|Department of Public Information • News and Media Division • New York|
Sixty-seventh General Assembly
Thematic Debate on Global Economic
Governance (AM & PM)
General Assembly, as Uniquely Representative Body, Should Play Key Role in Rapidly
Evolving Financial Systems, Say Delegates at Global Economic Governance Debate
Speakers Call for More Transparency, Accountability
In Inclusive Dialogue between Significant World Economies
The United Nations and its General Assembly, as a uniquely representative body on the world stage, had a key role to play in the rapidly evolving system of global economic governance, said delegates and high-level speakers today as they gathered for the Assembly’s second thematic debate in as many weeks.
Discussions at the event — entitled “The United Nations and Global Economic Governance” — focused on the increasing prominence of such informal groupings of States as the Group of 20 (G20), and on balancing the effectiveness of such groupings with representativeness. In that vein, a number of delegates expressed concern that the current world system was not inclusive enough, excluding, in particular, the world’s poorest and most vulnerable.
Vuk Jeremić, President of the Assembly, said that the ongoing discussions on how to improve global economic governance had grown significantly since the outbreak of the world economic, financial and debt crisis in 2008. The G20, which had become increasingly prominent over the past few years, had represented for some a new, more inclusive dialogue between the world’s most significant economies. For others, however, the G20 was perceived as an “exclusive club” whose conclusions were reached in a non-transparent, unaccountable way.
“The General Assembly should,” he said, “become a venue for enhanced interaction between international financial and trade institutions, the G20 and non-G20 Member States,” where common concerns, as well as exchanges of views and information, could be shared. Such a system would complement existing multilateral efforts to establish what the Secretary-General called “a more inclusive and more participatory system of global economic governance”.
Also emphasizing the role of the General Assembly, Jan Eliasson, Deputy Secretary-General, stated that it was the only global forum with universal membership which gave equal voice to all members and reflected the needs of the least developed countries, small States and under-represented regions. It was therefore important that the G20 and other multilateral institutions continue to strengthen their engagement with the Organization on economic governance and other cross-cutting global challenges.
The recent global financial crisis had been a “watershed” in global economic governance, said J.M. Barroso, President of the European Commission. The European Union thus realized a coordinated response was necessary, and that a new forum was needed to bring together both existing major players and emerging markets. However, fairness was crucial to global economic governance. “It is not acceptable that a nation or group of nations prospers at the detriment of others,” he stressed, adding that “we are all neighbours,” and “no country is big enough to be immune to what happens next door.”
“We need a better organized world where countries are held accountable for their actions,” agreed Heikki Holmås, Minister of International Development of Norway. The collapse of the financial services firm Lehman Brothers, which had initiated the economic downturn of 2008, had had a real impact on real human beings around the world. There was a need to give voice to smaller countries in economic and financial governance and to anchor groups such as the G20 to the United Nations, the International Monetary Fund (IMF) and other such international organizations.
While many speakers pointed out that the G20 had undertaken a number of outreach efforts to both the United Nations — through events such as the one today — and to the international community, some, however, voiced strong criticisms regarding the Group’s work. Paul Oquist, Minister-Private Secretary of National Policy for the Presidency of Nicaragua, stressed that it was an illusion that the “improvisations” of the past six years constituted some sort of economic governance system. On the contrary, they were prolonging the crisis by ignoring underlying structural factors.
The G20 was an ad hoc body, he said, with no legal basis, and it could not make binding decisions for everyone. To hold the contrary would be tantamount to saying once again in human history that the richest and most powerful would decide the fate of everyone. “There is no substitute for the United Nations to ensure the legality, legitimacy and credibility of the process,” he said.
A number of proposals for ways to formalize interaction between the G20 and the United Nations also emerged throughout the meeting. Those included, among others, inviting the Secretary-General to attend G20 summits, briefing the General Assembly by the Sherpa of the G20 presidency before and after summits, and holding thematic debates on the priorities of the current G20 presidency.
In closing remarks, Mr. Jeremić welcomed the favorable reception by Member States to the increasing role of the G20 in global economic governance. He nevertheless regretted that the G20 was still considered to be too small and lacking in transparency. In addition, he said that a system of global economic governance was essential to carrying out development goals beyond 2015, and he stressed the need to treat all players in the world economy on an equal footing.
In the afternoon session, the Assembly heard a briefing by Ksenia Yudaeva, the G20 Sherpa of the Russian Federation, on that country’s presidency of the Group. During the interactive dialogue, Ms. Yudaeva elaborated on the Russian Federation’s cooperation with different organizations and outreach activities.
A panel discussion, moderated by Shamshad Akhtar, Assistant Secretary-General for Economic and Social Affairs, examined the changes in the global economic governance system, including lessons learned from the economic, financial and debt crises and best practices of the G20 outreach.
Also speaking during the morning’s opening segment were Kamla Persad-Bissessar, Prime Minister of Trinidad and Tobago; Ali Babacan, Deputy Prime Minister of Turkey; Alfredo Moreno Charme, Minister of Foreign Affairs of Chile; Abdul Maal A. Muhith, Minister of Finance of Bangladesh; and Valentin Rybakov, Deputy Foreign Minister of Belarus.
Also participating in the opening segment were Nestor Osorio (Colombia), President of the Economic and Social Council; Siddharth Tiwari, Director, Strategy, Policy, and Review Department of the International Monetary Fund (IMF); Harsha V. Singh, Deputy Director General of the World Trade Organization (WTO); and Zia Qureshi, Director of Strategy and Operations for the Office of the Senior Vice President and Chief Economist of Development Economics at the World Bank,.
Taking part in an interactive debate segment were representatives of Singapore (speaking on behalf of the Global Governance Group), Kazakhstan, Mexico, Viet Nam, Fiji (on behalf of the “Group of 77” developing countries and China), China, Sri Lanka, Slovakia, United Kingdom, Bangladesh, Pakistan, Morocco, Brazil, Nauru, India, South Africa, Cuba, Congo and Japan.
Featured panellists were Shaukat Aziz, former Prime Minister of Pakistan; Ian Bremmer, President of the Eurasia Group; Jeffrey Sachs, Columbia University; and Gordon de Brouwer, Sherpa of the incoming Australian G20 presidency.
The General Assembly will reconvene in plenary on Wednesday, 17 April, at 10:00 a.m.
The General Assembly convened today to hold a thematic debate on “The United Nations and Global Economic Governance”. In light of the rise of informal groupings of global economic governance, such as the Group of Twenty Finance Ministers and Central Bank Governors (G20), the meeting would aim to open a discussion of recent changes in the global system of economic governance, to examine existing best practices in the area of outreach on economic issues of concern to Member States and to consider ways in which communication between the G20 and non-G20 States could be regularized. In addition, delegations would hear a briefing from the current presidency of the G20 and would hold both an interactive discussion and a panel segment.
VUK JEREMIĆ, President of the General Assembly, said that since the outbreak of the world economic, financial and debt crisis the ongoing discussions about how to improve global economic governance had grown in significance, drawing increased public attention across the planet. Over the past few years, the G20 had become an increasingly prominent forum in which important geo-economic choices were made by its members. “Invariably, these have world-wide implications and, in one way or another, shape every United Nations Member State’s political, economic and social development,” he said.
For some, he continued, the G20 represented a new, more inclusive mechanism for dialogue between the world’s most significant economies. For others, however, the G20 was perceived as an “exclusive club” whose conclusions were reached in a non-transparent, unaccountable way. Its structure and membership left out a majority of Member States and excluded entire geographies.
“The General Assembly should become a venue for enhanced interaction between international financial and trade institutions, the G20 and non-G20 Member States, by providing a platform to reflect on common concerns, as well as exchange views and share information,” he stated. That would complement existing multilateral efforts to establish what a recent report by the Secretary-General called “a more inclusive and more participatory system of global economic governance” without infringing on any of the established prerogatives. The debate was also taking place against the backdrop of ongoing efforts to define the parameters of the post-2015 agenda.
Indeed, he underscored, for a single, inclusive and fully coherent post-2015 agenda to emerge over the next thousand days — the target deadline for the Millennium Development Goals — sustained efforts would be required to ensure the activities of key international economic players were mutually reinforcing and complementary with those taking place at the United Nations. The policies and actions of the G20 and international financial institutions would have a critical impact on the General Assembly’s capacity to fulfil its mandate to conceptualize a universal transition to sustainability. Greater consultation and coordination between them and the General Assembly, the chief deliberative, policymaking and representative organ of the United Nations, was a strategic responsibility.
Referring to the Secretary-General’s report, entitled “Global Economic Governance and Development”, which was submitted on 1 March of this year, pursuant to the relevant resolution, he said that the report had issued a recommendation to further broaden and strengthen the involvement of developing countries in international economic decision-making and norm-setting while underscoring the importance of protecting the voice of the international community’s poorest members. It had also emphasized the proposals of the Global Economic Governance Group for International Financial Institutions and the G20 to strengthen and systematize their engagement with the United Nations.
The G20 had intensified its outreach efforts towards the United Nations, he said, referring next to the United Kingdom Prime Minister David Cameron’s landmark report, commission by the G20 presidency in preparation for the 2011 Cannes Summit. It had underscored the insufficiency of an ad hoc approach to G20 engagement with the rest of the world, and recommended the establishment of a more systematic approach.
As a first step, he said, the report had proposed that the G20 regularize the practice of briefings and consultations with the United Nations membership. Subsequent G20 presidencies had echoed that idea, with the current one noting in its outreach strategy that the G20 could play a supportive role to the work of the United Nations. There were a number of ways in which to formalize existing ad hoc best practices, including: inviting the Secretary-General to attend G20 summits; inviting the United Nations Sherpa to participate in G20 preparatory meetings; briefings in the General Assembly by the Sherpa of the G20 presidency before and after summits; thematic debates in the plenary focusing on the priorities of the current G20 presidency, and open consultations by the Secretary-General and the United Nations Sherpa with Member States in the General Assembly before and after G20 summits.
JAN ELIASSON, Deputy Secretary-General, highlighting the important role of the United Nations in enhancing economic governance, said that global economies were being increasingly integrated and becoming interdependent. There was a need to reflect new developments in the global South. Bretton Woods institutions, namely the International Monetary Fund (IMF) and the World Bank, had taken steps in that direction. There was, however, the need for more consistency and interaction among stakeholders through multilateral frameworks.
“The United Nations General Assembly is the only global forum with universal membership; the only one to give equal voice to all members; and the only one to comprehensively reflect the needs of the least developed countries, small States and under-represented regions,” he stated. It was therefore important that the G20 and other multilateral institutions, not least on the regional level, continue to strengthen their engagement with the United Nations on economic governance and other cross-cutting global challenges. At the same time, it was essential to continue efforts inside and across the United Nations system to enhance coherence, coordination and cooperation. “It’s a two-way obligation,” he said.
The upcoming G20 meeting would take place at a time of economic uncertainty and fragility, he noted. From the United Nations perspectives, it was important to put an emphasis on financing for development and ensure that official development assistance (ODA) was not reduced, and renewed vigour was necessary to achieve the target of allocating 0.7 per cent of gross domestic product (GDP) for such aid. Millennium Development Goals were the most successful framework in history to reduce poverty. However, with less than 1,000 days left before the 2015 deadline, much remained to be done.
It was also important, he underscored, to look beyond 2015, incorporating unfinished targets into the post-2015 goals. During the last decade, the global economic and environmental landscape had changed dramatically. Climate change had become a central issue on the international agenda. A range of other concerns had arisen, including the ongoing impact of the world financial and economic crisis and challenges related to food, water and energy security. Therefore, it was necessary to strengthen the existing economic governance.
J.M. BARROSO, President of the European Commission, stated that no nation or group of nations could prosper on the wreckage of another. “We are all neighbours,” he stressed, and “no country is big enough to be immune to what happens next door.” Therefore, it was essential to maximize the opportunities that interconnectedness had to offer, he said, pointing out that the European Union was no stranger to interdependence. As the world’s largest single integrated market, it was charged with the question: How best can a group of States work together and be effective in its policy responses?
What the European Union had learned in that respect, he said, was that “shared problems have led to shared solutions” for the bloc. All of its member States were united by a single market and common institutions, and 17 of those members were united by a common currency, the euro. A system of rules enabled better economic monitoring and swifter sanctions, if needed. Efforts continued to strengthen the system with new laws ensuring that the 8,000 banks in the European Union system were more resilient. While open economies and free and unimpeded international trade were crucial to a global recovery, he nevertheless wished to be clear: the European Union’s bilateral trade agenda did not replace its commitment to the World Trade Organization or to the Doha system, in which the European Union would continue to move forward.
Turning to the European Union’s interaction with the G20, he said that the global financial crisis had been a “watershed” in global economic governance. The European Union had realized it required a coordinated response, and that a new forum was needed to bring together both existing major players and emerging markets. The G20 had proven itself a valuable forum. Reviewing its crisis response, he underlined the global fiscal stimulus programme; global regulatory reform; and a solid agreement on the importance of resisting trade protectionism.
He also noted that the G20 had also placed development and the fight against poverty high on its agenda. The goal was strong, sustainable and balanced growth. “The European Union has actively shaped the G20 agenda,” he said, adding that, while he believed that the forum had achieved a lot, more action needed to be done on many fronts. Past commitments needed to be respected and new challenges addressed.
Fairness was important, he continued, reiterating that “it is not acceptable that a nation or group of nations prospers at the detriment of others.” For example, tax evasion cost the European Union 1 trillion dollars each year, a sum that should be spent on education, skills training and other important programmes in both developed and developing countries. There was a need for a global approach to improve tax systems everywhere, he said in that respect, noting a number of European Union initiatives to combat tax fraud and tax havens. The bloc also strongly supported new multilateral standards in the context of the Organisation for Economic Cooperation and Development (OECD).
KAMLA PERSAD-BISSESSAR, Prime Minister of Trinidad and Tobago, noting that her statement represented small-nation States, said “the General Assembly must play a major role in global economic governance”. Her country, due to its energy-driven economy, international reserves and low public debt level, had escaped the worst shocks of the global financial crisis in the first round; however, many of her country’s neighbours in the Caribbean Community (CARICOM) as well as other small States had not been so fortunate.
Developed economies, she said, continued to face multiple challenges, while growth in some major emerging market economies had slowed in recent months partly due to the effects of the euro crisis. While the resolution of the crisis had been long in coming, it was clear that the full extent of the problem was not yet evident. The initial concerns had been about Italy, Spain and Greece. Now the most recent focus had been on Cyprus, and questions continued to be asked about which country would be next.
With dwindling donor support and the erosion of trade preferences for agriculture, she said that CARICOM nations needed to simultaneously engage several strategies to ensure their survival, including, among others, lowering debt to create fiscal space, reducing dependence on United States and European markets, creating new ties with emerging market economies, and improving their competitiveness. Such strategies required time, finances and support from the international community. Focus was also needed on concessional financing for infrastructural development; access to markets for their products, including tourism; debt relief for highly indebted countries; and technology transfer.
She pointed out that international financial regulations did not support a level playing field between small and large States. The preferential treatment given to areas important to some large States, such as mortgages, proved dangerous in the financial crisis. Further, lending criteria used by the multilateral institutions was better suited to larger States with capital markets, credit ratings and diversified private sector players. The criteria used for long-term and short-term support paid too much attention to the level of gross domestic product per capita and not sufficiently enough to the much higher levels of fragility and vulnerability to natural and economic shocks.
She called on the IMF and the World Bank to intensify attention on the issues of small and vulnerable economies. Ultimately, she stated, global economic governance and reform, as articulated by the G24 central bank officials and finance ministers last year at the IMF-World Bank Annual General Meetings, “must reflect the growing role of emerging market developing countries as a whole in the global economy, while enhancing the voice and representation of poor and small low and middle income countries.”
ALI BABACAN, Deputy Prime Minister of Turkey, said that a substantial shift was now taking place, with emerging markets taking on a new global economic prominence. To keep pace with those changes, there had been governance reforms in both the World Bank and the International Monetary Fund. In addition, the rise of the G20 — an informal platform to discuss emerging issues and threats — was a natural outcome of that shift. The key element that made the forum successful was the principle of frank discussion, he said, adding that, in a way, the G20 shepherded discussions towards a mutually beneficial path.
However, the main challenge, he pointed out, was balancing effectiveness with representativeness. The United Nations represented one end of that spectrum, as a fully representative body that was sometimes unable to take timely and effective decisions. The G20 was somewhere in the middle of that spectrum, as it engaged outside stakeholders and undertook many outreach efforts. He agreed that the G20 and the United Nations could take a more enhanced coordinated approach to their work.
Both formal and informal mechanisms were important, he went on to say. In that regard, a number of possible channels could be explored, including briefings by the G20 presidency at the United Nations; high-level thematic debates with the participation of Bretton Woods institutions and G20 member States; and reform within the United Nations system itself. As well, “the United Nations should also adapt itself to the new realities of our age,” he stressed.
Turkey, he noted, had contributed substantially to the activities of the G20, and it would have the forum’s presidency in 2015. At that time, it would give priority to outreach activities with non-member countries and international organizations. “We should step up our efforts” so that developing and emerging economies could benefit more significantly from the structures of global economic governance, he said. Moreover, all three pillars of sustainable development should be taken into account. To that end, there was a need for a more transparent, accountable international system in order to achieve the goal of sustainable development.
He underscored that a fair, free, norm-based and non-discriminatory multilateral trading system was at the heart of sustainable development. “We have to be very careful about protectionism,” he said, adding that “at the end of the day” protectionism hurt citizens. Since 2007, many countries had been facing financial, economic, social and political crises. However, at the core was a “crisis of confidence”. Consumers would spend only if they were confident in the future and banks would lend only if they could see what was coming. Expansion in itself would not work if confidence was not secured. Difficult but necessary structural reforms were therefore crucial.
ALFREDO MORENO CHARME, Minister of Foreign Affairs, Chile, said that the international economic challenges facing countries were being tackled with uncoordinated individual measures or with mechanisms of international collective action not keeping pace with events. The world was not successfully overcoming the economic and financial crisis that began in 2008. The response of the international community raised questions about the efficiency, effectiveness and coordination of the existing mechanisms of global economic governance.
When informal ad hoc groups, able to influence the world’s economic performance, were formed by the principal world economies, their decisions affected the remaining countries of the world, he went on to say. Multilateralism should be an instrument for dealing with global challenges in an inclusive manner. However, this was not possible when key decisions were “being taken in restricted — club-like — multilateral arenas”, such as the G20. That questioned such groups’ legitimacy and posed a danger to the inclusive multilateralism of the United Nations, the Bretton Woods institutions and other such institutions and prevented many countries affected by such decisions from participating and defending their interests.
The G20 must be opened to non-members, he stated. Further, there should be enhanced mechanisms for cooperation and consultation with the United Nations. He would welcome G20 coordination if it were focussed on filling a gap in the management of the global economy, where no suitable mechanism for cooperation existed within the United Nations system. The Global Governance Group believed that informal groups, such as the G20, should respect the mandates of the institutions and mechanisms of the United Nations system. If multilateral mechanisms did so, a basis for complementarity could benefit everyone.
He then presented four contributions, on behalf of Kenya, Singapore and Switzerland with the support of the Global Governance Group, and co-sponsors, including members and non-members of the G20, towards a General Assembly resolution which would include, among others, general approaches to facilitate coordination and complementarity between players and mechanisms for global economic governance; formalization of mechanisms to institutionalize existing improvements in relations between the United Nations and informal country groups, including the G20; and identification of actions needed to fill gaps and correct shortcomings in global economic governance.
ABUL MAAL A. MUHITH, Minister of Finance of Bangladesh, said that the debate was a sort of superior Economic and Social Council, designed to strengthen coordination between the United Nations and financial and development institutions. He noted that previous speakers had discussed what should be done to strengthen coordination between the G20 and the United Nations. Elaborate recommendations asking for attention to certain sectors had been made, such as how to manage currency, banking, international trade and tax laws and regulation better. In that regard, international taxation and corruption should be added to that list.
The United Nations, he pointed out, had begun its journey dividing the world into developed and developing countries. It had been able to define least developed countries, landlocked countries, small island developing States, and climatically vulnerable nations. The number of those nations totalled 152. However, since least developed countries were counted multiple times, the actual number of those countries would be about 100. Although those classifications were in place, the United Nations had not found the definition of small nations.
The ultimate objective of all activities, he continued, was to eliminate poverty and ensure equity. Hence, there was a need for a new classification for those countries. It was essential to ensure the transfer of technology and resources, including access to markets. He also proposed using the term “socio-private economic development” instead of “socioeconomic development”. Lastly, he stressed the need to have a governance mechanism for food and oil.
HEIKKI HOLMÅS, Minister of International Development, Norway, said “we need a better organized world where countries are held accountable for their actions,” noting that the collapse of Lehman Brothers, which had initiated the economic downturn of 2008, had had a real impact on real human beings globally. There was a need to give voice to smaller countries in economic and financial governance and to anchor groups such as the G20 to the United Nations, the International Monetary Fund (IMF) and other such international organizations. Not only should civil society be given a voice, there was a need for transparency, as the lack thereof had led to the financial crisis and to the faltering recovery efforts.
He went on to say that it was vital for the United Nations to focus on the area of tax matters and urged that the United Nations group of experts on taxes should be elevated to a more formal status in the Organization. Many developing countries were experiencing good growth, but needed greater tax revenues to further development. Many of the poorest people now lived in middle income countries. There was an international trend towards growing inequality and a growing income gap. The post-2015 development agenda must put measures in place to reduce that gap. As well, redistribution plans to reduce inequality must be established.
Developing countries needed a better tax system to create revenues, he continued. Thus, it was important to prevent “tax leaking” into “so-called tax havens”, a misnomer, he said, as those countries were really “tax parasites”. Not only were the wealthiest people placing their money in those tax havens, but so were the largest corporations. There was a broad reliance on such tax havens, which was now being felt by all countries in the form of reduced revenues. He invited delegations to create a convention on transparency that would give insight into the tax havens and allow countries to get their legitimate share of tax revenues. “The old ways are wrong ways,” he said in closing. The international community needed to find new ways that stressed transparency, accountability and social justice.
VALENTIN RYBAKOV, Deputy Foreign Minister of Belarus, said that the theme before the Assembly was not new. However, two factors had contributed to a new and heightened interest in it: the global economic and financial crisis that had erupted in 2008, which created a need to review the overall decision-making process; and the rise of the G20 and other informal groupings of States. As the international community began the process of developing a new agenda for the post-2015 period, he underscored that “we all need to come to an agreement about what global economic governance should be.”
First, he said, one should avoid the further juxtaposition of two concepts: legitimacy associated with the United Nations, and effectiveness associated with the work of the informal groupings. Instead, a “win-win” situation must be achieved. The United Nations must continue to be the platform for considering the interests of all States and groups of States. Indeed, if the process was not inclusive, it would be neither legitimate nor effective.
In addition, he continued, the United Nations must also ensure “fair rules of the game”, which would apply to all countries equally, without exclusion. It was encouraging to see growing interest of the G20 in issues of global development, he said, citing the Seoul Development Consensus for Shared Growth, adopted by the G20. In that regard, he emphasized that “the work of the United Nations and the G20 for development can, and must, be complementary.”
For example, he said it would be sensible to organize consultations between United Nations Member States and the G20 on the eve of the latter’s summits, where priority would be given to development issues. Effective cooperation must also be established between the G20 and the Economic and Social Council. Among concrete measures, he suggested that the Council establish declarations targeted to Member States, containing the Council’s expectations for upcoming summits.
NÉSTOR OSORIO (Colombia), President of the Economic and Social Council (ECOSOC), said that pressing challenges and trends required forceful and internationally coordinated policy responses, and would be best addressed through a more accountable, inclusive and coherent system of global economic governance. Such a system would entail collective decision-making among diverse stakeholders at the international level. Although the Millennium Development Goal strategy had had important achievements, there was a current need for a more structural approach that could deliver on the transformative change required to address emerging challenges and suggest credible strategies.
In that regard, he said, a renewed global partnership for development was an essential element in the context of the post-2015 development agenda. That renewed global partnership should implement a development strategy capable of promoting inclusive growth with job creation, while guaranteeing environmental sustainability. He supported strengthening the role and effectiveness of the United Nations. To that end, a strengthened ECOSOC would contribute to more coherent global economic governance and in areas where enhanced cooperation could be achieved.
In addition, he supported putting in place more robust accountability mechanisms to monitor progress in the implementation and fulfilment of commitments made by Member States. The G20 should continue to strengthen its engagement with the United Nations, through more institutionalized, predictable and regular channels. Also essential was the active participation of civil society and the private sector in dialogue and activities related to development. He said he looked forward to next week’s high-level meeting of ECOSOC with the Bretton Woods institutions, the World Trade Organization and the United Nations Conference on Trade and Development, where issues relating to sustainable development would be discussed.
PAUL OQUIST, Minister-Private Secretary of National Policy for the Presidency of Nicaragua, said that, historically, the United Nations had been excluded from world economic governance, the argument being that only the IMF, the World Bank, the United States Treasury and Wall Street had requisite expertise. The 2008 financial crash made questioning that argument more feasible. The 2009 United Nations Conference on the Financial and Economic Crisis and its Impact on Development had produced actionable recommendations on strengthening the Organization’s role in economic governance, an approved agenda, however, that was still pending.
The crisis was now six years old, he said. Yet, as they had since 1945, Europeans continued to head the IMF and a United States citizen had, since 1946, continued to head the World Bank. The United States Financial Market Modernization Act of 1999 had eliminated the firewalls between investment banking, retail banking, stock brokerages and insurance and reassurance companies. In 2000, the United Nations also had legalized most derivatives, firewalling them against regulation. In the 1980s, the percentage of total world profits of the financial services sector was 6 per cent. By 2007, the figure had reached 40 per cent of total corporate profits, indicating accumulation at the expense of productive sectors.
Some cited the G20 for world economic governance, he observed. However, the Group of Seven (G7), Group of Eight (G8) and G20 were ad hoc bodies with no legal basis. The G20 could not make binding decisions for everyone. To hold the contrary would be tantamount to saying once again in human history that the richest and most powerful would decide the fate of everyone. In the twenty-first century, an anti-democratic position was not viable in any national societies. “Why should we accept it for our world economic governance?” he said.
He said it was an illusion that the improvisations of the past six years constituted some sort of economic governance system. On the contrary, they were prolonging the crisis by ignoring underlying structural factors. He called for the need for democratic world economic governance to regain world macroeconomic stability. In that regard, there was a need to reinvent the United Nations for economic governance, among other purposes. “This is a task at hand, and there is no substitute for the United Nations to ensure the legality, legitimacy and credibility of the process,” he stated.
SIDDHARTH TIWARI, Director, Strategy, Policy, and Review Department, International Monetary Fund, said that global economic governance was increasingly challenging, with deeper trade and financial integration creating greater possibilities for shocks and spillovers among countries. The rising cross border interconnectedness raised questions on policies for stability. However, there had been progress in recent years in better supporting the membership.
There were three areas of concern, he said, including the support of good policies to reduce negative outcomes; ensuring the availability of adequate financing when negative outcomes emerged; and implementing effective changes in governance to promote a more inclusive outcome. Regarding adequate resources, he pointed out that funds had doubled since the start of the economic crisis, and in 2012, an additional $450 billion in resources had been pledged to the Fund from a broad spectrum of countries.
On debt relief for the highly indebted poor country initiative, he said that 90 per cent of those eligible had received such relief. In addition, a new lending framework had enabled large financing on a precautionary basis and lending limits had been increased, among other things. The same changes had been made to concession facilities, creating a flexible and streamlined financial architecture able to respond quickly to country needs.
Turning to the issue of governance, he said that better global governance required better institutional governance, including for the Fund, which had made good progress in reflecting the changes in the dynamic shares of countries in the world economy. Among the reforms discussed were the doubling of quota elements; a shifting of quota shares to the dynamic economies; and a move to a system where all 24 countries would elect their chairs and no country would be appointed.
HARSHA V. SINGH, Deputy Director General of the World Trade Organization (WTO), said that, as the discussion on the post-Millennium Development Goals framework unfolded, the role of the United Nations in global economic governance was an important one. Therefore, it was critical to ensure efficiency, as well as legitimacy and coherence, so that what a country did with its right hand was consistent with what it did with its left. In that regard, there was a “triangle” formed by the United Nations General Assembly, the G20 and the World Trade Organization.
The global economic and financial crisis had been fuelled by a lack of regulatory oversight, he said. However, there had been a resurgence that prevented the impact of the crisis from being more devastating than it had been, and the fact that the United Nations had also supported that collective response had strengthened that response. While the deadline to conclude the Doha Round had not been honoured, the international community now had in sight a series of deliverables for the upcoming conference in Bali, Indonesia. There were potential outcomes in the areas of agriculture and others, he said.
One specific area in which the G20 had shown its muscle, he said, was in resisting protectionism and keeping markets open. That recognition was important, as such actions would be counterproductive — in other words, a series of “tit-for-tat” protectionist actions. Moreover, there were new trends in the ways that goods and services were traded. Things were now “made in the world” as opposed to in particular countries, he noted, pointing out that almost 60 percent of goods were now traded through intermediates.
However, he warned, the world would continue to see challenging times. Trade growth in 2013 would be sluggish, estimated at only 3.3 per cent, well below the pre-crisis trend in the 1990s of 6 per cent. Spotlighting other areas in which United Nations agencies and the G20 interaction had had a particular role in supporting developing priorities, he cited trade finance, aid for trade and food security, where a task force across the United Nations system had proven invaluable in providing coherence. That, in particular, was important in light of increasing droughts and crop failures due to climate change.
Overall, he said, “the solution is to focus on where the comparative advantages lie” in the various groups and organizations, and to leverage them for results. The United Nations must be a true partner in that respect, he said, adding that a “revamped” Economic and Social Council should run the day-to-day elements of that partnership.
ZIA QURESHI, Director of Strategy and Operations for the Office of the Senior Vice President and Chief Economist of Development Economics at the World Bank, said that the role of emerging and developing economies in the world market had been rising. Their share in global gross domestic product was approaching 50 per cent, and their contribution to global economic growth had been even higher, accounting for up to two thirds of total global economic growth over the past five years. However, there was a lag in those economies’ equivalent representation in the global economic governance system.
From that perspective, he said, the emergence of the G20 had been a positive development, broadening discussions on policy and policy coordination to one that included the major emerging economies. It had endeavoured to reach out to other countries that were not its members, including through the United Nations system at meetings such as the current debate. In that regard, it was crucial to balance effectiveness — through keeping the Group relatively small — with inclusivity.
The World Bank, he continued, was actively engaged with the G20, and particularly active in the G20 growth framework and the development working group, in which it dealt with issues of infrastructure, food security, financial inclusion and trade. The Bank was currently taking the lead in long-term financing for growth and development, a topic of broad interest to developing countries. Financing was also important for the Bank in its support of the post-2015 development framework. Indeed, ending extreme poverty and boosting shared prosperity were the overarching goals of a new World Bank strategy that was now being developed.
Finally, he noted, in addition to supporting more inclusive and effective global economic governance, the World Bank had made progress in reforming its own strategies. This included a “voice reform” that would see the voting share of emerging economies rise. An Executive Director seat had been also added for African countries in order to boost their representation.
ALBERT CHUA (Singapore), speaking on behalf of the Global Governance Group, said that an inclusive framework of global governance was more necessary than ever before. The United Nations should continue to lead the effort in shaping the framework, as it was the only global body with universal participation and unquestioned legitimacy. It was also essential to strengthen the relationship between the United Nations and the G20, with G20 outcomes receiving the support of non-G20 members in order to be implemented effectively across the globe. Such a global economic governance framework could not be the sole function of a single entity, he added.
He said that he supported the appointment of a senior official to oversee G20 engagement with the wider United Nations membership. The G20 should, as well, continue to deepen the application of the principle of variable geometry to allow for the participation of non-G20 members on issues important to them. In addition, the G20 should find ways to incorporate the input of non-G20 members and groupings into its outcomes. Although the United Nations was the central forum in which the broadest issues of global cooperation were taken up, there was room to reform its internal processes and working methods, so to stay relevant and action-oriented. That included optimizing its workings to provide assistance to Member States with management challenges and enhancing its capabilities to effectively engage all stakeholders.
MURAT KARIMSAKOV (Kazakhstan), stating the world needed a single policy of global governance, said that his country would be initiating the G-Global project, a new format for international collaboration. Its key objective would be to unite the world community under the World Anti-Crisis Conference, which would be taking place during the Astana Economic Forum in May of this year. More than 50 Ministers, Heads of State and Government and international experts would be participating. The Conference should lead to the adoption of a final declaration and priorities for a World Anti-Crisis Plan, to be sent to heads of United Nations Member States and presented at the General Assembly and the G20 Summit, and adopted at the next high-level meeting.
In addition, he said, the G-Global platform, a powerful data bank through which participants from 150 States could generate real proposals on development of both global and national economies, had been created, thus supplementing the G20’s role in forming world economic policies. A virtual conference would be launched on the platform, commencing in April and continuing into May of this year, which would offer participants the opportunity to provide input for the Anti-Crisis Conference. All the resources needed to host the upcoming World Anti-Crisis Conference were in place, he said, noting that its foundation, the Sixth Astana Economic Forum, was one of the largest economic events in the world and had 50 co-organizers and partners, including numerous United Nations system organizations and private sector partners.
The representative of Mexico said his ministry faced one big challenge — the broad issue of foreign policy. The United Nations faced the same challenge because of its wide-ranging mandate with heaps of actors involved in almost every item on the to-do list. The international economic governance system was now too complex for centralized oversight and decision-making. It was not a system of “one wheel with many cogs” but was a system of “many wheels with many cogs”. It was, overall, dynamic.
The flagship achievement of the Mexican presidency of the G20, he continued, had been to create a commitment of support for the IMF in excess of $450 billion. Although it had made for fantastic headlines, he questioned whose success it was, underscoring that everyone involved would be able to claim it as a victory. He said it was also a model of how the G20 needed to interact with other bodies, noting that that particular steering committee of the Fund had been chaired by Singapore. The G20 and that committee had worked together to bring on board as many countries as possible.
Lastly, he stressed that the United Nations had the capacity to sit people and institutions around the table to dissect the different issues and generate a balanced cross-sectioned view. He stressed that his country had put in a lot of outreach effort to make sure that G20 took on different points of views. The effort had been well received and the process had been enriched.
HA HUY TUAN ( Vietnam) said that, besides the shortcomings of national growth models, inefficient policy coordination at the global level was a major cause of the prolonged decline of the world economy. An example was the rise of trade protectionist measures, despite their known adverse effects. He supported efforts to reform global governance systems with the aim of ensuring democracy. That could be accomplished through enhancing developing countries’ participation and enabling them with better access to international resources.
He expressed his support for the role of the United Nations in coordinating and promoting cooperation and policy among Member States in such areas as investment, development assistance, technology and knowledge transfer. Also important was strengthening partnerships between the United Nations and other multilateral institutions, such as the G20, and regional organizations, such as the Association of Southeast Asian Nations (ASEAN). On a national level, he said Viet Nam had implemented bold reforms in areas such as restructuring public investment, the financial-banking sector, and State-owned enterprises.
LUKE DAUNIVALU (Fiji), speaking on behalf of the “Group of 77” developing countries and China, said that the Organization had a central role to play in finding common solutions to problems of a social, cultural, economic or humanitarian nature. The General Assembly, along with a strengthened Economic and Social Council, could act to mitigate the effects of crises and ensure countries’ right to their own policy space. Moving towards a more accountable and inclusive system of global governance required work with the General Assembly, he continued, adding that efforts to reform the global financial architecture should be “seriously strengthened”.
He stated that the Group supported comprehensive reform of the Bretton Woods institutions, as well as the enhancement of developing countries’ voting power. Among other things, the United Nations system should seriously address the interlinkages between global economic governance and sustainable development. This could be accomplished through policies that promoted equitable economic growth and that addressed such challenges as sovereign external debt sustainability and circumstances resulting from climate change. Finally, he said, the Group was of the view that the post-2015 development agenda should rely on the General Assembly as the appropriate forum to make decisions of a global economic nature.
Briefing by G20 Sherpa
Opening the afternoon session, KSENIA YUDAEVA, the G20 Sherpa of the Russian Federation, briefed the Assembly on the priorities of that country’s presidency, which concentrated on developing measures aimed at boosting sustainable, inclusive and balanced growth and job creation around the world. She said that the discussion on all the interconnected issues of the G20 agenda was organized around three overarching priorities focused on starting a new cycle of economic growth. They included growth through quality jobs and investment; growth through trust and transparency; and growth through effective regulation. Those three priorities would serve as a lens through which to consider and discuss the G20 agenda in eight specific areas.
The first of those areas, she said, was a framework for strong, sustainable and balanced growth. Key tasks included the revisions of country-specific medium and long-term public debt targets, among other things. Financing for investment was a key precondition for economic growth and a principal factor for job creation. In that vein, a study group on financing for investment had recently been established in Moscow to analyze relevant policy, as well as the role of public-private partnerships, sources of long-term financing, debt and equity markets. International financial architecture reform was another key area, covering a wide range of issues and including International Monetary Fund quota reform. On strengthening financial regulation, the G20’s main task was to support the Financial Stability Board’s work in carrying out the agreed reform agenda.
She then turned to employment, stating that the G20 would focus its work on three major pillars: job creation through sound monetary and fiscal policies, structural policies to foster innovation, and promotion of smaller enterprises; labour activation for vulnerable groups; and monitoring of labour market development and the implementation of previous commitments. Emphasizing that mutually beneficial trade policies were crucial for a fast global recovery from the financial and economic crisis, she stated that “the G20 needs to push forward the strong demand for developing multilateral trade and investment as a growth driver, and the strong multilateral trading system as a necessary condition for it”.
Regarding energy sustainability, she said that affordable and reliable energy was a precondition for growth. At the same time, the energy industry itself was an important growth engine for G20 economies. On the subject of fighting corruption, the G20 would focus its work on the implementation of the G20 Anti-Corruption Action Plan 2013-2014, targeting its work on five key areas: implementation of the United Nations Convention against Corruption; combating foreign and domestic bribery; international cooperation, including on the issue of money laundering; cooperation with the private sector and civil society; and enhancing transparency and accountability.
The Russian presidency had positioned development as a top priority, she went on say. The expiration of the Seoul Multi-Year Action Plan on Development enabled G20 countries to reassert their commitments and reprioritize their development agenda. That process was aligned with the United Nations creation of a post-2015 development agenda. In that context, the G20’s work on development should focus around: food security; financial inclusion; human resource development; infrastructure with a focus on long-term financing; supporting the United Nations efforts to create a post-2015 development agenda; and the development of an accountability mechanism to assess progress on the previous G20 commitments.
In the ensuing interactive dialogue, Ms. YUDAEVA was asked to elaborate on the Russian Federation’s cooperation with different organizations and outreach activities in the G20 presidency.
She said her Government was actively cooperating with different international organizations, including United Nations entities, and had established constructive dialogue with them. In fact, two weeks ago, her team had met with United Nations organizations in Geneva. Furthermore, her Government was open to cooperation, including groupings in Africa and the New Partnership for Africa’s Development (NEPAD) countries.
In response to the United States’ delegate, she said that the Russian Federation also reached out to civil society and business circles, inviting them to make presentations in various meetings because they provided interesting inputs.
The representative of Morocco pointed out the G20 lacked continuity of its development policy, as priorities changed from presidency to presidency. It also lacked a mechanism for accountability.
Bangladesh’s speaker stressed the importance of having consultations with three groups, namely the least developed countries, climate vulnerable nations, and small island developing States, when it came to the issues of trade and access to technology and resources.
Responding to those concerns, Ms. YUDAEVA said that her Government planned to create a development agenda and would consult with those groups.
Interactive Panel Debate
The General Assembly then held an interactive discussion, which examined the changes in the global economic governance system, including lessons learned from the economic, financial and debt crises and best practices of the G20 outreach, ways in which communication between G20 and non-G20 could be regularized and the future of global economic governance and the General Assembly.
Moderated by Shamshad Akhtar, Assistant Secretary-General for Economic and Social Affairs, the discussion featured panellists Shaukat Aziz, former Prime Minister of Pakistan; Ian Bremmer, President of the Eurasia Group; Jeffrey Sachs, Columbia University; and Gordon de Brouwer, Sherpa of the incoming Australian G20 presidency.
Mr. AZIZ said that the challenges of globalization combined with numerous crises made it difficult for countries to implement their policies alone. Those crises had increased the needs of countries in the developing world, putting the Millennium Development Goals, both those achieved and those yet to be, at risk. The increase in regional cooperation also presented challenges as well as opportunities. South-South cooperation had now shown its relevance. The rising prominence of informal groups, primarily the G20, raised the question of global inclusiveness. In short, the economic environment was radically different from what it had been ten years ago.
Establishment of a global financial governance system required understanding inherent strengths and weaknesses, he said. Formal and informal systems were both State driven. Touching on the role of the Economic and Social Council, he also said that most important to global governance were the Bretton Woods institutions. The key concern was giving a voice to developing and least developed countries. The International Monetary Fund and the World Bank needed to be restructured to reflect new realities. Pointing out that the World Trade Organization was the only entity regulating international trade, he noted that it had no agreement with the United Nations. The informal system was composed of self-appointed groups, which raised questions as to their legitimacy. Any group’s effectiveness should be seen through better policies for coherence and should consider the entire international community.
Concluding, he said that the United Nations had taken measures to strengthen global coherence. Among other efforts, he noted that the Monterrey Consensus and Doha Declaration had become major reference points for global development. However, the decision-making process of the General Assembly sometimes made it slow to reach consensus. The United Nations, with its unrivalled convening power and broad mandate, remained the major forum for global economic governance.
He then asked how the Organization could be strengthened in that regard, whether by creating new structures or increasing coherence with other organizations. Linkages between the Organization and other financial groups should be enhanced and formalized so that decisions were owned by everyone. It was imperative that reforms of existing institutions ensure a balanced, representative and coherent system with elements that worked in tandem rather than at odds with each other. Leadership was needed. There was no reason that could not be achieved, thus bequeathing a better world to ensuing generations.
Mr. BREMMER, stating his scepticism about the ability of G20 to engage in global economic governance, said that the reality was that the G20 was not working. Rather, the reality was the G-zero. There were too many countries to coordinate. The G20’s ability to enable its members to talk to one another in two or three days of meetings was very limited. In addition, new emerging countries were different in capability, priority and value. Emerging economies were poor, with different political systems.
China, for instance, was on track to become the world’s largest economy, he said. However, its activities, based on its stage of development, were more bilateral, rather than multilateral or global. The allies of the United States were busy. European Union States were preoccupied with their debt problems. Japan had had 17 Prime Ministers in the past 20 years. The United States was focusing more on domestic economic issues as it became more self-sufficient in energy. Those were the challenges facing the G20 in addressing global economic governance, which was ad hoc and fragmented. He was not talking about the end of globalization, he emphasized, but about fractured globalization.
Mr. SACHS said there were five reasons why global economic governance was not working. There was no functioning international financial system to stabilize the market. Development financing had waned, as high-income nations started feeling the effects of the global economic crisis of 2008. The United Kingdom, which had taken a stance to increase official development assistance despite its financial constraint, was not a norm, but an admirable exception. He also noted that tax havens, such as the Cayman Islands and the British Virgin Islands, had helped create a system of corruption and illegality.
He also cited growing environmental costs stemming from inaction on climate change and loss of biodiversity, to name a few. Over the past 20 years since the Earth Summit in 1992, there had been almost no results in those areas. In the United States, oil companies had been so powerful that they prevented politicians from saying a word about environmental protection. The society was growing unequal, with the rich becoming super rich and the super rich becoming super powerful. The United States had the most billionaires; however, China was catching up.
The G20, he said, was a step in the right direction because the rich nations could not run the show any more. Nevertheless, the Group could not be a problem solver. At G20 meetings, it took five hours for participants to finish their first statement. With membership of 193 countries, the United Nations was even trickier. In that regard, it was an admirable step that the General Assembly and G20 had started a dialogue, which he hoped should become institutionalized. Lastly, he stressed the importance of sustainable development goals in order to give the world a direction. A stronger regionalism was also vital, as a handful functioning groups, such as ASEAN+3, the African Union and the European Union, could contribute to finding solutions.
Mr. DE BROUWER, Sherpa of the incoming Australian G20 presidency, said that the G20 was set up in 2008 as an informal political meeting of country leaders to address the financial crisis. It was not established as a rule-making body. Rather, it was complementary to and supportive of the United Nations, which the G20 recognized as the major global body. The G20 wanted to support the Organization, the Bretton Woods institutions and other United Nations system agencies with which it worked. Under the Russian Federation’s presidency, strengthening coherence was a priority.
The G20, he said, had contributed in a number of ways: by setting out a programme of global economic reform; through establishing, for itself, a framework for economic growth and development recognizing the global responsibility of countries; and by playing a role in buttressing IMF funding, among other achievements. Looking ahead, the immediate concern was how to lift economic growth, create jobs, and promote development. Noting that the economic outlook was “miserable”, he said that there must be new sources of growth, particularly through private sources.
Another way for the G20 to contribute, he went on to say, was through helping rising economies take their proper place in the global economy. Those markets offered an opportunity to take people out of poverty. In that regard, the G20 asked how the institutions that set the rules for global governance could support the needed changes. The G20 was and wanted to be, he stressed, engaged with the forum and looked to continue, in the future, an open and inclusive conversation, inclusive of civil society, business and labour groups. Openness and communication were essential to generating and implementing ideas.
The Committee then resumed its consideration of statements by delegations.
WANG MIN ( China) said that the United Nations should fully reflect the role of global economic governance in promoting development. Further, it was important for international financial institutions to strengthen their functions of development and poverty reduction and make international financial regulation better targeted and more effective. Also essential was the creation of a free, open, fair and equitable global trading environment, reducing trade barriers, boosting trade and increasing support for developing countries in conducting trade with other countries. Debts owned by developing countries should be further reduced or exempted and markets should be made open. He called for greater cooperation between the United Nations and such institutions as the G20 and the Bretton Woods institutions, which had the potential to provide useful support and heed the views of non-members, those of developing countries in particular.
PALITHA T. B. KOHONA (Sri Lanka) said that a more democratic and inclusive global economic governance, sensitive to the needs of the people, was essential. In formulating sustainable development goals, the role of Bretton Woods institutions in financing green development should be fully explored. Furthermore, the Secretary-General should continue engaging with global financial institutions. As well, he urged a well-coordinated intergovernmental process by the Organization to combat crimes such as international financial fraud. The General Assembly’s high-level political forum must provide strong political leadership, he said in closing.
FRANTIŠEK RUŽIČKA (Slovakia) stated that “the nation-state, as a bedrock economic-political institution, is steadily losing control over international flows of people, goods, services, funds, and technology.” Thus, the United Nations and global and regional organizations, including global investors and companies, must adopt a new philosophy reflecting those processes, and the Organization, in particular, should embrace wider responsibilities in the area of global economic cooperation. All of the “elite multilateralism” organizations did not have the global mandate to provide universal solutions and “must touch ground with universal cooperation”. It was unfair to expect global challenges to be met by the public sector alone, when the assets managed by the private equity industry globally had reached 3 trillion dollars in 2011, despite market turmoil and sluggish economic conditions. The private sector must help to meet those challenges.
MARK LYALL GRANT (United Kingdom), supporting robust global governance and rules, said that the G20 must become more effective in engaging non-members, States, institutions and other actors. Both the G20 and the United Nations had important and complementary roles to play in global governance, and engagement between the two was important. Representatives from non-members have been invited to G20 meetings, which was beneficial to the Group and the broader United Nations membership. The system of governance must continue to deliver on the Millennium Declaration up to 2015 and beyond. There should also be one clear set of goals for the post-2015 agenda. Enhanced cooperation between Governments, regions, globally and across sectors was necessary to achieving those goals.
ABUL MAAL A. MUHITH (Bangladesh) said that what struck him most, in hearing some interesting presentations and various perspectives, was the description of the anarchy of the banking sector. He questioned the role of the IMF and wondered if it was right to accept the Basel framework. He then addressed his concerns about inequality and poverty, stating, “We can live with inequality, but we cannot live with poverty.” It was, he underscored, crucial to reduce poverty through the transfer of technology and resources. The G20 and the United Nations needed to work together with the three important institutions, namely WTO, IMF and the World Bank, in order to address the banking sector’s anarchy and global poverty.
MASOOD KHAN (Pakistan), stating that the G20 was a good forum, noted that it had given traction to the international community by reducing volatility in financial markets in 2008. However, in order to be truly effective, the G20 required partnerships and the United Nations was, in that regard, the best partner. Such collaboration would create energy for huge synergies. The G20 had been a catalyst in consolidating the position and expanding the role of the IMF. Further, the United Nations, with an ongoing role in finding solutions to social, economic and other problems, had the wherewithal to make a difference on the ground.
TARIK IZIRAREN (Morocco) said that the devastating effect of the global economic crisis in 2008 and resultant spikes in food and fuel prices had underscored not only the need for better global economic governance, but the reality that global economies were increasingly interdependent. He then stressed the importance of better regulation and effective supervision, as well as the need to successfully conclude the Doha Round and the next climate change framework. The United Nations had the necessary attributes to tackle issues of global economic governance due to its universal representation. Further, the G20 had played an important role in tackling the 2008 global economic crisis. Therefore, dialogue between the United Nations and G20 should be based on complementarities.
MAURICIO FERNANDO DIAS FAVERO (Brazil), noting the G20’s role in mitigating the financial volatility of 2008, said that global governance must still be inclusive. Developing economies must be better represented in debates on economic issues and the development agenda. The world economic crisis had spurred change. The international community had agreed on the IMF’s 2008 and 2010 reforms. However, those reforms must be fully implemented. He then raised the need to conclude the Doha Round. The United Nations should not compete with international financial institutions; rather it should engage with them. Further, Rio+20 reconfirmed the commitment to sustainable development and to eradicating poverty, which must be the emphasis of the post-2015 agenda.
MARLENE MOSES ( Nauru) said she was surprised that no one had discussed the next bubble threatening to shock the global economic system, that of the carbon bubble, which she described as an immediate challenge to global economic governance. The G20 countries had to deliver on their commitment to phase out inefficient fossil fuel subsidies as soon as possible. In addition, market regulators should require companies to disclose their carbon exposure and risk of stranded assets. International development banks and bilateral donors should reassess their funding priorities to avoid locking developing countries into carbon-intensive development pathways. It was important to better understand the implications of the carbon bubble for those countries that were highly dependent on the fossil fuel sector.
MANJEEV SINGH PURI (India), observing that almost every speaker he heard had said that the G20 had done something good, remarked that such a sentiment was very heartening. Collaboration was key in that regard. However, he had not heard anyone talk specifically about the structure of global economic governance. When the Economic and Social Council was created in 1954, there had been 27 members. Membership eventually doubled to 54 to include countries that had not joined the United Nations at that time. Recalling a speaker who mentioned “governance deficit”, he said that there was a need to initiate a movement toward structural reform of global economic governance. The United Nations could handle economic matters in an equitable manner, including global economic governance.
RAYMOND THULANE NYEMBE ( South Africa) said that the economic crisis had exposed the failure of existing global governance institutions through their intertwined accountability and in other areas. The United Nations, therefore, must play a central role, by virtue of its inclusiveness and its mandate. Further, the Economic and Social Council had an important role to play in global economic governance, among other ways, by coordinating macroeconomic decisions with other global economic activities. Enhancing the United Nations framework and complementarity were essential to proper global economic governance.
JAIRO RODRÍGUEZ HERNÁNDEZ (Cuba) said that the global economic and financial crisis was ongoing. Mentioning the crisis, while reaffirming the central role of the United Nations, was viewed as sacrilege by the major financial powers. They claimed that the Organization was not the best forum. At the same time, they seemed not to notice that, because of them, principal mandates failed to move forward. There had been no viable response from the G20 to commercialization or issues of wealth distribution. Financial groups required greater regulation. The major powers had laid out their privileges, while the rest remained out in the street without jobs. The G20 did not have the right to set the rules. The General Assembly must contribute to laying out a new economic order for global governance.
ERNEST TCHILOEMBA TCHITEMBO ( Congo) questioned the effectiveness of the G20 in providing solutions outside the crisis period. He also broached the possibility of strengthening the Economic and Social Council and its subsidiary bodies in order to improve global economic governance.
KATSUHIKO TAKAHASHI (Japan) stressed that as the world moved towards the green economy, there should not be a duplication of work within the United Nations system. He also said that despite its broad mandate, the United Nations needed not to do everything, but rather select certain issues and concentrate on them. In that regard, it was vital to divide labour with other institutions, such as the World Bank and IMF. He also stressed the importance of exploring financial sources other than official development assistance.
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