IMPACT OF GLOBAL ECONOMIC SLOWDOWN ON DEVELOPING COUNTRIES HIGHLIGHTED, AS UNCTAD SECRETARY-GENERAL ADDRESSES SECOND COMMITTEE

22 October 2001
GA/EF/2962

IMPACT OF GLOBAL ECONOMIC SLOWDOWN ON DEVELOPING COUNTRIES HIGHLIGHTED, AS UNCTAD SECRETARY-GENERAL ADDRESSES SECOND COMMITTEE

22/10/2001
Press ReleaseGA/EF/2962

Fifty-sixth General Assembly

Second Committee

13th Meeting (AM)

IMPACT OF GLOBAL ECONOMIC SLOWDOWN ON DEVELOPING COUNTRIES HIGHLIGHTED,

AS UNCTAD SECRETARY-GENERAL ADDRESSES SECOND COMMITTEE

Also, Executive Secretary for Climate Change Convention

Secretariat Tells Committee Parties Will Meet in Marrakech 29 October

Rubens Ricupero, Secretary-General of the United Nations Conference on Trade and Development (UNCTAD), cautioned that no one should underestimate the seriousness of the current global economic slowdown, as he addressed the Second Committee (Economic and Financial) this morning on the impact of that slowdown on developing countries in an interdependent global economy.

Mr. Ricupero said that the brutality of the attacks of 11 September had prompted a vigorous response by the economic authorities of the major industrial economies, one that would not have been feasible if not for the gravity of the situation.  That response included a massive injection of liquidity into the world financial system, a reduction in interest rates and assistance to the most affected industries.  Thus, it was reasonable to assume that the economies of the United States and the rest of the world could soon recover and that recovery would be strong.

He hoped that the same vigor would be shown in measures to help the developing countries.  A solution could only be found if all the facilities of the multilateral financial organizations were promptly mobilized.  One worry was that, due to the new interests that were emerging, the international community might decrease the attention given to the most vulnerable, particularly those not currently in the spotlight.  It was important not to lose sight of the marginalized countries, particularly the least developed countries and those countries in sub-Saharan Africa.

The Committee also heard from Michael Zammit Cutajar, Executive Secretary of the Secretariat for the United Nations Framework Convention on Climate Change, who said that Conference of the Parties to the Convention would go ahead with its scheduled meeting on 29 October in Marrakech, despite the current global economic and political situation.  That meeting would show the importance of multilateral cooperation and support for the climate change process.  Among other things, the meeting would focus on the African dimension of climate change, as well as how to get more countries involved in the climate change process.

Also this morning, the representative of Iran, speaking on behalf of the “Group of 77” developing countries and China, introduced the draft resolution on implementation of the first United Nations Decade for the Eradication of Poverty (1997-2006), including the establishment of the World Solidarity Fund for poverty eradication.

The Committee will meet again at 10 a.m. Thursday, 25 October, to begin its consideration of operational activities for development.

Background

The Second Committee (Economic and Financial) met this morning to hear statements by the Secretary-General of the United Nations Conference on Trade and Development (UNCTAD) and the Executive Secretary of the secretariat for the United Nations Framework Convention on Climate Change.

Before the Committee is the report of the Secretary-General on institutional linkage of the secretariat of the United Nations Framework Convention on Climate Change to the United Nations (document A/56/385), which provides an update and overall review on that linkage.  The report states that the institutional linkage of the Convention secretariat to the United Nations and the related administrative arrangements as they have developed have provided and continue to provide a sound basis for the day-to-day functioning of the Convention secretariat.  They clearly define the accountability of the Executive Secretary to the Conference of the Parties and to the Secretary-General and, at the same time, delineate the responsibility of the United Nations for providing the necessary support services, as well as advice to the Executive Secretary when requested.

Overall, the report states, the institutional linkage of the Convention secretariat to the United Nations has proven to be a useful tool in managing the Convention secretariat and has allowed flexibility in adapting to changing circumstances.  Accordingly, the Secretary-General recommends that the General Assembly approve the continuation of the current institutional linkage and related administrative arrangements for a further five-year period, to be reviewed by both bodies not later than 31 December 2006.

The Committee was also expected to hear the introduction of a draft resolution on implementation of the first United Nations Decade for the Eradication of Poverty (1997-2006), including the establishment of the World Solidarity Fund for poverty eradication (document A/C.2/56/L.5), sponsored by Iran (on behalf of the “Group of 77” developing countries and China). 

By its terms, the Assembly would decide to establish the Fund and invite all donor countries, organizations, institutions, foundations and all interested parties that were in a position to do so to contribute to the operations of the Fund.  The Assembly would also request the Secretary-General to submit to the Assembly at its fifty-seventh session a report with recommendations on the mechanisms to make the Fund operational.

In addition, the Assembly would call on Member States and the international community to support and participate in the global campaign for poverty eradication at the global, regional and country levels to ensure that the poverty eradication goal was realized for all countries, and call on all donor countries to support the campaign and to strengthen the resources available to the United Nations in order to enhance its capacity to support and coordinate all those initiatives and to play its role of facilitator and advocate.

Further, the Assembly would call for strengthened efforts at all levels to implement fully and effectively the relevant resolutions and decisions of the United Nations and all agreements and commitments adopted at the major United Nations conferences and summits organized since 1990, as well as the Millennium Declaration, as they relate to the eradication of poverty, with a view to achieving tangible results.

Statements

RUBENS RICUPERO, Secretary-General of the UNCTAD, spoke about the implications and relationship between the new international situation that had arisen following 11 September and the prospects for development.  While the economic slowdown and the changes in the international system had their links, they were different and distinct episodes.  The slowdown had already started before the terrorist attacks, which had accentuated and aggravated what was already there -- the deceleration of worldwide economic growth.  “No one should underestimate the seriousness of the economic slowdown,” he stressed.

The brutality of the attacks, he continued, had prompted a vigorous response by the economic authorities of the major industrial economies, one that would not have been feasible if not for the gravity of the situation.  First, there was a massive injection of liquidity into the system, which was able to restore a high degree of confidence.  Second, more than 14 central banks had reduced interest rates.  Third, a vigorous fiscal stimulus was provided by the United States in the rapid approval for assistance to the most affected industries and in providing tax cuts.  It was reasonable to assume that the United States and world economies would recover soon and strongly.  How long that would take was difficult to tell.

Turning to the fate of developing countries in that context, he hoped that the same vigour would be shown in measures to help the developing countries.  A solution could only be found if all the facilities of the multilateral financial organizations were mobilized promptly.  In that regard, he was encouraged by recent statements by the heads of the World Bank and the International Monetary Fund.  Unfortunately the resources of those facilities were much more difficult to disburse and they were under strict rules to charge above-market interest rates.

He cautioned that, due to the new interests that were emerging, the international community might decrease the attention given to the most vulnerable, particularly those in countries that were currently not in the spotlight.  One of the new developments was the precedence given to political considerations over economic ones.  Also, the initiative of the State had become fundamental, even for the destiny of markets.  It was important not to lose sight of the marginalized countries, particularly the least developed countries and those countries in sub-Saharan Africa.

The financing for development process provided one opportunity to do that, he said.  Also, the upcoming World Trade Organization Fourth Ministerial Meeting, to be held in Qatar, was a splendid opportunity to really give concrete signs that trade negotiations would be attentive and responsive to the development dimension.  Political will was crucial in that regard.

He concluded by saying that it was not possible to predict the situation of the world two years from now, as there were major changes taking place, most of them positive.  Perhaps the central lesson from the attacks was that the world was interdependent.  No one could really think that any country could ensure peace, prosperity and security on its own.

MICHAEL ZAMMIT CUTAJAR, Executive Secretary of the secretariat for the United Nations Framework Convention on Climate Change, said the Conference of the Parties to the Climate Change Convention would go ahead with its scheduled meeting on 29 October in Marrakech despite the economic and political situation in the

world today.  That meeting would show the importance of multilateral cooperation and support for the climate change process.  Among other things, that meeting would focus on the African dimension of climate change.

He hoped that the Marrakech meeting would provide further momentum to the Kyoto process and build on the agreements made in Bonn in July 2001, he added.  It would also provide an opportunity to build support for the Kyoto Protocol, which would hopefully lead to even more countries signing the instrument.  In Bonn, the Protocol suffered from a lack of support, particularly from the United States, which withdrew from the Protocol.  That meant that its success would depend on the will of other industrialized countries.  Their actions would determine to what extent the goals of Kyoto would be fulfilled, especially in terms of the clean development mechanism on which so many hopes clung.  The other issue in Marrakech would be to address how to get more countries, particularly the United States, involved in the climate change process.

Introduction of Draft

ALIREZA TOOTOONCHIAN (Iran), speaking on behalf of the “Group of 77” developing countries and China, introduced the draft resolution on implementation of the first United Nations Decade for the Eradication of Poverty (1997-2006), including the establishment of the World Solidarity Fund for poverty eradication (document A/C.2/6/L.5).

He said that the prospect of achieving the objectives of the Decade and the goals of the Millennium Declaration were not encouraging.  Poverty remained one of the biggest challenges facing humanity and, in the view of the Group, the most pervasive violation of human rights.  That was why poverty eradication must be placed at the center of international cooperation and national policies.  The text, he added, had mapped out a series of concrete measures to achieve economic growth and social development.  Also included was a decision regarding the establishment of the Fund.

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For information media. Not an official record.