Second Committee: Economic and Financial
Bringing Home Globalization, or Globalization Home
By Vikram Sura with Jonas Hagen, for the Chronicle
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| Three UN conferences held in 2001 and 2002 left in their wake commitments on development. The Second (Economic and Financial) Committee, in discussing these commitments, marked a turning point in deciding how to measure them against the internationally agreed Millennium Development Goals, one aim of which is to halve poverty by the year 2015. The World Summit on Sustainable Development in Johannesburg, South Africa in August/September 2002 associated poverty reduction with environmental protection; the International Conference on Financing for Development in Monterrey, Mexico in March 2002 was concerned with resource shortfalls for development goals; and the World Trade Organization's (WTO) Ministerial Conference in Doha, Qatar in November 2001 declared that it put the interests of the developing world at the heart of trade reform. These conferences bracketed three main needs of developing countries: sustainable development, finance and commerce for development.
The General Assembly decided to hold a high-level dialogue by October 2003 involving WTO, the International Monetary Fund (IMF), the World Bank and civil society to "evaluate progress" after Monterrey. The conferences raised hopes in the developing world as it faced unilateral trade barriers, Ambassador Suazo Fernández said. "Developing nations can be rich in resources, but if you don't have the possibility to exploit them and put them in the market for your own people, then you are stuck." According to the United Nations Conference on Trade and Development (UNCTAD), between 1980 and 2001 exports of the developed world shot up from $1,296 billion to $3,919 billion, with 64 per cent share in world trade, while exports of the developing world climbed from $581 billion to $1,922 billion, with 30 per cent share. In the debate on measures to cut poverty, delegates from Bangladesh, Burkina Faso, China, the Democratic Republic of the Congo, Egypt, India, Myanmar, and Venezuela, among others, said the commitment in Monterrey by developed nations to increase the official development assistance (ODA) to 0.7 per cent of their gross domestic product (GDP)—roughly $100 billion—must be realized alongside increased access to developed markets. "It's a kind of a package" involving developed and developing nations, Chairman Suazo Fernández said. "If you want us to increase our ODA, then you have to have good governance, fair and free elections and combat corruption." Whereas the donors had the same message, the same structure, the same philosophy—"we will give you something, help your own poor people, don't steal"—he said that for the developing nations their share of the burden was more complicated. "The G-77 is more than 180 countries of the 191 in the UN, so you cannot compare the economic and social system in India with that of Cuba, with that of Brazil or Argentina or Indonesia or Thailand", he said. The debate on poverty concluded in a consensus resolution with the "developing countries not denying responsibility" for their part in the problem, the Chairman told the Chronicle, and with the General Assembly adopting without a vote the text on "Implementation of the first United Nations Decade for the Eradication of Poverty (1997-2006)". According to UNCTAD, eight of every ten persons in the least developed countries (LDCs) spend less than $2 a day and are said to suffer generalized poverty. Of the 49 LDCs, 16 are landlocked countries whose trade advantage is dependent on transit rights and transport infrastructure in neighbouring countries. Reporting before the Committee, the High Representative for the Least Developed Countries, Landlocked Developing Countries and Small Island Developing States, Anwarul Chowdhury of Bangladesh, said high transport costs slowed export growth, increased import prices and limited trade gain. The representative of the Lao People's Democratic Republic, Saleumxay Kommasith, told the Chronicle that the complexities of geography made his country's products uncompetitive. "For Laos to ship its goods, it has no choice but to use the designated transport—source companies in transit countries", he said. "This results in high costs. We want concrete measures to address three aspects: liberalization of transport services; roads, communication, port and checkpoint facilities; and easier document processing and customs procedures in transit countries." The Committee, recognizing the needs of LDCs and landlocked countries, welcomed the decision by the UN Secretary-General to set up a trust fund to support the Office of the High Representative. It further called on member Governments, intergovernmental and non-governmental organizations and the private sector to contribute voluntarily to the fund. It also passed a resolution on the "Preparations for the International Ministerial Conference on Transit Transport Cooperation" in Kazakhstan in 2003. "We are looking for cooperation from transit countries and donor countries in the Conference", Mr. Kommasith said. "We want a global programme of action with concrete measures—an action-oriented plan." Even as the Johannesburg Conference gave a big boost to collaboration between Governments, business and civil society in rooting out poverty, and the proposed General Assembly high-level dialogue in Monterrey may become a turning point on how the United Nations does business with the Bretton Woods institutions, Ambassador Suazo Fernández said, "they are home, they are coming to us"; the role of the IMF and the World Bank came under scrutiny in the Committee, with Nobel Laureate in Economic Science Joseph Stiglitz presenting a critical preamble. Delegates noted that Professor Stiglitz's views on globalization echoed those that had long been held by developing countries. Ecuador's delegate Humberto Jimenez told the Chronicle that IMF lending policies should not concentrate strictly on privatization, liberalization and deregulation. "They should take into account social realities", he said, adding that in the last ten to twelve years Latin America has "applied the recommendations" of the IMF. "It is easy to see the harmful social consequences of these policies", Mr. Jimenez pointed out. "Ecuador's total debt was 118 per cent of its GDP, and 40 per cent of its annual GDP is dedicated to public debt, while 20 per cent is dedicated to servicing external debt." Mikheil Siamashvili of Georgia told the Chronicle that loan conditions by the IMF and the World Bank must look to the question, "How is the loan doing for what it was intended to do?" He said that loan installments must not be stopped "if some criteria not directly related to it are unmet". When debt payments are funneled into poverty programmes or AIDS eradication for instance, "this is not avoiding payment, but spending the money to be in a position where we don't need loans". Earlier, Prof. Stiglitz told the Committee that money going to the IMF from crisis-ridden Argentina should be flowing in the "other direction", since the prime idea was to reactivate its economy. Chairman Suazo Fernández agreed there were complaints in the Committee about the so-called "Washington Consensus" coming from the IMF and the World Bank, but he maintained they were "part of the past". In the debate concerning trade and development, UNCTAD Director-General Rubens Ricupero told the Committee that proliferation of regional trade agreements presented a threat to the multilateral trading regime. "Regional agreements usually discriminated against non-members, and only the signatories benefited from trade liberalization", he warned. Two approaches were noticed in the debate. Venezuela's representative, who also spoke for the G-77 and China, noted that developing countries had integrated rapidly into the world trading system, but benefits had fallen far short, citing as a prime reason restrictions in developed markets. Denmark's representative, speaking on behalf of the European Union, noted that market access alone could not spur development and reduce poverty but sound domestic policies were also needed. According to the United Nations, the largest regional trade was among the 15 countries in the European Union, whose exports in 2001 were $2,234 billion, of which $1,400 billion was within the Union; similarly, exports of the ten-nation Association of South East Asian Nations touched $3,910 billion, of which $885 billion was within ASEAN; and for the three countries in the North American Free Trade Area, exports valued some $1,149 billion, of which $624 billion was within NAFTA. In contrast, the combined regional trade of 47 countries-7 in the South Asian Association for Regional Cooperation, 11 in Latin America, 14 in the South African Development Community, and 15 in the Economic Community of West African States—does not equal the regional trade of the European Union or NAFTA or ASEAN. Ambassador Suazo Fernández said: "The WTO will have a challenge and that has to be pursued in the high-level dialogue. What is the worldwide trade situation? After the General Agreement on Trade and Tariffs, after WTO, what has been achieved for the whole world? And how has a specific region become more competitive to the other regions? That is something to be seen." The Committee recommended 43 texts to the General Assembly—all were adopted without a vote, except one on "Permanent sovereignty of the Palestinian people in the occupied Palestinian Territory, including East Jerusalem, and of the Arab population in the occupied Syrian Golan over their natural resources", which was voted 155 to 4, with 4 abstentions. Summing up this session's work, Chairman Suazo Fernández said that "it was a transition not only for the Committee but also for the United Nations itself. That doesn't mean it is a fast-track process. The feeling was a constructive one, a positive one."
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| The Vote on Palestinian Natural Resources | ||||
| The resolution on the sovereignty of Palestinians in the West Bank, Gaza and East Jerusalem and of the population of the occupied Syrian Golan over their natural resources was opposed by Israel, which said that the "biased and counterproductive resolution" would neither advance the peace negotiations nor foster better relations between Israel and the Palestinians. "Israel feels that this item is politically motivated", its representative, Marco Sermoneta, told the UN Chronicle, "and should be removed from the agenda of the Second Committee. The differences should be dealt with in direct negotiations between the parties." Venezuela, on behalf of the Group of 77 developing countries and China, had introduced the draft. The General Assembly adopted the resolution by 155 to 4, with 4 abstentions, with Israel, the Federated States of Micronesia, the United States and the Marshall Islands voting against. The resolution recognized the right of the Palestinian people to claim damages arising from the "exploitation and loss of their natural resources", and hoped that the issue would be dealt with in the framework of final status negotiations between the Palestinian and Israeli sides. Of the main players in the Middle East peace process, the European Union, voting in favour of the resolution, "believed that the natural resources of any territory seized by force of arms should not be used inappropriately or illegally by the occupying Power". It reaffirmed the applicability of the 1949 Fourth Geneva Convention to the occupied territories, and also "affirmed" that any infringement of the rights of the Palestinian people with regard to that Convention was illegal. The Union added that this was an issue to be dealt with in the framework of the permanent status negotiations. Also voting in favour was Japan, which reasserted its support for the resolution and said it was "very concerned with the suffering of Palestinians in the West Bank and Gaza". It urged both sides to end the cycle of violence. |
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