienced 9 per cent growth, but was heavily dependent on foreign direct investment and tourism. It had not been immune to the impacts of the financial crisis and, as such, had adopted an anti-crisis package that included a provision to intervene in the economy with guarantees for credit support. Other crucial elements included a reduction of personal income tax rates and the elimination of electricity market distortions. The goal of such measures was to safeguard the most vulnerable sectors of the economy. In closing, he said that only in coming together in coordinated action would the world be able to effectively address the impacts of the global financial crisis.
KHALID ABDULLAH KARAYYEM SHAWABKAH (Jordan) said the world economy was facing an acute crisis, the most severe since the 1930s, and that was a threat to development and sustainable growth and the achievement of the Millennium Development Goals. A multilateral response to the problem was crucial, because of the challenge in trying to limit its scope and duration and its economic, social and environmental impact. The crisis went beyond the capabilities of a single State, and it required a collective, multilateral response. The economies of the developing countries were not the cause of the crisis, but its victims, and those developing economies were less capable of adapting to the crisis. They had less capacity to inject liquidity into their financial systems or to create employment. They were more vulnerable to fluctuations in the market.
International financial institutions were suffering from distortions, he continued. The reform of those institutions was of the essence, to ensure the viability of the international economy in the future, he said. The international system needed bold reforms to create an economic system that ensured development for the weakest economies.
Jordan was concerned that the crisis put the developing States in a more vulnerable position and threatened to annul the development achieved so far, he said. The crisis might limit official development assistance (ODA) and prevent investments and financial transfers and affect certain sectors, such as tourism. As a country with a small economy, Jordan was more susceptible to economic fluctuations. Jordan would do what it could, within national and international frameworks, and hoped that the international solutions would restore confidence in the world economy.
ABDERRAHIM OULD HADRAMI ( Mauritania) said that, of all the challenges facing the United Nations and the international community, all 192 countries were unanimous on the financial crisis. That crisis exacerbated the situation of developing States, which were already weakened by the food crisis, and imperilled the lives of millions of people. The number of people who were chronically malnourished was forecast to rise to over 1 billion, while 55 to 90 million people would be plunged into poverty. Rising poverty and unemployment, coupled with rising prices and growing debt, would be crushing for developing countries, especially in Africa. The ability of those countries to access foreign investment and aid would become increasingly difficult. In that regard, the Millennium Development Goals would be undermined.
He said Mauritania faced severe threats from increasing drought and other effects of climate change. The Government was, with development partners, undertaking an action plan to empower women and promote microfinance and rural and urban development, among other things. But, the crisis had proven that the non-inclusiveness of the international financial system and insufficiency of its instruments could not provide the responses needed today. That outdated system had to be rebuilt on solid ground and should account more fully for the needs of developing countries. Further, any response should be in line with the Doha Agreement, particularly the commitments regarding development aid by developed countries. He hoped that the Conference’s final outcome document would galvanize the conscience of the world community, orienting it towards the realization of the goals of the United Nations, international cooperation and development, and the well-being and prosperity of all the world’s peoples.
MADHU RAMAN ACHARYA ( Nepal) said the crisis had impacted the least developed countries severely and disproportionately. The situation in landlocked developing countries had been exacerbated by their remoteness and bottlenecks in transit transport systems. The crisis had decelerated growth, reduced investment and seriously undermined development efforts. Most importantly, it had revealed ripple effects in social and human development. The world had failed to anticipate and appreciate its full scope, having depended on the “invisible hand” of the market-driven economy.
The global response had thus far been piecemeal, and efforts had not matched the scale of the problem -– it would be anyone’s guess how much of the $18 trillion collective stimulus packages was going to help the most vulnerable countries. He welcomed the S1.1 trillion G-20 package, but said only a limited share -- $50 billion -- of that amount was targeted to low-income nations and there was no explicit reference to the most vulnerable countries. There was no clear strategy for making the increased Strategic Drawing Rights of the International Monetary Fund available to the most vulnerable countries in a transparent way. The crisis offered an opportunity to start a greener economy and begin comprehensive reform of the global trade and financial architecture. The response should be clear: good policy; good vigilance; and more resources. For its part, the United Nations should take a proactive role, through a more inclusive and development-oriented economic and financial policy. It should address multiple challenges, including the food and energy crises. In closing, he urged the creation of a global stimulus package to restore growth, confidence, credit and jobs.
STEVE D. MATENJE ( Malawi) said that, in developing countries, particularly the least developed of them, the crisis was aggravating hunger and malnutrition for poor families, women, children and people with disabilities and increasing unemployment, reducing revenues and fuelling civil unrest. It was wiping out the prospects for eradicating extreme poverty, hunger and malnutrition, and would likely have serious repercussions for the achievement of the internationally-agreed development goals. Combined with the devastating effects of HIV/AIDS, tuberculosis and malaria, it was bound to quickly become a humanitarian crisis of unprecedented proportions, thereby wiping out the development gains made over the last few years. Although Malawi had enjoyed a robust growth rate of 9.7 per cent of its gross domestic product in 2008, it now faced a real danger of seeing that growth reversed unless urgent action was taken.
He said the United Nations should serve as a common forum to deliberate and find innovative solutions to address the crisis. It was hoped the outcome of the Conference would address the issues most important to the economic prosperity of developing countries. For Malawi, those included promoting economic growth as a means of reducing abject poverty and ensuring food and nutritional security at the household and national levels, which was key to the successful implementation of the internationally agreed development goals. Its agricultural polices had demonstrated that, if properly managed, agricultural input subsidies for poor farmers could contribute dramatically to increases in food production. Malawi wished to request that its bilateral and multilateral development partners increase agricultural investment and reconsider their policies on agricultural subsidies for least developed countries. The United Nations should also remain actively engaged in recognizing and addressing the special needs of the least developed countries and the landlocked developing countries.
MARINA ANNETTE VALERE (Trinidad and Tobago), identifying with the statement made on behalf of the Caribbean Community, said that while early indications suggested there was a slowing of the crisis, the timing of a recovery remained unknown. A fall in demand had led to lower energy prices, meaning that for countries like hers, many large planned industrial projects had been postponed. Fortunately, her country would still see a rise in economic growth, owing to its low debt ratios and high levels of reserves. But, like the wider Caribbean regions, it had already experienced large declines in its main export products. Among other things, that posed a serious challenge not just to attaining the Millennium Development Goals, but to gains already made, making the extension by Governments of social safety nets imperative.
She said considerable fiscal deterioration was already visible and would likely, despite any recovery, remain diminished after the crisis was over. Moreover, the room for discretionary fiscal action over prolonged periods of time was limited even in countries that started with a strong fiscal position. The outlook for many countries in the Caribbean remained sombre and, in that regard, the United Nations must embrace the recommendations derived from the Conference, which had, among other things, highlighted the urgent need for a reform of the international financial architecture. That reform should reorient that system towards the needs of developing countries and towards the shared goal of improved economic growth.
Noting the role of world trade in that system, she emphasized that protectionism would be widely detrimental. While the International Monetary Fund clearly needed reform, it was important to remember that countries with strong economic policies had been extended needed support. Trinidad and Tobago was also encouraged by changes at the World Bank, which seemed to recognize the particular needs of developing countries. Regional and subregional groups must also be utilized to address the needs of this and future generations.
MANSOUR, Permanent Observer of Palestine said he supported the final document adopted by consensus last week. There was widespread consensus that the current crisis was the most difficult since the Great Depression and had hit the most vulnerable people the hardest. The United Nations had to undertake its rightful role in producing measures that promoted development and helped fulfil the Millennium Development Goals. The United Nations should ensure the coherence of the international financial systems, so as to lay the basis for a global economy.
The reform of the financial architecture was necessary to help ensure accountable Governments, he said. The Palestine economy had been severely impacted by the crisis, as economic contributions from Palestinian expatriates declined. In addition, the restrictions deliberately inflicted by Israel, and in violation of humanitarian and human rights and laws, had damaged the Palestinian social structure and its ability to achieve the Millennium Development Goals.
The latest report by the United Nations Conference on Trade and Development (UNCTAD) showed that Israel’s incursion into Gaza in December 2008 and January 2009 had caused great economic damage. Israel also had imposed restrictions on cash into the Gaza and that had created a continued liquidity shortage. He called on the international community to exert its influence to bring an end to the illegal Israeli policies that hindered the Palestinian economy. He urged the fulfilment of donor pledges to bolster the institutions of the future Palestinian State. He called attention to the most vulnerable, who were suffering and were looking to the United Nations to find the way forward.
ALI MCHUMO, Common Fund for Commodities, said many delegates had mentioned the role of commodities in the economic prospects of many developing countries and the commodity sector’s role in the present financial and economic crisis was underlined in the Report of the Commission of Experts. Chapter 4 highlighted the detrimental effects of commodity price volatility as a key source of instability in the global economic system, and called on the international community to explore ways to mitigate the risks from commodity fluctuation. The Report of the Secretary-General also highlighted commodity price fluctuation as playing an important role in the origin and cause of the crisis.
The Common Fund believed it was necessary to agree on a global framework to address the commodity problem in a comprehensive and holistic manner, so long-lasting solutions were reached. The Common Fund partnered with the United Nations Conference on Trade and Development (UNCTAD), United Nations Development Programme (UNDP), and the Agricultural Commodities Programme and launched a Global Initiative on Commodities that brought together stakeholders from across the world to underline the importance of commodities for the development process, he said. The Initiative identified four aspects of commodity issues that needed to be addressed in a sustained way: the supply capacity limitations under which commodity producers operate; the lack of diversification of their production export base; effective participation in the value chain; and the need for an international enabling environment, including an equitable, predictable and rule-based international trade system.
The Initiative identified some key areas that would provide growth and reduce poverty in the commodity-dependent developing countries, he said. Those included significant improvements in international development assistance that reversed the trend of declining aid for agricultural development and the need to design policies that effectively mobilized capital to enhance commodity producers’ access to financial services. Placing commodities in the framework of discussions that addressed the current crisis would give a new impetus to a long-lasting solution to commodity problems, he said.
ANDERS B. JOHNSSON, Secretary-General of the Inter-Parliamentary Union, said the immediate response to the crisis in many severely impacted countries involved the disbursement of significant amounts of remedial funding and he urged countries to ensure greater transparency and accountability in that process. Parliaments could do much to achieve that purpose, and a few had set up special oversight procedures. The crisis highlighted that, once again, States needed to live up to their development assistance commitments. Without external support, many poor countries would not be able to meet the Millennium Development Goals. More and better governance was needed, and the State must assume a more assertive role in that process. Parliaments had played a major role in ensuring that tighter control be applied to the financial system.
He said employment was also central to the debate, as the health of the world economy should not be measured simply in terms of stock market recovery, but in terms of its ability to provide jobs that valued the dignity of work. States must also recognize that the crisis impacted women and men differently, and solutions must thus build on women’s potential, recognize their contributions and promote gender equality. Finally, he said parliamentarians wished to contribute to the design of an improved system better attuned to citizens’ aspirations. Closer interaction should be ensured with international financial institutions. The debate over good governance of international financial institutions should involve making them more responsive to people’s real needs and opening them to greater parliamentary scrutiny and support. In closing, he said he insisted that the crisis was one that was foretold. “We cannot claim to have been ignorant,” he said. At its most basic level, it concerned morals and ethics. At a very minimum, the response must be one in which “business as usual” was abandoned, and a better equilibrium between the voice of society, the role of the State and the dynamics of the market was found.
* *** *For information media • not an official record