TO THE SECOND COMMITTEE
by MR. NITIN DESAI
FOR ECONOMIC AND SOCIAL AFFAIRS
30 September 2002
May I begin by congratulating you on your assumption of this very important office in a year when the Second Committee has some particularly important items on its agenda. I would also take this opportunity of congratulating all of the other members of the Bureau who clearly have a lot of work ahead.
When we met in the Second Committee a year ago it was in the shadow of the events of 9/11. Let me begin with a sense of where we are this year. As far as the world economy is concerned, in many ways things have not turned out as well as we were expecting about a year ago. While a process of economic recovery has started in the industrial economies, it is a very weak process, very prone to accidents, to reversal. There is a serious deficiency of domestic demand in key areas like Japan and the United States. We have also had the financial crisis in Latin America, which has really set back the prospects for growth in that region. Overall, the prospects as this point look far more uncertain than they did a year ago. Most assessments of growth in 2002 have been revised downwards. Most assessments also do suggest some revival of growth in 2003, but one has to recognize that we are today functioning in a situation where the downside risk for the global economy is very substantial.
First, there are geo-political tensions and uncertainties with very possibly grave effects on the economies of all countries, particularly the developing countries. Second, we have probably not seen fully the consequences of the fall in asset prices. While we have seen the fall in equity prices, there is still a property price bubble in many parts of the world and if that bursts, it could have a very severe effect on consumer spending. A third element of downside risk is the continuing large trade imbalances, the fragility of financial and banking systems in many parts of the world and the issues of corporate governance and accounting which have emerged recently. We continue to have problems of debt and certain fiscal difficulties in many developing countries and the year has also seen an unusually large number of major natural disasters with serious adverse economic effects.
So essentially today, a year later, the prospects for the world economy look significantly more bleak than they did a year ago and the risks we look at are basically all downside risks. I mention this because I think it is important that when we do our work we keep in mind that we are operating in an environment of very substantial economic uncertainty.
The past year has also been a very important year in policy development. When the events of 9/11 took place, many people felt that we should perhaps reconsider having all the major events that were scheduled for the following twelve months. People felt that the world would not have time for developmental issues because the main focus would be on the fight against terrorism. But there were others who argued that it is really a continuum; that there would be in fact a greater and more substantial interest in addressing development issues for a variety of reasons, not the least because you cannot really expect involvement and participation in one set of agendas if you also do not see a reverse sense of cooperation and participation in the other set of agendas. And that I think has been borne out.
The events that were scheduled were held and in great measure achieved what they were meant to achieve, though there will always be questions as to whether we could have accomplished more.
I believe that over the past year, Doha, Monterrey, Johannesburg, the World Food Summit and other processes, have set in train a “new multilateralism”. This is not simply a product of what has happened over the past year. And it is not a finished job as yet; it is only a beginning. The focus of my statement today is on the nature of this new multilateralism and what is it that we can do here in the Second Committee, in the General Assembly, to strengthen it, and what are the tasks ahead.
Before I go on, let me take up one issue which has sometimes cropped up. A distinction is sometimes drawn between multilateralism and international economic and development cooperation. Multilateralism is seen as essentially procedural – establishing certain rules that should constrain national policy as it affects other countries. For example, the rule on non-discrimination between potential suppliers in international trade or, in setting exchange rates, as in the now defunct fixed-rate system which prevailed until the early seventies. International economic cooperation, on the other hand, deals with substantive goals and programmes, such as the system of ODA and technical assistance. But the distinction is a very fuzzy one. The international trade regime presumes certain substantive goals, e.g., that trade liberalization is necessarily a good thing. Moreover, in recent trade negotiations which have covered areas like investment, intellectual property and so on, the distinction between procedural and substantive goals is not very clear.
In the reverse direction, international economic cooperation has moved beyond a voluntaristic framework into something akin to global rules – hard ones where treaty obligations are involved as in the case of the environment and human rights, and soft ones where a globally agreed programme is accepted as a basis for national and international action. A good example of the latter are the Millennium Development Goals.
The UN conferences of the past decade must be seen in this context. They have provided a substantive framework not just for international economic cooperation, but also for the multilateral system of trade and finance. Today, the goals of international trade negotiation cannot be framed simply in terms of liberalization and constraints on unilateral actions, but also in terms of their contribution to promoting development and reducing disparities among nations. Equally, the obligations of a country with regard to exchange rate and financial policies cannot be defined simply in terms of the provisions in the IMF Articles of Agreement, but also in terms of the impact on the global flows of concessional and market-based finance. In many ways the outcomes of Doha and Monterrey crystallize this fusion of procedural and substantive goals.
It is no accident that today we call the mandate for trade which emerged from the Doha round a “development round”. Monterrey, for its part, sought to change the way in which we look at the global financial system so that our focus is on the impact of this system on the processes of savings, investment, development, and on how it could contribute to the reduction of disparities, the opening up of opportunities for poorer people and poorer countries.
Let me say a little more about the task before you when it comes to Monterrey. I believe that because of Monterrey and the processes which led up to Monterrey, there has been a sea change on the macro-economic policy front, in particular with respect to the relationship between the United Nations, the international financial institutions, the World Trade Organisations and the regional development bank. As recently as four years ago, the whole issue of macro-economic policy coordination was seen as something largely within the remit of the institutions outside the UN proper -- the WTO, IMF and the World Bank. Even three years ago, very few people thought that it would be possible to hold a major conference on finance for development under UN auspices with extensive high-level participation not just from these financial institutions but also from presidents, prime ministers and the financial industry. But this did take place and it was a first. And today it is recognized that the United Nations is a crucial part of this whole process of macro-economic policy coordination. Our key contribution in this area is that we keep the development agenda at the forefront of macro-economic policy development and that we provide a platform for looking at issues of policy coherence.
The challenge before you in the Second Committee is to see how we are going to follow-up on Monterrey. Monterrey has recognized a certain role for the General Assembly, and for the Economic and Social Council. In light of all the issues on your agenda, how will this role work? Traditionally we have looked at these issues in a segmented manner: trade issues, ODA issues, debt issues, etc. Is this the best way of proceeding? Should we not, in response to Monterrey, find ways of bringing these issues together into a much more holistic consideration of what was agreed in Monterrey, and inject the concerns of development into financial policy?
Over the next few years, the implementation of the negotiations under the Doha round are going to have profound consequences for macro-economic issues. How will the Second Committee address this? Of course the negotiations take place in the WTO, but if we are talking in terms of policy coherence, say regarding foreign direct investment (FDI), how are you going to influence this process? Actually FDI is a very telling case. In how many different places is this being discussed? In how many different contexts are policy frameworks for this being set? How are we going to bring this together? You have a real challenge here. It is not possible to simply continue to do our work on finance the way we have been doing it for the past forty or fifty years. The situation is qualitatively different. Today you have a position, a mandate, to contribute to this, which is in some ways unique, and which requires follow-up.
New issues have come up on the macro-economic side. There is discussion now on the whole question of sovereign debt restructuring. There is a growing interest in the clarification of the relationship between trade and investment. We are all painfully aware of the developmental consequences of financial instability and financial crashes which have taken place only too frequently. Recently, issues of international corporate governance and accounting have also surfaced. These are new issues which impinge on many different areas. Yes, there are technical fora where norms and standard setting on these issues will take place. But from the perspective of injecting the concerns of development, from the perspective of ensuring policy coherence across different areas, I believe that the General Assembly and the Second Committee have an important role to play.
In the report that we have prepared, at your request, on the follow-up to Monterrey, there are several suggestions which address these issues, both from the perspective of how this could be handled at the intergovernmental level and from the perspective of how the Secretariat can better support this type of process. I hope you will look at these proposals and decide on a structure and a mandate which will truly allow us to follow-up on that conference effectively.
The Johannesburg Summit on Sustainable Development was a different sort of conference. Its primary purpose was to focus on implementation, and the real test of its success is whether it will in fact expedite actions in the critical areas identified in the outcome. But there are several areas where the WSSD also helped to advance a policy consensus substantially beyond what was achieved in Rio.
One such area is that of sustainable consumption and production, where the Johannesburg outcome is more elaborate and more specific in terms of action and timetables than the rather general exhortation in Agenda 21. The Johannesburg plan calls for a ten-year programme on sustainable consumption. It refers to other areas, such as energy, biodiversity, and chemicals in a far more focussed way than what we have seen in the past. This is very important because we have successfully injected an important concept into our work on development: that our work is not just setting up policy frameworks for developing countries, but also setting up policy frameworks that cover how development, including consumption and production, is pursued in the richer countries.
There are other areas where there were important forward developments in policy. I mentioned, for instance, energy, water and sanitation. But I would stress that a main contribution of Johannesburg was the specificity of targets and timetables in critical areas. I know that one or two which people wanted are not there, but a very large number are there, and later when we introduce the report from Johannesburg and I will say a little bit more about these. A second main contribution was the recognition that fulfilling target these will require new and additional financial resources. The third contribution was the specific programmatic initiatives which were announced in Johannesburg, often as partnership projects.
I need to say a word on partnerships. Let me first explain why this concept arose. One element of this concept was to recognize that sustainable development involves a degree of innovation in the way in which development is practiced at the ground level. Much of this innovation was taking place in local projects, in local authorities. There were a large number of successful examples of sustainable development in different areas. One of our challenges was: How do we make this go to scale? How do we ensure that something very useful that is happening in a dozen places happens not just in a dozen places but in thousands of places? And one of the motivations behind the idea of partnership was really to tap into this dynamism and innovation which existed in the local Agenda 21s and in the work which many community-based NGOs were doing.
The second motivation in the notion of partnerships was to move away from a donor-defined policy framework into something where donors and programme countries would actually sit together, not at the time the money has to flow, but prior to that when the programmes are being put together and designed.
This is important. Those of us who have worked in development and finance departments in developing countries know that you are always at the receiving end of, if you like, policy prescriptions, even policy conditionalities. Often different ones from different donors. Part of the answer lies in providing a shared programmatic and policy framework which is what the UN conferences have done. But they are fairly general. Hence part of the answer also lies in creating a structured framework where it is accepted that when something specific has to be done with donor support, then it is not just donors but also the programme countries which must also sit together at the conceptual and design stage.
A third point which led to partnership is that if this was to be a conference about implementation we had to come away with a sense of concrete commitments. Yes, the general commitments in terms of programmes and in terms of the commitment to provide resources for them would be there. But we felt this would not be enough because we have had a lot of that in other conferences. It had to be more specific and that is the reason why the idea of partnerships was promoted.
Many people have seen this notion of partnerships essentially as something which was corporate-led. That is not true. Most of the partnerships which have been registered with us actually involve non-governmental organizations and inter-governmental organizations. Yes, there are some which involve corporations, but the majority are basically from these other sectors. Even if there are corporations, I believe it is not a bad thing if you can get corporations to work on our agenda, and areas like energy, it is essential. We are not going to be credible in terms of our programmatic framework on energy if we say that we are only going to focus attention on what the UN is going to do or on what the public sector is going to do. We have to bring the energy companies into our agenda and I believe we have made very good progress in doing this.
I would stress here that none of these partnerships can be a substitute for the commitments which exist in the inter-governmentally agreed programme of action. None of these can be a substitute for the resources which need to be provided for that. But these are important as an adjunct to them, as a way of deepening and improving the quality of implementation. If our policy frameworks are global, are comprehensive, they must influence not just what public authorities do, they must influence the actions of the all those actors who have an impact on sustainable development, whether they be businesses, local authorities, cooperatives, trade unions, or activist groups.
At this point, let me emphasize the importance of what has been done over these ten years on the UN conference process. A big difference is the credibility and the visibility of the economic and social work of the UN. Think of what the work was like in the ‘80s and what it is like now. How many people focussed on what was being done and discussed in the Second Committee resolutions in the ‘80s? How many more are focussing on what is coming out of this process and why did this happen? It happened because you engaged capitals; people from capitals started participating in these processes. Now, a lot of finance and trade ministers worry as much about what their peers in other countries think of them as they do of what their fellow cabinet members think of them, which has happened because of these global processes. But besides capitals, during the ‘90s the UN engaged civil society, activist groups, business, cooperatives, trade unions and others on an unprecedented scale. Because of this, you had huge media exposure and a tremendous impact in terms of raising awareness and in terms of changing the mind-set of key decision makers.
It is this which has given outcomes like Agenda 21 the type of weight and influence which even the most bold resolution negotiated by a limited group of people would not have had. Take the example of low-income country debt. Yes, what you did in the Second Committee was very valuable in keeping these issues on the agenda. But we got action when this got combined with the sorts of initiatives which were launched by the NGO movement like the Jubilee 2000 initiative on debt. That is why I believe it is in the interest of the intergovernmental process in the UN to make common cause with activist groups and to draw in influential civil society actors.
Basically, international relations today are much more complex than in the past. Yes, we are essentially focussed on a system of relations between states. But today these relations are influenced as much by a different structure of global (not international) relations set by networks of like-minded people - what people call a global civil society. This global civil society has played a profound role in shaping the orientation and outcome of the work that we have done in the UN, particularly in the conferences. We in the UN exist at the hinge of this old world of international relations and the new world of global relations. I stress this point because when we switch our focus from policy development to implementation we must keep this mind. In some ways partnerships are also an effort to take this into account as we switch from policy development to implementation. We must recognize the critical role that our relationship with civil society has played in strengthening the visibility and the impact of the work that we do here in the intergovernmental process.
I have spoken of the past but what of the future? Will the same structure of standing political processes and great conferences work as we switch our emphasis more and more to issues of implementation? A word first. Let’s not assume that all tasks of policy development are over and done with. There are still many unresolved issues. Yes, the global conferences of the past have provided us with a very comprehensive framework for global cooperation in development. But there are many issues where we require further work for building a consensus – a true consensus which reflects a genuine meeting of minds rather than simply a textual fix that papers over the cracks. The Secretary-General’s report on reforms has highlighted some of these. Let me touch on just a few.
Globalisation is one such issue. There are a variety of issues under this head on which there is as yet no real consensus, and let me just list a few:
All of these are issues on which there is as yet a consensus. We still have to do work in this area.
Yet another area is science and technology. The prospects both for equity and sustainability depend critically on the direction of research and development and the terms on which poor people and poor countries will have access to technology. Some of this gets discussed piecemeal, as in the case of medicines for AIDS. But where, how and when can we develop a global consensus on generic issues like intellectual property regimes? There are unresolved issues here, as was highlighted very recently in a report on the subject which was commissioned by the government of the United Kingdom which has been extensively reported in the press over the past few weeks.
Yet, another issue on which we clearly do not have a global consensus relates to migration. A world economy in which commodities and capital are free to move but labour is not will be subject to tensions and pressures which we cannot ignore. A policy regime in which domestic and foreign capital has to be treated in a non-discriminatory manner, but where domestic and foreign labour can be treated differently needs more justification than is apparent. One understands the political, social and cultural concerns that exist in this area. My point simply is that there are unresolved differences here on what is the appropriate degree of differentiation and discrimination which we have not as yet addressed.
I stress this aspect because I don’t think we should go away with a notion that somehow all our work on policy development is over. We have a great deal still to do in policy development if for no other reason than because the world keeps changing in unpredictable ways.
Nevertheless our focus is on implementation. I said a word on the whole question of implementation of Johannesburg and on the implementation of Monterrey. A third theme which is part of your work here is the integration of all conferences. Let me just flag the issues here.
First, when it comes to implementation of conferences, we have the issue of monitoring of the Millennium Development Goals, of the goals which are specific to the conferences, and monitoring at the global level, and at the national level. We need an architecture for this monitoring so that we have a certain coherence and we don’t repeat our work in different places. Perhaps the architecture has to be provided by the framework that we are setting in place for the Millennium Development Goals and then we imbed the other things in that, like a series of Russian dolls. The biggest, the most visible one of course is the Millennium Development Goals. But there may be other ones in between.
Second, a review of barriers to implementation will have to take place. How much of this will be conference-specific in the processes mandated to do this, the functional commissions? How much review of crosscutting issues needs to be done in ECOSOC and the General Assembly? This latter aspect will really tie in a great deal with what we do about policy coherence. Clearly we cannot talk of policy coherence globally and continue to deal with crosscutting issues like trade, finance, poverty, science and technology in a fragmented way in our own processes.
The third issue is how we ensure that this follow-up really influences the operational activities of the UN system, both in the UN funds and programmes as well as in the international financial institutions. I would argue that we should also ask ourselves: How is it going to influence the activities of bilaterals?
I also believe that we have to ask questions, think out of the box, in terms of the processes of implementation. I alluded earlier to the question of partnerships, but are we going to keep these partnerships at an arms length? How are we going to ensure that they get folded better into our work? How do we review these partnership activities? I believe that these are some of the things that you will have to consider as part of your agenda item on integrated follow-up to conferences, and more particularly when you consider the follow-up to WSSD.
I am hopeful that at the end of your work in the Second Committee you are going to come up with bold and far-reaching proposals in this area. How are we to assess the adequacy of the arrangements that we set in place for the follow-up of Monterrey, Johannesburg and other conferences? At one level, we will judge them in procedural terms: simplification of the agenda, reduction in the volume of documentation, the number of meetings, harmonization of reporting. This is important because with limited resources, procedural improvements can help improve the quality of our work. That is why the Secretary-General’s report on reform rightly stresses this aspect.
But we also need to assess the adequacy of what we do in terms of effectiveness. Will these arrangements help to connect the programming and funding sources better? Will they be able to involve and influence all the key actors who can make a difference at the ground level? Will they be able to enforce a measure of accountability in all areas – national and international, public and private? I believe this issue of effectiveness is crucial as we shift our focus to implementation.
The exhortations and promises are in place. If only we could ensure that these exhortations are heard, these promises fulfilled. Then on the basis of the decisions that have already been taken in the conferences of the past decade, it is perfectly possible to predict that our successors meeting here in 2015 will be able to say, amongst other things:
All of this is possible on the basis of the decisions we have taken, if only we ensure that we do what we have said we are going to do. This to me is the real challenge before the Second Committee. The institutional challenge is to see how this gap between performance and promise can be closed. We have had a decade of promises. We now need a decade of performance.
This is the tenth and perhaps the last time I will be opening the general debate in the Second Committee. Over this decade a great deal has been achieved. The UN General Assembly, through its Second and Third Committees and through the conferences mandated by these Committees has reasserted its role in guiding global cooperation in economic, social and environmental matters. The goals and objectives and the policy approaches and frameworks set through these processes are increasingly accepted as the basis for global cooperation. The most obvious example of this is the status of the MDGs. Those of you who were in Washington this weekend, know the sort of role that the outcome of these conferences has played in shaping the discussions in the Fund/Bank. This is the new multilateralism which is coming into being, a multilateralism which is guided not just by procedural goals of setting the rules of the game but a multilateralism which is also guided by substantive concerns about equity, about justice, about fairness, about sustainability. That is because through the UN process we have been able to amplify the voices of the weak, the marginalized and the oppressed much more so than we could do a decade earlier.
In all of this, you the delegates of the Second Committee have played a crucial role as you have set up these processes and as you negotiated relentlessly into the middle of the night. Let me just say that on my side, it was an honour and a privilege to have been a part of this work. I thank you for it and I greatly value the honour and support that you have always given me. But the work is unfinished and I wish you all strength as you strive to complete the task of making this world more just and more sustainable.
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Date last posted: 03 October 2002
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