Bridging Digital Divide Critical to Economic Opportunities, Delegates Say as Second Committee Takes Up Information and Communications Technology
Bridging Digital Divide Critical to Economic Opportunities, Delegates Say as Second Committee Takes Up Information and Communications Technology
|Department of Public Information • News and Media Division • New York|
Sixty-eighth General Assembly
16th & 17th Meetings (AM & PM)
Bridging Digital Divide Critical to Economic Opportunities, Delegates Say
As Second Committee Takes Up Information and Communications Technology
Unless concerted efforts were taken to close the digital divide, many developing countries could miss economic opportunities, the representative of Nigeria said today as the Second Committee (Economic and Financial) took up information and communications technology.
The information and communications technology sector held tremendous potential for poverty eradication and the socioeconomic advancement of developing countries, he said. African countries had made progress in access to information and communications technology and their application as veritable tools for development. However, broadband deployment on the continent had not kept pace with other regions, resulting in an ongoing gap in digital and broadband access between developing and developed countries.
In that regard, greater emphasis should be placed on reducing the cost of technologies and capacity building for greater use and application, as well as an upgrade of the quality and quantity of telecommunications infrastructure, he said.
South Africa’s delegate expressed concern that the Internet was increasingly dominated and controlled by powerful interests. Given her country’s sizable population of young people and high level of Internet growth, it was important for Africa’s development that the Internet remained open and accessible. Many of the Internet’s future users and innovators lived there. Therefore, an Internet governance structure that ensured inclusiveness, accountability and transparency was imperative.
Israel’s delegate said that in just 65 years, his country had earned the nickname, “start-up nation”, with its tech companies leading the world in Internet security and telecommunications services. Thousands of technologies — including instant messaging, virtual keyboards and flash drives — were developed in his country.
Also outlining technological development, the representative of Congo said his country had implemented a cyberstrategy that gave priority to the development of fibre-optic networks. Five mobile phone companies were now operating in Congo, which created jobs and allowed for a more diversified economic base.
Bangladesh’s representative said that even in remote villages, people had access to digital services such as birth records, mobile banking, life insurance, exam results and remittance receipts at almost no cost. Technology was also used to ensure an effective distribution system. Farmers, who made up a majority of the working class, received market information on their cell phones, giving them data they could put to use to negotiate fairer prices for their produce.
Several delegates emphasized the need to continue to review and uphold the outcome of the World Summit on the Information Society, with the delegate of Azerbaijan saying that his country had launched programmes in building the broadband infrastructure.
Brazil’s representative stressed that recent revelations about a global network of electronic surveillance had shown serious violations of human rights and civil liberties in the name of fighting terrorism. That was “not only immoral, it was illegal”. The international community needed to side-step the “false dilemma” between free speech and privacy on one hand and security in the cyberspace on the other. Speech could not be deemed free without the guarantee that information flows remained private.
The delegate from the United States said that in light of recent reports of its interference in international cyberspace, it would review its practices. She reiterated her commitment to an open and interoperable cybersecurity atmosphere, saying that its longstanding policies on privacy and human rights had not changed. All must reap the benefits of information and communications technology.
In the afternoon, the Committee held a joint meeting with the Economic and Social Council on “Inequality, Growth and the Global Economic Outlook”.
Also speaking today were representatives of Fiji (on behalf of the Group of 77 and China), Trinidad and Tobago (on behalf of the Caribbean Community), Brunei Darussalam (on behalf of the Association of Southeast Asian Nations), Ethiopia, Belarus, Chile, India, Mexico, Malawi, Thailand, Qatar, Russian Federation, Serbia, China, Côte d’Ivoire, Montenegro, Bahrain, Singapore, and a representative of the European Union delegation.
A representative from the International Telecommunications Union also delivered a statement.
The Committee will meet again on 23 October at 10 a.m. to conclude its consideration of information and communications technology and begin its consideration of globalization.
The Second Committee (Economic and Financial) met this morning to take up information and communication technologies for development. Before it was the report of the Secretary-General, on the “Progress made in the implementation of and follow-up to the outcomes of the World Summit on the Information Society at the regional and international levels” (document A/68/65–E/2013/11).
Introduction of Reports
MUSSIE DELELEGN AREGA, of the United Nations Conference on Trade and Development (UNCTAD), introducing the report on information and communications technologies for development (document A/68/65-E/2013/11), said that while access to technology continued to increase around the world, it had not contributed to bridgingthe digital divide. In same vein, people in developing countries were increasingly accessing content through their personal computers, tablets and mobile phones thereby accessing information and communicating in more sophisticated ways. Due to the growing appeal of smart phones, more people were accessing the Internet through mobile devices. There were several challenges in promoting information and communications technology as an enabler for promoting development. Addressing those challenges would be critical to the evolution of cloud computing and increasing access to applications which called for greater focus on wider use and the full involvement of Government. The report further highlighted the need for increased cooperation between the Government, civil society and intergovernmental organizations.
EDEN CHARLES (Trinidad and Tobago), speaking on behalf of the Caribbean Community (CARICOM) and associating himself with the Group of 77, said as a region characterized by small, vulnerable economies with a limited export base and contracting fiscal space, the transformative value of information and communications technologies as a key enabler of development efforts could not be overemphasized and was likely the most important facilitator of regional integration. Many CARICOM countries had begun tailoring national development strategies to achieve sustainable and inclusive development by focusing on innovation and creativity. CARICOM countries focused on mainstreaming information and communication technology activities and developments to effectively contribute to the achievement of the Millennium Development Goals, particularly those related to poverty reduction, education, health, the environment and gender equality.
States in the CARICOM region had a critical role to play and needed to be engaged in the public policy discussion on Internet governance, which needed to be multilateral, transparent and democratic. CARICOM welcomed initiatives to expand the participation of developing countries in the Internet Governance Forum. There also needed to be more efforts to combat the impact of cybercrime. Several challenges remained in regional efforts to implement the outcomes of the World Summit on the Information Society, including insufficient resources, shortages of skills and applications, fragmentation and lack of coordination. The international community was at a pivotal stage and the transformative potential of information and communications technologies must be taken into full account in the context of the post-2015 development agenda.
PETER THOMSON (Fiji), speaking on behalf of the Group of 77 and China, expressed concern about the continuing gap in the digital divide in broadband access between developed and developing countries. The World Summit on Information Society was held a decade ago, he said, placing great importance on the Geneva and Tunis phases of the Summit. The digital economy was a source of innovation and productivity and had the potential to improve all economies.
Hence, it was important to address the predictability, availability, and accessibility of broadband access. The 10 year anniversary of the Summit must serve as the beginning of a new chapter in information and communications technology and it was important to build on the lessons learnt. He reiterated the call for United Nations funds, programmes and agencies to continue to support the implementation of the event’s outcome.
TEKEDA ALEMU (Ethiopia), speaking on behalf of the African Group and associating himself with the Group of 77, noted the digital divide between countries which have high broadband capacity and Internet and those who did not. The information and communications technology sector had been a major economic driver in Africa over the past decade. It enhanced regional trade and integration. Over the past decade, investment in international and national broadband infrastructure had grown, improving connectivity, increasing bandwidth and enabling services including e-Government and development applications.
Ownership of mobile phones and Internet use had grown rapidly, he said. However, broadband deployment had not kept pace with other regions, causing concern that Africa may miss economic opportunities that depended on high-quality communications. At the moment, 45 African countries have national information and communications technology policies, he said, emphasizing the need for improved capacity-building in policy and regulation. He noted that the sector was a critical enabler of development and must be considered a key priority of the post-2015 agenda.
NORAZLIANAH IBRAHIM (Brunei Darussalam), speaking on behalf of the Association of Southeast Asian Nations (ASEAN) and associating herself with the Group of 77, noted that with only two years left towards achieving the Millennium Development Goals, it was imperative for all Member States to maximize the full potential of information and communications technology. Much progress had been made since the World Summit on the Information Society, including enhancing the usage of mobile phones, which was an area of great importance for ASEAN as more than half the world’s mobile subscribers were in the Asia Pacific region.
ASEAN remained concerned with the widening of the digital divide, including that only about 31 per cent of the population in developing countries would have access to the Internet by the end of this year compared with 77 per cent in developed countries. The impact of the global financial crisis had deprived much-needed financing and investment in the information and communications technology sector. ASEAN called on M ember States, as well as the private sector to work hand-in-hand to increase the integrity and reliability of telecommunication networks and the security and resilience of the information and communications technology infrastructure. Integration efforts organized under the ASEAN Information and Communications Technology Master Plan 2015 had resulted in more than 78 per cent of the region’s citizens gaining access to that sector, while the industry now employed more than 11.7 million people and contributed more than $32 billion to ASEAN’s gross domestic product (GDP) annually.
JOHN BUSUTTIL, European Union delegation, said that this year the international community had been setting down modalities to review how the outcomes of the World Summit on the Information Society+10 process had been implemented since 2005. The European Union supported the United Nations Commission on Science and Technology for Development’s overall coordination of the review and backed linking the outcomes of the Summit with the post-2015 development agenda. The Union supported a review process that ensured an appropriate balance of responsibilities between the United Nations agencies helping the World Summit’s action lines. Then the Assembly would hold a final Summit review meeting in early 2015 to endorse the recommendations agreed to during the agencies review processes, and those agreed by the Commission’s Working Group on Enhanced Cooperation.
The European Union reaffirmed its commitment to the multi-stakeholder model of Internet governance, ensuring accountability, transparency and independence for special interests and its support for the Internet Governance Forum. The Union believed the Forum had been a success in bringing together representatives from business, civil society, Governments, international organizations, parliamentarians, the technical community and academic experts. Those parties were able to exchange views and best practices on all issues relating to the Internet’s development, particularly its contribution to the global economy, freedom of expression and access to information. The Union believed the Forum had benefitted from the recommendations of the Commission’s Working Group on Improvements to the Internet Governance Forum and supported its renewal in 2015 for five more years, with no substantial changes.
APPOLINAIRE DINGHA (Congo), associating himself with the Group of 77 and the African Group, said the use of information and communications technology had grown exponentially in developing countries, including mobile phone use and broadband access. The impact on development showed the importance the sector should have in the post-2015 agenda. Substantial progress had been made in access, yet a tremendous digital divide remained, especially for least developed countries. Congo had made information and communications technology a priority in its development policies. He emphasized the promotion of the sector, although noted that foreign direct investment (FDI) was strongly needed to move those initiatives forward. Congo had implemented a cyberstrategy, including giving priority to the development of fibre-optic networks, both internationally and regionally. Five mobile phone companies were now operating in Congo, which created jobs and allowed for a more diversified economic base. There were other indicators that this sector was on the rise, however, the lack of access for the majority of people, excessive costs, limited national coverage and a lack of accessibility for the education and health systems remained severe constraints
GIORA BECHER ( Israel) said that in just 65 years, his country had transformed from a developing one into an economic powerhouse earning the nickname, “start-up nation”. Thousands of products, including instant messaging, virtual keyboards, and flash drives, were made in Israel. Its information and communications technology and telecommunication companies were world leaders in areas such as Internet security and telecommunication services. Liberal regulation supported an open and competitive Israeli telecom market, where consumers enjoyed cutting edge services at affordable costs. The World Summit on the Information Society +10 Review must serve as an opportunity to bridge the digital divide and harness digital data. Online data, he noted, could help significantly in keeping international development on track.
ABULKALAM ABDUL MOMEN( Bangladesh), associating himself with the Group of 77 and the Group of Least Developed Countries, said that technology was too expensive for poor countries to procure. He expressed concern that the Secretary-General’s report made no mention of the obstacles faced by least developed countries in the area of information and communications technology. In Bangladesh, where the majority of the working population was engaged in the agriculture sector, information and communications technology was being used to ensure an effective distribution system where farmers received market information on their cell phones at zero or negligible cost. That way, farmers could receive fair prices for their produce. People, even in the country’s remote villages, had access to digital services including birth registration, mobile-banking, life insurance, exam results, and remittance receipts at almost no cost.
VADIM PISAREVICH ( Belarus) said information and communications technology were some of the defining factors in global development and achieving the Millennium Development Goals, with one-third of the world’s citizens now having access to the Internet. Belarus had become a significant supplier of information and communications technology services at the regional level and was among the most active States on the sector’s technology index, ranked as the forty-first most digitally active country in the world. However, the international community had yet to ensure the openness of the global Internet society and the digital divide remained. It was crucial to actively protect children and youth from negative content on the Internet and combat cybercrime. Belarus called on the international financial institutions and the private sector to increase information and communications technology funding to least developed and middle income countries.
OLIVIA COOK( Chile), associating herself with the Group of 77 and China, said information and communications technology were a fundamental tool for advancing development and ensuring digital inclusion. Chile had worked to improve infrastructure and access through a digital agenda, but remained concerned about the expansion of broadband services, which had left some countries behind. Connectivity and the quality of access must be among the international community’s main concerns, particularly as the digital divide gained momentum. Chile was working to improve the ease and quality of access at the national level, while also remaining actively engaged in regional efforts.
ASHAWAMI KUMAR ( India), associating himself with the Group of 77 and China, said the growth of information and communications technology over the last decade had exceeded expectations. “Anyone could watch me making this statement live on his mobile device,” he said, adding that the fact that 6 billion people had access to mobile phones was “nothing short of revolutionary”. Unleashing and tapping the development potential of the Internet was a real opportunity. India had the most Internet users after the United States and China. The Internet had brought the Government closer to its people and had empowered them. The Internet had also reached rural areas through tele-education and telemedicine. The governance of cyberspace, based on the values of democracy, pluralism, inclusion, openness and transparency, should be similarly inclusive, democratic, participatory, multilateral and transparent in nature, he said, adding that operationalizing the Tunis mandate in that regard should not be viewed as an attempt by Governments to take over or regulate the Internet.
FELIPE GARCÍA LANDA( Mexico) said that the post-2015 development agenda must integrate technological development thus closing the gaps of Internet and telephony usage. Information and communications technology were essential tools for development of all countries. In the social spheres, the Internet delivered imperative programmes and services. In that regard, he reiterated his concern of the growing digital divide between developing and developed countries. Internet access was a fundamental right. It was recently added to the Mexican Constitution. Those legal changes were aimed at establishing a sound environment that would foster the telecom development in the areas of Government, economy, health, and education. The objective must be for all stakeholders to achieve a proper balance between Internet and the rights and privacy of citizens. Openness and policy coordination need not contradict one another, he said, stressing the need for security and to foster a free and open digital environment.
CHARLES MSOSA ( Malawi) said information and communications technology was one of the pillars of Malawi’s Economic Recovery Plan and its technology policy provided a framework for the development of technology to boost the country’s socio-economic growth. The 2011 Millennium Development Goals report showed that the population’s use of the Internet had increased from 0.07 per cent in 2005, to 17 per cent in 2011. Use of mobile and fixed telephone lines had jumped from 2.63 per cent to about 27 per cent during the same period, mostly because of greater mobile telephone usage. Working with development partners to increase its technology capabilities, the Government had set up 36 tele-centres in rural areas to give the public access to Internet, telephone, fax, printing, library and photocopying services for a very small fee. Malawi was working to develop its technology infrastructure and had implemented the Regional Communication Infrastructure Program. Its aim was to improve the quality, availability and affordability of broadband within Malawi. Another component of the project, providing Internet connections to public institutions, had been successful.
BAGUDU HIRSE (Nigeria), associating himself with the Group of 77 and the African Group, stated that information and communications technology held tremendous potential for poverty eradication and the socioeconomic advancement of developing countries. African countries continued to make progress in access to information and communications technology and their application as veritable tools for development. However, broadband deployment in Africa had not kept pace with other regions, resulting in a continuing gap in digital and broadband access between developing and developed countries. Unless concerted efforts were directed toward redressing that divide, many Africans could miss economic opportunities that depended on high-quality communications. Greater emphasis should be placed on reducing the cost of technologies and capacity building for greater use and application, as well as an upgrade of the quality and quantity of telecommunications infrastructure.
PORNSITH PIBULNAKARINTR (Thailand) said his country shared the Secretary-General’s view that despite progress on investment in broadband capacity and access to Internet usage, a new digital divide and gaps in infrastructure in many regions remained. Information and communications technology must have a prominent role in the future development agenda and in sustainable development. Situated in a disaster-prone area, Thailand attached great importance to disaster risk management and had expanded the use of information and communications technology networks for disaster monitoring and warning, as well as post-disaster management. It had also used the technology to increase access to education for students in remote areas. The Government was committed to using information and communications technology to increase accessibility, to promote gender equality and to empower all citizens, including those most vulnerable.
JASSIM ABDULRAHAM AL-THANI ( Qatar), associating himself with the Group of 77 and China, noted that most countries which still did not have access to broadband Internet were also the least developed. The global economic crisis further halted their growth, he said, emphasizing the need to boost the role of information and communications technology in development. In the same vein, all Governments must play a role in managing the Internet in order to ensure stability and security. The anniversary of the World Summit in Information Systems must serve an as opportunity to review lessons learnt. Emphasizing that technology supported sustainable growth and was also a viable source of employment, he stressed the need for developing countries to focus on capacity-building. Shared but differentiated responsibility was imperative in that sense, he added.
NOSISI POTELWA (South Africa), associating herself with the Group of 77 and the African Group, said many issues in the area of Internet governance had not yet been adequately addressed. The Internet was increasingly dominated and controlled by powerful vested interests and as it grew in importance in our daily lives, the majority of the world’s populations were dominated by those groups. It was important to protect the Internet from domination by any particular national or private interest groups. Africa had a young population and a high level of Internet growth; therefore, it was important for the development of the continent that the Internet remained open and accessible. South Africa was concerned that major corporations could try and usurp the cultural heritage of the peoples of developing countries by bidding for the ownership of domain names on the Internet. It was important to develop a structure that ensured inclusiveness, accountability and transparency for the development of public policy relating to the Internet. South Africa said there was a need for a new or existing United Nations agency to develop international Internet public policy and have oversight over critical Internet resources and infrastructure.
GUILHERME DE AGUIAR PATRIOTA (Brazil), associating himself with the Group of 77 and China, said that more democratic decision-making processes must be adopted at the international level in order to build an “open, diverse, and reliable information society”. The United Nations was the most adequate forum for that task. Brazil welcomed the inputs from the working group on “enhanced cooperation” in the United Nations Commission on Science and Technology for Development. Further, recent revelations about a global network of electronic surveillance had shown serious violations of human rights and civil liberties in the name of the fight against terrorism. That was “not only immoral, it was illegal”. The United Nations must play a leading role to prevent the cyberspace from being used in a way that undermined international cooperation. The international community needed to sidestep the “false dilemma” between free speech and privacy on one hand and security in cyberspace on the other. Speech could not be deemed free, he concluded, without the guarantee that information flows remained private.
ANTON Y. MOROZOV ( Russian Federation) said that efforts needed to be focussed on overcoming the digital divide, and States needed to play a key role in Internet governance. Information and communications technology was among the major areas of development in Russia, having shown stable and progressive growth. Implementing high-tech solutions was among the key elements of development and was of highest priority for the Russian Government. Improvements in national infrastructure, the promotion of scientific innovation and advancements in accessibility were just some of the focus areas. The Information and Communications Technology Development Index showed that in 2012, Russia rose by 32 places to twenty-seventh worldwide, with the most significant progress in the area of government services. Intensive development would allow people’s lives to be improved, their communication abilities advanced and knowledge to be shared.
LIDIJA BUBANJA (Serbia), associating herself with the European Union, said her country actively supported women’s empowerment through the use of information communications technology and had marked the year as the third year of International Girls in Information and Communications Technology Day. In cooperation with the International Telecommunication Union, Serbia in November would host the Regional Preparatory Meeting for Europe for the World Telecommunication Development Conference. Within Europe, her country expected that the Economic Commission for Europe would provide adequate support to each m ember State, especially those with less developed institutional capacities. That would help with the implementation phase of the new strategy package, the road map and the global goals for intelligent transport systems that used information communications technology to improve the efficiency of transport and freight networks. Serbia noted the need for the international community to work together to cope with increasing privacy and security concerns. Her country would continue to promote and enhance cooperation with other Member States to improve the development of communications for everyone.
XIE XIAOWU ( China) said that information and communications technology was a fundamental strategic pillar industry of his country. As Member States were formulating the post-2015 development agenda, the United Nations was called upon to effectively play its role in addressing the issue that a certain country was abusing its technological advantages to spy on other countries, steal information from organizations or individuals of other countries and violate people’s privacy. He suggested that development goals should be formulated in a scientific manner in order to establish practical and feasible goals that would bring into full play the leading and buttressing roles of the information and communications technology sector. Hegemony in that sector must be rejected. It was imperative to establish fair, equitable and efficient international norms that would respect the information sovereignty of all States and protect the fundamental rights of all citizens. The international community should further enhance information inter-connectivity. With its accumulated experience, China was ready to make its due contribution in the information and communications technology field of development.
TERRI ROBL( United States) said that while Government had an important role to play in promoting information and communications technology, involvement of civil society and digital companies was imperative. She supported an international governance model that was multi-stakeholder and democratic. It was important to continue to measure progress of World Summit goals. Its progress could greatly contribute to forging the post-2015 development agenda. The United States supported the role of the United Nations and its agencies in facilitating the implementation and follow-up of the Summit. Collaborative efforts were vital in implementing its outcome. In light of recent reports of interference, the United States was reviewing its practices. In the same vein, its longstanding policies on privacy and human rights had not changed. She reiterated her commitment to an open and interoperable cybersecurity atmosphere. Her country remained committed to closing the digital divide and helping all reap the benefits of information and communications technology.
FEH MOUSSA GONE(C ôte d’Ivoire), associating himself with the Group of 77 and the Africa Group, said his country was no exception to trends in computerization. The information and communications technology sectors remained the most active in his country’s economy leading to the creation of more than 6,000 direct jobs and 100,000 indirect jobs. The sector continued to be an indiscernible tool. For the Government it must be used to provide populations with accessible services in areas of education, health care and human resources. His Government’s ultimate goal was to build a foundation upon which the country could build an economy that could reap the benefits of the sector. To that end, a new law had been enacted to increase protection of consumer rights and e-trade in order to protect personal data. The construction of broadband infrastructure was also an important advance. E-governance was equally on the way. Policy undertaken had led to significant progress. In the same vein, the digital divide remained and must be incorporated into the 2015-agenda development.
GARY FOWLIE, of the International Telecommunications Union, said the World Summit on the Information Society review would be designed as an open forum, with organizers receiving recommendations for agenda items, including how to create synergy between the event and the post-2015 sustainable development agenda. The role of information and communications technology in all three pillars for sustainable development was widely recognized and the outcome of the event should lead to direct inputs for the post-2015 agenda. The Telecommunications Union recognized that the need for broadband rollout was essential for development and linked to increases in GDP. There was also a call for discussions on gender equality in access to broadband due to the digital access gender gap. Youth were also identified as being key to the advancement of information and communications technology. In that regard, the Telecommunications Union partnered with Chile to host a forum targeting young people to gain a better understanding of their needs.
MILORAD ŠĆEPANOVIĆ ( Montenegro), associating himself with the European Union delegation, said that the strongest pillar of its information and communications technology development was the competence of individuals. Advancements in the health care sector, electronic communication, postal services, telecommunication and mobile communication created a strong platform that would enable growth and expansion. The Government had adopted a national strategy to develop its information sector and make the country a digital society. By 2016, it should have 200 Government Internet services available to its citizens and all schools and universities were expected to be equipped with computers and Internet. In that regard, he emphasized the potential in utilizing the country’s young population.
MONA ABDULLA MOHAMMED ( Bahrain), associating herself with the Group of 77 and China, said the world had witnessed considerable progress in innovation in the information and communications technology sector, although the digital divide between the developing and developed countries was of great concern. Many developing countries tried to keep abreast of technological advancements and made significant progress in that field, including in the Arab region where there was an increased use of mobile phones and other media. Information and communications technology played a vital role in development and cooperation with the private sector was key. Her country’s national strategy emphasized the use of information and communications technology to promote development, with its electronic services market completely liberated in 2005 and 80 companies that now provided major and subsidiary electronic services.
MAYNA TEO (Singapore) said that her country’s own experience demonstrated the importance of the information and communications technology sector in development and supported a review by the General Assembly of the outcomes of the World Summit on the Information Society. In addition to underscoring the important role the sector in a highly connected world, the Summit would strengthen the capacities of all countries to have access to modern infrastructure. On its own initiative, Singapore launched the eGov2015 Master Plan two years ago to increase citizens’ participation in Government and narrow its digital divide. Singapore also introduced national programmes to provide senior citizens with free access to information technology training and computer resources. Furthermore, the country set up a computer training centre for persons with disabilities and an assistance programme to help those most vulnerable in being able to purchase a computer and subscribe to Internet access at an affordable price. Singapore was aware of the important leverage the sector offered and stressed that to strengthen productive capabilities, everyone should have access to modern infrastructure, such as information communications technology.
FAKHRI ALIYEV ( Azerbaijan) said that his country continued to improve regional connectivity solutions namely with the Trans-Eurasian Information Super Highway project. The Eurasia Connectivity Alliance aimed at highlighting synergies among Governments, the private sector, civil society, academia and international development institutions towards improving the development of regional telecommunication transit routes. Azerbaijan, in line with implementing the World Summit on the Information Society agenda, had launched State programmes in building the broadband infrastructure on the basis of “Fibre-to-Home”, e-Government with cybersecurity, digital radio and TV broadcasting and space technology development. The first telecommunication satellite was launched into orbit last February, aiming to provide high quality broadcasting services for Government and corporate clients in the region and beyond.
The Second Committee held a joint meeting in the afternoon with the Economic and Social Council on “Inequality, Growth and the Global Economic Outlook”.
Co-chaired by Ferit Hoxha (Albania), Vice-President of the Economic and Social Council, and Oana Rebedea (Romania), Vice-Chair of the Second Committee, it also featured the following panellists: Shamshad Akhtar, Assistant Secretary-General for Economic Development in the Department of Economic and Social Affairs; Peter Pauly, Professor and Interim Dean, Rotman School of Management, University of Toronto, Canada; Pingfan Hong, Acting Director, Development Policy Analysis Division, Department of Economic and Social Affairs; Moazam Mahmood, Director, Economic and Labour Market Analysis Department, International Labour Organization (ILO); and Dave Turner, Head, Macroeconomic Analysis Division, Economics Department, Organisation for Economic Cooperation and Development (OECD).
Mr. HOXHA said that this week five years ago the economic crisis spread rapidly around the globe. Its impact resulted in serious setbacks in the achievement of the Millennium Development Goals. Since then, recovery had been fragile while growth remained sluggish. In addition, unemployment remained high with the decline of official development assistance contributing to the problems. The task now was to strengthen short-term growth. That required bold economic action at the regional levels to address the increasing gaps between the rich and poor. He hoped today’s meeting would contribute to better understanding short and medium length challenges and what needed to be done to achieve robust and equitable growth.
Ms. AKHTAR said that while advanced economies recovered, there had been a slowdown in emerging market economies and some developing countries. That was particularly concerning because they were the locomotive of global growth. Emphasis had turned to ensuring that policies did not derail the fragile recovery, and instead stimulated more robust, inclusive and sustainable economic growth. The sustainability of growth would depend on how inequalities were addressed, particularly since global inequality and inequality within countries rose during the last two decades. Growing levels of inequality, not just in income, but in access to inadequate education, health care and social protection could create volatility, trigger crises and diminish productivity.
A broad approach to poverty reduction and addressing inequality would require incorporating social, economic and political dimensions, integrating improvements in health, education, economic development and governance structures. Education at all levels, from preschool to tertiary education and job training and retraining, along with effective health care would be crucial to increasing the quality of opportunities in developed and developing countries. Financial sector policies, including financial inclusion had also been shown to provide positive effects on poverty eradication.
Mr. PAULY said the dramatic increase in income and wealth inequality in a large number of countries was noteworthy. The question was whether a certain amount of inequality was the bi-product of economic progress or whether some countries had crossed a threshold that could have long-term negative implications. Income distribution in developed countries varied dramatically and there was a host of evidence that the gap was widening across multiple income classes, and not just as a result of wealth increases for the top income bracket.
Responses to income inequality varied across countries, he said. While in some countries the gaps continued to grow, others were able to institute policies to moderate inequality. Economic decisions had become more politicized and were becoming more influenced by pressure groups that had grown in strength as a result of shifts in income distribution. Inequalities were insidious in that they had a significant impact on inter-generational mobility. It became harder for subsequent generations to move up the economic ladder, resulting in persistent inequality carried forward from generation to generation. Unequal access to economic returns meant limited access to education and job training programmes, which meant human capital was not built up, resulting in a failure to increase labour quality and lower growth rates.
Mr. HONG said that in 2013, the world economy had once again disappointed, noting that the world gross domestic product grew at a lower pace than predicated. The baseline forecast for the next two years, 2014 and 2015, was 2.9 per cent and 3.5 per cent growth of GDP, respectively. Among developed countries, the United States was likely to grow much less due to fiscal tightening and several political gridlocks. On the positive side, the United States private sector was expected to pick up. Growth remained weak in Europe where demand remained exceptionally low. Economic growth in Japan had been boosted but remained uncertain. Among developing countries, growth prospects for Africa remained robust, with GDP expected to accelerate by 4.9 per cent. That mostly depended on a sustained increase in domestic demand. In East Asia, economic growth had stabilized and a moderate pick-up was expected.
In the same vein, high unemployment rates remained elevated, he said. World trade was growing at a sluggish pace due to a weak demand in developed countries. Commodity prices were on the downturn, but volatility could be expected to continue. While there had been a reversal in capital inflows to emerging economies, their external financing costs had increased. A number of emerging economies were facing risks ranging from “hard landing”, unpredictable United States fiscal policy, geopolitical risks and environmental disasters. As a group, emerging economies were stronger to deal with external shocks than they had been in the 1990s during the South Asian crisis. Still, challenges remained in reducing vulnerability, meeting unique domestic needs, and reforming structural impediments.
Mr. MAHMOOD said that while there may be some periods of optimism wrapped in intervals of confidence, all recovery thus far had been in “weak growth” and very little in terms of employment. That was putting a very heavy burden on labour markets. Recent global growth had been widely documented, although it was important to note that growth prospects had been downgraded in many cases and there was a huge hangover in global unemployment. There were 32.2 million jobs lost as a result of the global crisis, nearly half of those in developed economies. Currently, employment growth was flat-lining and ILO believed unemployment would remain a huge issue, despite the handful of growth indicators.
ILO remained concerned that households were still not spending, firms were not making further investments despite low interest rates and banks were not able to lend sufficiently, amongst others indicators that growth was not progressing. The nature of the growth that had been seen thus far was through macro-rebalancing, largely on the back of the labour market. The international community needed more balanced drivers of growth recovery, otherwise there would continue to be weak growth and increases in the jobs gap.
Mr. TURNER said there was overwhelming relief that the United States had not hit a debt-ceiling but at the same time disappointment that they had not resolved the issue permanently. If that problem were to come back in 2014, there would be major repercussions for the world economy. Fiscal policy must be used to bring Government debt down. Structural reform was needed in core countries, particularly those running surpluses. For Brazil, the Russian Federation, India, China and South Africa (BRICS) there was huge scope for structural policy which would promote trend growth. The report by the OECD emphasized the huge opportunities for reform in efficiency.
In an ensuing discussion, the representative of Venezuela said that social contracts between classes had ended and societies had moved toward a neo-liberal state in which the linkages between investment and employment were broken. As a result, there was a growth in inequality and a break between wealth and employment. Investment in money markets increased, but people did not benefit, since Wall Street had very limited linkage with the real economy.
Mr. PAULY, agreeing with the representative from Venezuela, said that over the last 30 years it was clear there had been a deviation from the social compact that had governed economic interactions, partly due to deregulation. The phenomenon was largely limited to the Anglo-Saxon world, he said, highlighting why the issue of inter-generational mobility was so important. Parallel to the breakdown of the societal compact there were a fair number of regulatory policies that emerged which resulted in economic activity shifting and revolving around the redistribution of wealth, as opposed to real production. Over time, such trends resulted in a misallocation of resources which did great damage to countries’ long term growth prospects.
When the floor was opened for questions and comments a second time, Venezuela’s delegate said that banks had traditionally been intermediaries but now they could accumulate wealth with which they could speculate. The bank’s role broke the linkage between investment and growth. Credit monopoly also remained a problem, he said, emphasizing that to attain credit developing countries must adhere with conditionality. Moreover, production was driven by the desires of the rich, rather than the needs of the poor.
Addressing Germany’s delegate request about data on developing countries, Mr. HONG said that data for many developing countries could be accessed and was available in the report on a country basis. Agreeing with Venezuela, he said indeed, in the old days, commercial banks were intermediaries but in recent years, they were not happy with the fixed income. They became greedy, which was exactly the cause of the subprime loans.
Mr. MAHMOOD underlined the deficiency in aggregate demand through the loss of employment and the loss of income. There must be a balanced growth path based on consumption, as well as domestic and external demand.
Mr. PAULY said that policy decisions that were meant to free-up economic activity had generated the misallocation of resources. It was important to put in place again a regulatory environment that favoured real wealth over financial wealth.
In closing remarks, Ms. REBEDEA said that despite the economic upturn for several developing countries, inequality would remain a pressing issue. The United Nations must address inequality as it crafted the development agenda beyond 2015. Opportunities for productive employment must be expanded, particularly for women and young people. Developed countries must take into account that their policy affected other countries. Policy coordination in those instances could have mutually beneficial effects. It could create more favourable economic conditions in both developed and developing countries through positive spillover effects in areas such as trade and financial flows. It was necessary to ensure that the World Trade Organization’s Doha Round of negotiations was concluded successfully.
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