|Department of Public Information • News and Media Division • New York|
Economic and Social Council
Special High-level Meeting
6th & 7th Meetings (AM & PM)
Economic and Social Council Has Crucial Role in Promoting Dynamic Development Agenda
to Foster ‘Transformative Change’ Beyond 2015, Says Deputy Secretary-General
Council Holds Annual Meeting with International Financial, Trade Bodies;
Coherence in Financing Sustainable Development, Post-2015 Development Agenda Focus
Amid sluggish global growth and declining aid flows, financing sustainable development would require significant funding from various sources, and the Economic and Social Council could play a crucial role in promoting a “forward-looking” development agenda to foster transformative change beyond 2015, Deputy Secretary-General Jan Eliasson said today, as the 54-member body convened its annual high-level meeting with international finance and trade institutions.
“This is a daunting, and at the same time, inspiring challenge for all of us,” he said in opening remarks, urging the Council to renew its commitment to the 2003 Monterrey Consensus and the 2008 Doha Declaration on financing for development. To be sure, efforts to end poverty over the last two years had been impacted by a significant decline in official development assistance, and a protracted economic slowdown that had narrowed the space for investments in education, health and sanitation.
For its part, the Council had long taken a holistic and integrated approach to development, he said, by offering a venue for civil society and the private sector to participate in the debate about post-2015 priorities — a widening dialogue that he wholeheartedly supported. Partnerships would be crucial in the period ahead. Work to achieve the Millennium Development Goals must place people first, which was why the United Nations was framing the post-2015 agenda through a broad and consultative process. In such work, the Council could help set a “bold, yet practical” course for truly equitable and sustainable development.
Following those remarks, Council President Néstor Osorio ( Colombia) said weaknesses in developed countries were at the root of slow global growth, with sovereign debt problems, banking fragility and fiscal pressures impeding recovery. Given concerns over unemployment and geopolitical tensions, “more forceful and concerted policy actions” — at both national and international levels — were needed to mitigate major risks and ensure a sustained economic recovery.
In that context, he highlighted the need for an effective strategy of financing for sustainable development in the follow-up to the United Nations Conference on Sustainable Development — or Rio+20 — which would require domestic resource mobilization, fulfilment of official development assistance pledges and the use of innovative funding mechanisms. A “renewed global partnership” beyond 2015 must be forged, as the development agenda had to be “more structural, inclusive and systemic”. He also called for a more participatory system of global economic governance.
The day-long meeting started with a special ceremony to inaugurate the newly renovated Economic and Social Council Chamber. Kicking off the event, Secretary-General Ban Ki-moon said he was encouraged that the first meeting in the new Chamber was with the United Nations Conference on Trade and Development, the World Trade Organization and the Bretton Woods institutions — a partnership that could make progress on problems on the Council’s agenda. “Together, we can make our world more just and equitable — and that will make it more peaceful,” he said. He was joined at the ceremony by President Osorio and Gunilla Carlsson, Sweden’s Minister for Development Cooperation.
Today’s high-level meeting — convened under the theme of “Coherence, coordination and cooperation in the context of financing for sustainable development and the post-2015 development agenda” — also featured a ministerial panel discussion on the “World economic situation and prospects in the wake of the world financial and economic crisis”. In the afternoon, two thematic debates were held. The first focused on “Financing for sustainable development, including leveraging of private capital, in the context of the follow-up to the outcome of the Rio+20 Conference”. The second examined the “Global partnership for development in the context of the post-2015 development agenda”.
In a keynote address, Mahmoud Mohieldin, Special Envoy and Representative on the Millennium Development Goals and Financial Development at the World Bank Group, announced a “new phase of collaboration” among the United Nations, World Bank, regional development banks and others to enhance statistical capacity-building and the availability of all development data. The Group’s “practical” approach to finance took into account five financing sources, and then matched those sources with development priorities to ensure their best use.
Also stressing the need for collective action, Patricia Alonso-Gamo, Deputy Secretary of the International Monetary Fund and Acting Secretary of the International Monetary and Financial Committee, urged countries to complete financial sector reforms, create jobs and attack the risk for global spillover. The Fund would help identify the risks to fiscal sustainability and manage debt portfolios by working to strengthen national institutions. In addition, it would advise on tax and spending policies to encourage labour force participation.
Offering a trade perspective, Shishir Priyardarshi, Director of the Development Division at the World Trade Organization, said world trade was forecast to grow by 3 per cent in 2013, versus an average annual 5 per cent over the last two decades. Against that backdrop, he emphasized the importance of trade-led economic growth for increasing domestic revenue generation. It was essential that the post-2015 agenda include economic growth as a central pillar of its strategy.
Also speaking on the high-level panel today were the Prime Minister of Fiji (on behalf of the “Group of 77” Developing Countries and China); First Vice-Prime Minister of Kyrgyzstan; Minister for Finance and Public Credit of Colombia;State Minister, Ministry of Finance and National Economy of Sudan; Minister for Finance of Finland; President of the Central Bank of Austria; Governor of the State Bank of Pakistan; Minister for Development Cooperation of Sweden; Minister for Economic Affairs and Finance of Iran; Minister for Economy and Public Finance of Bolivia; and the Special Envoy of the Prime Minister of Belize.
The Vice-President of the European Commission and Commissioner for Economic and Monetary Affairs and the Euro of the European Union also spoke.
Mukhtar Tileuberdi (Kazakstan), President of the Trade and Development Board, United Nations Conference on Trade and Development, and Jorge Familiar Calderón, Vice-President and Corporate Secretary, World Bank Group, also spoke following the morning panel and keynote address.
During the thematic debate on financing for sustainable development, presentations were made by Shamshad Akhtar, Assistant Secretary-General for Economic Development, Department of Economic and Social Affairs; James Zhan, Director, Division on Investment and Enterprise of United Nations Conference on Trade and Development; and Chris Lane, Division Chief for Low Income Countries, Strategy, Policy and Review Department, International Monetary Fund.
During the thematic debate on global partnership for development, presentations were made by Jos Verbeek, Lead Economist, World Bank Group; Richard Kozul-Wright, Officer-in-Charge, Division on Globalization and Development Strategies, United Nations Conference on Trade and Development; and Shishir Priyardarshi, Director, Development Division, World Trade Organization.
The Economic and Social Council will reconvene at 10 a.m. on Tuesday, 23 April, for a special meeting on external debt sustainability and development.
The Economic and Social Council met this morning for a special high-level meeting with the Bretton Woods institutions, the World Trade Organization (WTO) and the United Nations Conference on Trade and Development (UNCTAD) with the theme “Coherence, coordination and cooperation in the context of financing for sustainable development and the post-2015 development agenda”. The Council had before it a note by the Secretary-General (document E/2013/52) providing background information and suggested points for reflection to inform discussion on the world economic situation and prospects, financing for sustainable development and global partnership for development in the context of the post-2015 development agenda.
United Nations Deputy Secretary-General JAN ELIASSON said the Council’s deliberations today would reverberate beyond the new chamber by aiming to secure better conditions for the world’s poor. By closing the gaps in wealth, education and gender equality, the Council “righted wrongs”. By allowing people to flourish, it worked to take away the incentives that could undermine peace. “This will not be easy to achieve in a world struggling to recover from the global financial crisis,” he said, stressing that developed countries still suffered from banking and other problems that impeded world recovery.
The jobs crisis, in particular, continued unabated, he said. That would have a serious impact on younger generations for years to come, which only worsened inequality worldwide. At last year’s United Nations Conference on Sustainable Development in Rio, world leaders had agreed that poverty eradication was the greatest social challenge facing the world today. They had committed to free the world from poverty, but the economic slowdown had narrowed the base for the drivers of development. Efforts to reduce inequalities had been impacted by the decline of official development assistance (ODA) over the last two years.
“In times of crisis, we need more than ever to protect and support the most vulnerable,” he stressed, pointed out that while Governments bore the primary responsibility for devising sound public policies, developing countries required a favourable international environment and additional resources. Financing sustainable development required sustainable resources and their effective use, he said, pressing States to fulfil their commitment to allocate 0.7 per cent of their gross national income to ODA, which was crucial for reaching the Millennium Development Goals. Progress during the “1,000 Days of Action” would generate greater momentum for the post-2015 period. The challenge was to arrive at a coherent framework of priority areas and to understand the mutually reinforcing links among them. “This is important for the transformative change, which is so strongly needed,” he said.
For its part, the Council had long taken an integrated approach to development, he said, and it could play a crucial role in promoting dialogue about a dynamic and forward-looking post-2015 agenda. “This is a daunting, and at the same time, inspiring challenge for all of us,” he said. Whatever agenda was agreed, it must be backed by a sound framework for action. A post-2015 agenda that lacked means of implementation would be hollow. That was why the Council must address the question of financing for sustainable development and renew its commitment to the “Monterrey Consensus” and Doha Declaration. The intergovernmental committee of experts had a paramount responsibility to propose options for an effective financing strategy.
Partnerships would also be crucial, he said, welcoming the Bretton Woods institutions, UNCTAD and the WTO to today’s meeting. The Council also provided a venue for civil society and the private sector to debate, and he supported that widening dialogue. He had just returned from the spring meeting at the World Bank, where critical development issues were covered, including gender equality, overcoming poverty and achieving the Millennium Goals. He had discussed with Ministers for Finance the importance of investing in sanitation, the Millennium Goal most lagging, as well as how to further integrate the rule of law into development strategies. A major reference point in that regard had been provided by the General Assembly’s 2010 resolution on “The Sanitation Drive to 2015” and the Declaration adopted at the high-level meeting on the rule of law adopted last year.
Also, the Secretary-General had held his first-ever meeting with the presidents of multilateral development banks, with a view to enhancing cooperation. As the focus must always be on “grass-roots realities”, the Secretary-General also had taken part in the “Global Voices on Poverty” event.
Work to achieve the Millennium Goals must place people and realities on the ground at its centre. That was why the post-2015 agenda would be framed in a broad consultative process. If the power of partnership was harnessed, progress would be made across the development agenda, and he highlighted the Council’s role in promoting South-South cooperation in that regard. The coming year was very important for strengthening the intergovernmental arrangements for sustainable development. Attention also should be given to the high-level political forum, launched last year in Rio. “I count on all of you to push for progress towards 2015,” he said, stressing that the Council could contribute to a future direction — “bold, yet practical” — for truly equitable and sustainable global development.
President of the Economic and Social Council, NESTOR OSORIO ( Colombia), opened the special high-level meeting by highlighting some substantive points that fell under the meeting’s themes, noting first that the world economic situation and prospects remained rather grim. Weaknesses in developed countries were at the root of slow global growth, with sovereign debt problems, banking fragility and fiscal pressures impeding recovery, while developing countries also suffered from spillovers. Given concerns over unemployment, geopolitical tensions and the possibility of a climate shock, there was a need for “more forceful and concerted policy actions at both national and international levels to mitigate major risks and ensure a stronger and sustained economic recovery”.
He pointed out the need for an effective strategy of financing for sustainable development in the follow-up to the outcome of the Rio+20 Conference, stating that that would require domestic resource mobilization, fulfilment of ODA, and the use of innovative mechanisms for financing. The need for significant mobilization of resources had been recognized at Rio with an agreement reached to establish an intergovernmental committee of experts to propose options for an effective sustainable development strategy. He noted the creation of a dedicated working group on the subject.
The Millennium Development Goals needed building on, with a “renewed global partnership” beyond 2015, he said. The new development agenda needed to be “more structural, inclusive and systemic” in its approach in order to deliver transformations and to address current and emerging challenges in global development. He emphasized the importance of “greater accountability, cooperation and coherent policymaking among Member States with regard to the framing, monitoring and implementation of the renewed global partnership for development”. Specifically, the Annual Ministerial Review and biennial Development Cooperation Forum offered opportunities for enhanced monitoring and mutual accountability in the post-2015 development agenda. He also called for a strengthened United Nations role along with a more participatory system of global economic governance in international economic decision-making and norm setting, as well as the active participation of civil society and the private sector in dialogue.
High-level Panel of Ministers
The Council then launched a high-level panel on the theme: “World economic situation and prospects in the wake of the world financial and economic crisis”.
JOSAIA VOREQE BAINIMARAMA, Prime Minister of Fiji, speaking on behalf of the “Group of 77” Developing Countries and China, said that while it was important to involve multiple stakeholders, it remained crucial for national Governments to play a central role in framing the post-2015 development agenda. He pointed to continued difficulties with the global economic recovery, which included inequality that remained both across and within countries. The international financial and monetary systems needed urgent reform to improve their transparency and legitimacy and to reflect better the economic realities of the twenty-first century through giving more say to developing countries. Financial markets needed to play a positive role in development and, in order to do so, they required better regulation. He was pleased to see reform of the IMF’s voting rights, but other efforts were needed to ensure sustainable future development and growth, including work on special drawing rights, a framework for debt distress resolution and better efforts to achieve technology transfer.
A renewed and strengthened global partnership was needed to achieve future sustainable development, he said, stressing the need to “move beyond the present framework”. He said the Monterrey framework needed to be the basis for development beyond 2015 and, in that context, he said the Group of 77 believed that ODA remained an “essential catalyst” to sustainable development. Implementation was vital to the post-2015 development agenda and that meant financing. Trade was also essential to sustainable growth and a rules-based, open and non-discriminatory trading system was needed, and that system needed to benefit all, especially developing countries. The Doha Round needed resolution and needed to take into account the needs of developing countries. Developed countries should provide technological and capacity-building assistance and the international financial and trading systems should facilitate foreign direct investment, including investment guarantee schemes.
DJOOMART OTORBAEV, First Vice-Prime Minister of Kyrgyzstan, said the world economy was still struggling to recover from the financial crisis. He had just attended the spring meetings of the World Bank and International Monetary Fund (IMF). Did he have a sense of optimism? “No, I don’t,” he said, citing “unconventional” monetary policies taken by the United States, Japan and others. Ultimately, the world would be more stable when the strongest economies competed and weakened their currencies. But instead, the world was moving towards a riskier trajectory for development. He recalled that the goal of the 2005 Paris and Rome Declarations on aid effectiveness had not been implemented, noting that only one of 13 targets had been met. While recipients had complied with the framework, donors had not. Thought should be given to launching another high-level forum on aid harmonization and effectiveness, and he urged the Council to pay attention to that issue.
As for development aid policies, he had three words for their effectiveness: “governance, governance, governance”. Only in institutions with transparent governance could such aid be effective. For policy measures to be effective in limiting the negative spillover from weakening economies, he supported the role of Brazil, Russia, India and China and other emerging economies. As Kyrgyzstan was located in between three of the so-called “BRICs”, his Government supported a larger role for those economies in multilateral institutions. Further, development banks should give them more voting power. Doing so would move the world in better direction
He said integration, open borders and competition in Kyrgyzstan’s economics and policies would drive his country forward. His country also had to address slowness and inefficiency. In that regard, he urged paying special attention to improving governance in multilateral development banks. Kyrgyzstan wanted to compete in all areas, which was why it had agreed with statements made at the Rio+20 high-level summit. It had adopted a sustainable development programme, which had already borne fruit, as seen in the fact its economy had grown at a 7.6 per cent rate, with 2 per cent inflation, during the first quarter. In sum, he urged that more debates be held and difficult questions posed to make the world a fairer place.
MAURICIO CARDENAS SANTAMARIA, Minister for Finance and Public Credit of Colombia, said his country had participated in discussions on the post-2015 development goals with “conviction and commitment” because of the successes of the Millennium Development Goals as a “genuine navigation map” for economic and social policies. The new commitment by the United Nations and its Member States would provide further, affirmative guidance to development policies. Colombia had met almost all the Millennium Development Goals, with extreme poverty already reduced by almost half from a rate of 20.4 per cent in 2000. It was expected to hit 8.8 per cent by 2015. Similar improvements had taken place in health and education, as well as employment and gender balance. Teen pregnancies remained high, he acknowledged, expressing a wish for more rapid progress. Colombia’s successes, he said, were due to good economic growth, which had enabled the country to increase its fiscal income and thereby to address social problems, particularly in the most vulnerable sectors.
The new development agenda and goals needed to reflect current realities in emerging economies and middle-income countries, he said. Moving forward, goals should aim to improve the lot of the middle class, having reduced poverty in line with the Millennium Development Goals. The middle class should achieve income comparable to that enjoyed by the middle class in developed countries. In defining the new goals, measurable indicators were needed, he said, adding that they needed to be sustainable and easy to understand. He was committed to reducing the effects of greenhouse gasses and to reducing the impact of climate change. One way in which he was pursuing that was through the elimination of subsidies for fossil fuels. Although Colombia was one of the 20 largest exporters of oil, they taxed fossil fuels at above 20 per cent, reflecting a commitment to the environment. He called subsidies “regressive”, saying they led to congestion and had a negative impact on the environment.
In the coordination of international economic policy, he said it was vital to enhance the representation of middle-income countries in institutions like the IMF, and he called for a more proportional representation that was based on the size of economies, as measured by gross domestic product (GDP). The post-2015 development agenda needed to focus not just on poverty reduction, but also on sustainability and the enlargement of the global middle class. It should also have a focus on productivity because competitiveness was the major difference between developing and developed countries and was essential to promoting convergence.
OLLI REHN, Vice-President of the European Commission and Commissioner for Economic and Monetary Affairs and the Euro, European Union, said recent discussions of the meetings of the Group of 20 and the IMF showed there was a broad convergence of views on the policy agenda for sustainable growth, which must be put in place in order to face common challenges. Despite some gains, global recovery remained uneven and progress was being made at different speeds. Unfortunately, history had shown that recovery after financial crises tended to be slow and sluggish, which appeared to be true this time around. In Europe, the goal was to create the conditions for sustainable growth, in part by allocating funds to boost competitiveness and job creation, spurring trade flow, and consolidating public finances.
He pointed out that, thanks to Europe’s fiscal consolidation efforts, fiscal deficits had halved since 2011. In fact, Europe had a slower pace of such consolidation this year: three quarters of a percentage point of GDP versus 1.5 per cent last year. That was due, in part, to the stabilization effect of measures taken by the European Central Bank and reinforced economic governance. Such efforts had increased credibility and reinforced the economic governance that had facilitated the European Union’s medium-term approach to consolidation. All in all, Europe was still experiencing an economic rebalancing, he said, as seen it its structural reforms and reinforcement of the architecture for economic and monetary union. Among the challenges, he said that fiscal sustainability, like sustainable growth, was a responsibility shared among global partners, which was why more coordination of policies was essential. That required a forum with decision-making capacities. The European Union would work to move the “G-20” agenda forward with the “G-193” and stronger interaction with the United Nations.
As the world’s largest donor of development assistance, Europe, together with other States, must prepare a post-2015 framework that linked poverty eradication with sustainable development, he said. Supporting the fundamental role of the United Nations in global governance, he highlighted the need for multilateral institutions to cooperate. He appreciated efforts by the Bretton Woods institutions to adapt to new realities in economic governance, encouraging the IMF and the World Bank to enhance their collaboration with the United Nations. Europe was committed to the WTO and Doha Development Agenda, recognizing that free trade was essential for global recovery. Correcting past problems and setting the world economy on the path of sustainable growth was a shared responsibility that included international organizations.
ABDUL-RAHMAN DIRAR, State Minister, Ministry of Finance and National Economy of Sudan, stressed the importance of learning lessons from the economic crisis. The crisis had highlighted the importance of development, with aid, as well as integrated policies, essential to sustainable development. He reaffirmed his readiness to work with every Member of the United Nations to help to achieve that and urged delegates to keep in mind the Secretary-General’s fast-track approach to achieving the Millennium Development Goals. The economic crisis had exposed the shortcomings in existing economic structures and cooperation was necessary to bring the vital reforms to existing international structures and to build a new economic system that built on ideas expressed at Rio+20 and the Monterrey Conference on Financing for Development. He urged States to focus on the needs of the least developed countries, saying the global economic crisis had affected them disproportionately. Part of the needed reform was the Bretton Woods institutions and the idea of the developmental benefits of free trade needed to become entrenched.
He stressed the importance of partnerships and cooperation in the post-2015 development agenda, urging an end to unilateral sanctions and the systematic process of economic tightening. More positive approaches to economic challenges were required, particularly the debt crises that were faced, in particular by post-conflict countries. Sudan was working diligently to address its own debt crisis in order to focus on its development. He pointed to great successes achieved through bilateral cooperation with South Sudan, as well as achievements in the Darfur peace process, and he called for greater recognition from international institutions of those achievements through the reduction Sudan’s external debt.
JUTTA URPILAINEN, Minister for Finance of Finland, said the sustainable use of natural resources required that today’s generations recognize the limits of global resources and did not exhaust them beyond their fair share. That issue was linked to the “harmful and expensive” practice of subsidizing fossil fuels, which Governments often defended with the need to meet social objectives. Yet, data showed that subsidies mostly benefitted the rich.
It was not enough that natural resources were shared fairly among generations, she continued, so, too, must opportunities. A consequence of the crisis had been a dramatic increase in youth unemployment, which threatened to create a decade of lost growth, and further, a lost generation. Over 600 million young people lacked working or studying opportunities. Knowledge and skills were essential for productivity, which meant that young people must not drop out of school. In Europe, a “youth guarantee” initiative had been introduced, which offered a job to young people after four months of unemployment. She hoped that model would be introduced on other continents. Education and training required a functioning tax system. A comprehensive approach to sustainable development must be based on intergenerational fairness. Only in that way could States truly change their consumption patterns towards a more sustainable future.
CLAUS J. RAIDL, President of the Austrian National Bank, said that the euro was a “success story”. There was no crisis of the euro. Rather, there was a sovereign debt crisis, a growth crisis and a banking crisis. There was no problem with paying or saving in euros, and it performed strongly as a reserve currency, with its share globally, in fact, increasing. Economically speaking, the years since introduction had been successful for members. Inflation had been kept “close to, but below, 2 per cent”, which was the price stability goal, and stability had also been achieved in balance of trade and payments. Now, the “big task” was to increase competitiveness in those countries with imbalances. That, he said, was “undisputed”. The banking crisis was at the root of problems currently facing the euro. Sovereign debt had grown when Governments attempted to tackle the banking problems and the business fall-out from that. Increased unemployment had further added to national deficits and a “growth solution” was needed to tackle those problems.
He acknowledged that Europe was weaker economically than Asia and the United States, though there were growth areas within Europe. It was the task of Governments to solve their growth problems, while simultaneously increasing the competitiveness of their economies. There were different philosophies on how to achieve that, but growth was needed to tackle unemployment. He addressed the issue of the engagement of Austrian banks in Central and Eastern Europe, which he said was a success story. Though there were some problems, balance sheets were good and reserves existed, particularly in countries that had a strong industrial base, he said.
YASEEN ANWAR, Governor of the State Bank of Pakistan, said while the world economy was seeing some signs of recovery, it was still mired in an economic and financial crisis. Developing countries had faced the worst consequences of the crisis. Deeper reform would be necessary to maintain stability. “Global economic stability is a common good,” he said. As such, it required shared understanding, not simply shared responsibility for its preservation. While many countries could withstand the intensity of the crisis, shock absorbers in the developing world either were not available or were insufficient, as had been seen in the enhanced risk premium on lending and investments, which, in turn, had resulted in a surge in external financing costs.
He said the ability of countries to anticipate economic crisis required considerable reform. He agreed that overcoming global structural and institutional imbalances was important. Moreover, the continuation of the crisis aggravated the risks of debt distress in vulnerable countries, both due to exchange rate depreciation and borrowing at higher interest rates. If not stemmed, the crisis would continue to worsen the budgetary position of many countries, due to the potential decline of ODA. Many developing countries faced serious deterioration in the balance of payment positions.
He went on to say the new development agenda must provide differential treatment to small islands and least developed countries. It should create policy and other incentives for countries to develop “home-grown” economic plans, as well as mobilize domestic resources. A new global partnership must be centred on the need to transform towards sustainability without compromising growth. A future agenda should incentivize countries to achieve their economic objectives. While poverty eradication should remain at the core of global economic discourse, it was not just a question of increasing income. It involved increasing the opportunity to grow, through education, better health facilities and social equity. Finally, an urgent and immediate focus must be placed on enhancing modern energy services, which would bring a qualitative change in the lives of billions of people.
GUNILLA CARLSSON, Minister for Development Cooperation of Sweden, said it was possible to eradicate poverty “in our times”, but that it would require a lot of work, particularly given the fact that the global economic and financial crisis would continue to hamper the efforts of developed countries to help bring poorer people out of poverty. She stressed that resources were created not by Governments, but by individuals, and that it was important to strive for a world where people could haul themselves out of poverty, with national Governments needing to work to help mobilize resources for development. It was important for developed countries to honour their ODA commitments and to target that assistance on poverty reduction.
There were many advantages to multilateral development cooperation, she said, with one of its most important being its ability to reach places that bilateral aid could not. Greater efficiency in that regard was important and improvements in governance would help to boost efficiency. Multilateral assistance was more important than ever and it was easier than ever to distribute it. However, Member States invested less in functional multilateral institutions than ever before, she said, underlining the features of the United Nations that made the Organization unique, including its global legitimacy, its independence in monitoring and its status as the guardian of global norms and standards. Work was needed to transform the United Nations into the body it needed to be and the Quadrennial Comprehensive Policy Review offered an “important tool” to achieve that. It was necessary for States to join together in order to put it into practice, she said, echoing the words of Dag Hammarskjöld, who said that the United Nations was not tasked with taking mankind to heaven, but to save it from hell.
She hoped for closer cooperation between the United Nations and the World Bank. Having attended several meetings, she was “very optimistic” in that regard. Areas of overlap needed to be bridged, but that could be achieved. One way was through dialogue at the country level, between United Nations resident coordinators and World Bank country directors. She also addressed the issue of gender equality, stressing that it was a “prerequisite for development” and that that view was “supported by facts and figures”. There was big potential to move forward. Using and unleashing the potential of women and girls was the “biggest part of the solution” to the problems at hand.
SEYED SHAMSEDDIN HOSSEINI, Minister for Economic Affairs and Finance of Iran, said the global economic and financial crisis continued, with cash flow disruptions impacting financing for sustainable development. Financing was among the most important problems for developing countries. Almost 80 per cent of investment in developing countries’ infrastructure was being financed by the public budget. To preserve economic growth, those countries must increase such investment to $1 trillion annually until 2020. If environmental protection was added to the list, no amount of resources would be adequate to fill the gap between what was available and what was required.
As such, he advocated use of a model that neutralized the unwelcomed presence of Governments in economic activities. Iran had the potential to attract financial resources, especially now that it had a new capital markets law to attract more foreign investment. His Government expected the World Bank to treat countries equally, but unjustifiable behaviour, due to political attitudes, had resulted in the halting of some of Iran’s projects, despite the fact that Iran had provided enough social justification to carry them out. Western Governments had imposed sanctions, making baseless claims regarding nuclear issues. While exercising its right to benefit from peaceful nuclear energy, Iran had tried to neutralize the impact of those sanctions.
Due to restrictions on money transfers, sanctions had had undeniable impacts, he said, limiting Iran’s access to medicine and medical equipment. In addition, sanctions had affected Iran’s trading partners. Energy security for countries importing energy from Iran had been jeopardized. In addition, many of its trade partners, including third-party countries, were on the verge of losing their commercial benefits. At last year’s summit of the Non-Aligned Movement, Iran had raised the important need to strengthen the Council as a main “point of reference” for promoting cooperation and coordinating socioeconomic policies.
LUIS ARCE CATACORA, Minister for Economy and Public Finance of Bolivia, said several crises were feeding into one another in a “feedback loop” that revealed a structural crisis of “senile capitalism”. International organizations had been unable to solve the problems and the various crises had actually worsened since they began in 2008, and recession persisted because of a lack of a permanent or effective solution to the debt crisis in Europe and the United States. Although speculators were making huge profits on raw materials and assets transacted in financial markets, institutions had failed to provide an adequate policy response to counteract the crisis medium- to long-term. The “hegemonic countries” wanted their privileges to prevail, as did strong corporations, but the deep-seated crisis demanded “bold and daring solutions”, setting aside capitalist orthodoxy. Restructuring was needed in highly indebted developed countries to reduce the suffering of their people and of people worldwide. Running counter to empirical evidence to the contrary, economic policy had been captivated by the idea of a need for fiscal austerity.
Developed countries were concerned with long-run stability, he said. Their responses decreased fiscal stability in countries that were in systemic crisis, harming their prospects in the short-run, and probably in the long-run, too. To properly tackle the crisis, he said that direct subsidies were needed on a temporary basis for the poor, with a similarly temporary tax on financial transactions, as well as oversight of capital, increased technology transfer and real access for poor countries to markets for their products. He said people in richer countries that were affected by the crisis should expect lower standards of living, while more poverty lay ahead for the world’s poorest. That was not just because of long-term unemployment, but because of a general increase in income inequality. Corporate profits were up, but wages were not. The vulnerabilities experienced by developing nations, including dependence on commodities for income, meant they were unable to protect themselves. He called for State control to promote a more equitable, less volatile growth, stressing the importance of fiscal policy to enhance economic dynamism. He also urged States to separate commercial banks from investment banks to ensure that commercial banks’ funds were not used to speculate.
JORGE ESPAT, Special Envoy of the Prime Minister of Belize, said that, with 360,000 citizens and a $1.6 billion economy, Belize was “a great little nation”. Without any support from multilateral institutions, his country had weathered the storms of the financial crisis with a sense of optimism, having avoided economic contraction and achieved 5.3 per cent growth in GDP last year. Having recently restructured its debt, Belize now had a unique vantage to assess the “emergency room” services being delivered to countries afflicted by high debt and slow growth.
Generally speaking, he said actions taken by multilateral institutions to help small States had been “shamefully inadequate”, stressing that emerging and small countries needed more voice in multilateral financial bodies. If the Group of Seven or Group of 20 were “elephants”, small countries could not be called “small elephants”. Solutions must be tailored for small States, a position that had been advocated by many since 1965. The General Assembly perhaps provided the optimal “anti-club” model for such work. The post-2015 development agenda must reward behaviour required for the planet to survive. He noted that that Belize’s balance sheet should reflect its many world heritage sites — timeless treasures — as assets. Small States required multilateral finance institutions to issue assistance for the development of financial markets and more equitable management of international risks.
He said those bodies also must address the volatility that small States experience in their GDP, tax revenues and terms of trade, which in turn, made their public finances vulnerable. In most cases, unsustainable debt had been unsustainable from the outset of lending, due to “unscrupulous” lenders. In sum, the global experience had been a tale of two extremes that, on one hand, rewarded profligacy with massive amounts of money, and, on the other, left small States to restructure without a dime of direct assistance.
An interactive dialogue followed, with delegates raising several questions for discussion by the panel. Costa Rica’s representative raised the question of the specific, tangible measures taken or considered by the Bretton Woods institutions to address climate change, which he said was possibly the most serious crisis being experienced by mankind. He further enquired how they expected to coordinate with the United Nations. A representative of the World Meteorological Organization (WMO) also raised the issue of the impact of climate change on the global economic situation going forward and believed that development could be impeded if there was a failure to address the issue.
Romania ’s representative said the world economy’s dynamics were evolving to a new paradigm driven by the emerging markets, especially those in Asia. That had implications for financial institutions and they needed to take account of emerging nations and rethink and reform their infrastructure. A representative of Cross Border Finance also addressed the changes that were occurring in the global economy, stressing that the major problem lay in Europe. Austerity there had created a situation that was comparable to that which had prevailed in Argentina at the turn of the Century.
Sudan ’s delegate pointed out an “organic relationship” between the crisis and external debt. Debt was the major reason for poverty, especially in least developed countries, he said, saying a heavy burden lay on developing nations. They were deprived of easy financing and the gap would widen and lead to reduced rates of growth in poorer countries. It was poorer people who were most affected by the financial crisis, even if it had started in the richer, more developed world. Poorer countries were unable to protect themselves and the post-2015 development agenda needed to emphasize their needs to ensure they were not adversely affected by the repercussions of financial crises.
Also taking part in the interactive dialogue were representatives of Bread for the World, Global Clearing House for Development Finance and the United States Council for International Business.
MAHMOUD MOHIELDIN, Special Envoy and Representative on the Millennium Development Goals and Financial Development, World Bank Group, outlined five pillars around which the post-2015 development framework was being created: a new spirit of partnership; equity and inclusion; the environment and climate change; good governance; and matters related to peace, human rights, human security and protection of peoples’ freedom to choose. For the World Bank Group, ending poverty and fostering shared prosperity were two goals it hoped to achieve by 2030. Further, it was refreshing that the World Bank and the United Nations were jointly considering matters to prepare for the future, with an emphasis on sustainability, reducing waste and improving policy resilience.
But even amid such good intentions, implementation was needed in matters of finance. To frame the debate, he asked about countries’ willingness and ability to achieve the objectives articulated under the consultation process for devising the post-2015 development agenda. Other questions centred on whether delivery mechanics were in place, especially for health and disaster risk management, and whether accountability frameworks, access to knowledge and research and good monitoring mechanisms were in use. In that context, he announced a “new phase of collaboration” among the United Nations, World Bank, regional development banks and others to enhance statistical capacity-building and the availability of all development data to the countries that needed them.
Against that backdrop, he said the World Bank Group took a practical approach to finance issues that took into account five financing sources: Governments; the domestic private sector; international financial sources; emerging players, including private aid; and the new role of ODA. It then matched those financing sources with development priorities to ensure the best use of each source to meet its respective goals. Today, there was a good synchronicity between development and financing priorities.
In leveraging additional resources, he said developing countries should mobilize domestic resources, including the private sector, while the international private sector could offer additional support. As regards tax revenue, there was no good news to share. Tax efforts by low-income countries “left a lot to be desired”, even as regards basic data, such as tax revenue-to-GDP data. Many countries had not reformed their tax systems. On public spending, he questioned the fairness of energy subsidies, for example, that offered the bottom 20 per cent of a population less than 8 per cent of the related benefits.
He went on to say that ODA comprised 1 per cent of capital flows. For low-income countries, it could be recognized as a source of long-term finance, as there were growing examples of $1 in ODA being matched by $7-$9 in other sources. In sum, he said no institution or Government alone could deliver success. Finance must be placed into the context of funding sources and mechanisms of effective delivery. That way, all financing sources would provide support to global development priorities.
Statements by Intergovernmental Representatives of Institutional Stakeholders
MUKTAR TILEUBERDI (Kazakhstan), speaking in his capacity as President of the Trade and Development Board of UNCTAD, said the core of discussions remained the question of staying on track with efforts to empower people to achieve their aspirations and reach their full potential. There was added urgency to the task because of current efforts to formulate the post-2015 development agenda. Reflecting on key ideas stemming from UNCTAD’stirteen session, UNCTAD XIII, he pointed out that, at its core, the United Nations’ development agenda was about empowerment. UNCTAD XIII had addressed the need for development-centred globalization for more inclusive and sustained growth and development. He stressed the importance of trade to accelerating development and said its flows should help to eliminate disparities among nations. UNCTAD, he said, had been at the forefront of efforts to ensure that trade would contribute to development. There was, therefore, a broader importance to trade and it should not be viewed as an end in itself, and that called on States to successfully conclude the Doha Round.
It was important to learn lessons from the global economic and financial crisis, he urged, underlining the need for coherence and consistency in the international economic architecture. The international financial system was the weak link in the international economic architecture, having evolved under its own steam and lacking the public goods component lying at the core of the multilateral process. He called for joint global action to reform global economic governance that built on previous experience, placing greater emphasis on crisis prevention, risk insurance and timely resolution of debt crises.
The expansion of productive capacities was vital and required technological innovation, he said. That, in turn, required stronger efforts to mobilize investment for productive innovation across large parts of the developing world. UNCTAD’s work on development policy stressed the need to establish a collaborative environment that encouraged a wide range of stakeholders to work together to solve the technological problems of the specific local context. Science, technology and investment policies remained disconnected from other national policies that were critical to development, partly because such policies were seen as being primarily about scientific research, rather than development of productive capacities. He called for more attention to address that issue.
JORGE FAMILIAR CALDERÓN, Vice-President and Corporate Secretary of the World Bank Group and Executive Secretary of the Development Committee, reported on last weekend’s meeting of the Development Committee, saying the main item for discussion had been President Jim Kim’s proposal for a common vision for the World Bank Group. The meeting had been “particularly enthusiastic”, he said, with Ministers ratifying the mission of the World Bank Group — a world free of poverty — endorsed goals to guide the World Bank Group’s activities going forward and welcomed the upcoming unified World Bank Group strategy that would be presented for the consideration of the Development Committee at the forthcoming Annual Meeting.
Five building blocks would guide the development of the strategy, he said. They were to serve poor and vulnerable people in a sustainable manner everywhere, to recognize the diversity of clients, to work as one World Bank Group, to focus on development solutions and to exercise dynamic selectivity. Ministers had also welcomed reform initiatives to help the World Bank Group to maximize its impact. The Development Committee acknowledged that the first Millennium Development Goal — to halve extreme poverty worldwide — would be achieved well ahead of schedule. Ministers had also called on the World Bank group to scale up efforts to support countries in reaching the Millennium Development Goals and to work to end extreme poverty within a generation. The target of reducing the extreme poverty rate to 3 per cent was “ambitious, but achievable”, requiring strong growth across the developing world.
There were institutional and governance challenges that needed to be overcome, he said, with investment in infrastructure and agricultural productivity vital. He stressed the need to achieve poverty reduction and shared prosperity in a sustainable manner, stating that climate change was of particular importance in that regard, as was ensuring social inclusion and limiting the economic debt inherited by future generations. To achieve the Goals, it was important to have a proper partnership between the United Nations and the World Bank Group.
PATRICIA ALONSO-GAMA, Deputy Secretary of the IMF and Acting Secretary of the International Monetary and Financial Committee, updated the Council on the Fund’s role in addressing the most recent economic developments, saying that some countries had fared well, others were on the mend, and still others had a long road to travel. Global growth was not expected to be much higher than last year. Recovery in the European Union was elusive and Japan still faced deflationary risks. In far too many countries, changes in financial markets had not translated to improvement in peoples’ lives. Policies that repaired the impacts of the crisis were needed, especially those that addressed fundamentally underlying weakness.
For its part, the Fund continued to support its membership, she said, noting that, for advanced economies, it had outlined policies to support growth and reduce balance sheet risks. It also would monitor the impacts of prolonged monetary easing. For emerging markets, it was helping to address volatile capital flows, while in low-income countries, it was helping to improve policy “buffers”, provide financial assistance and step up efforts to raise financing for poverty reduction plans. It also was focusing on financial sector oversight and capital market deepening.
Stressing the need for collective action, she urged countries to complete financial sector reforms, create jobs and attack the risk for global spillover. Public and private debt was another concern. The Fund would help identify the risks to fiscal sustainability, and help manage debt portfolios, in part by working to strengthen national institutions. In addition, it would advise on tax and spending policies to encourage labour force participation. As for the Fund’s governance reforms, she cited progress in making reforms started in 2010 effective, with two of the three conditions having been met. Completing the review of the Fund’s new quota formula would be an important next step in the reform process. In sum, the Fund required resources to be a “guardian” of global stability and reflect new global realities. With that, she urged all actors to continue working in a coherent, cooperative and coordinated manner.
SHISHIR PRIYADARSHI, Director, Development Division, WTO, briefed the Council on the status of the Doha Round of trade negotiations, recalling that he had joined the WTO at the time of its launch. “We’re still no closer to an agreement,” he said. But, a great deal of work had been done over the years that would allow the Doha Round to result in a far bigger, deeper deal than any of the previous rounds. Countries had been unable to agree because the global situation had changed dramatically, he said, with big economies unable to give as much and emerging economies no longer confident they could agree to the same level of concessions.
Trade growth also had suffered, he said, with estimates showing world trade would grow by 3 per cent in 2013, versus an average 5 per cent annual growth over the last two decades. The upcoming WTO Bali Ministerial Conference would offer an opportunity for agreement on three key issues. On trade facilitation, any agreement that reduced border delays and transit expenses would be an important one. While that sounded minor, the cost of just moving goods each year — not considering the value of goods — had hit $1.8 trillion. Taking away just 10 per cent of that amount would do much for landlocked developing countries and others facing trade barriers due to a lack of predictable and affordable transit.
In agriculture, he said there could be agreement on ensuring that quotas did not go unfilled, noting an urgent need to phase out export subsidies. A third issue related to the development dimension. “Without such an element, any amount of work we do, or gains we achieve, will not percolate down to the countries that need it the most.” There was hope for a “least developed countries package”. Between now and the Bali meeting, the spotlight would turn to the July review of the WTO’s “Aid for Trade” initiative. The most recent figures showed there could be a downtrend in commitments. Given the important role of trade-led economic growth in increasing domestic revenue generation, it was essential that the post-2015 agenda included economic growth as a central pillar of its strategy.
Thematic Debate of the Whole on Theme 2
The first afternoon thematic discussion focused on the theme: “Financing for sustainable development, including leveraging of private capital in the context of the follow-up to the outcome of the Rio+20 Conference”.
SHAMSHAD AKHTAR, Assistant Secretary-General for Economic Development at the Department of Economic and Social Affairs, said that financing for development had assumed a “clear urgency”. “Dark clouds” hung over the ability of the public sector to mobilize funding for development with sovereign debt at an all-time high, continued fiscal austerity and low ODA levels. South-South flows held high promise, but countries were sticking to bilateral options instead of joining global partnerships.
The need for resource mobilization was made clear in the Rio+20 outcome document and an intergovernmental committee of experts would soon begin work to develop a strategy. The strategy would need to focus on domestic resource mobilization, which meant widening the tax base, as well as tapping all possible sources of public financing. Innovative mechanisms, such as financial transactions taxes, carbon taxes, and similar mechanisms could also be used, as could recognizing that there was ample scope to unleash the potential of private funds through foreign direct investment, for example. It would also need to promote inclusiveness and to rotate its focus from public finances to directing private flows for development purposes.
Financing gaps were particularly large in areas that the private sector had not found attractive on a risk-reward basis, including infrastructure and other long-term investments, riskier investments like low-carbon investments or investments in innovation, financing of international cooperation and additional financing for human development. Possibilities in that regard were impacted by the financial crisis, which affected banks’ willingness to extend finance at affordable rates. With private capital likely to remain driven by a profit motive, there would remain an underinvestment in the public good. That called for public sector policies that could share risk with the private sector. Looking ahead, she saw domestic financing and official assistance remaining crucial.
JAMES ZHAN, Director, Division on Investment and Enterprise, UNCTAD, said that global foreign direct investment (FDI) flows declined by 18 per cent, or $1.3 trillion, in 2012, due to economic fragility and uncertainty driven by a weak economic environment. As a result, the global FDI recovery would take longer than expected. FDI flows might rise moderately in 2013 and further in 2014, but that would only be a slight improvement. A significant risk persisted, which remained crucial for investor confidence. According to current estimates, he said, transnational corporations were holding up to $6 trillion of investment, which showed that, for the time being, there was no sign of significant recovery. Having said that, there had been a change in the investment landscape. Since 2010, there had been a shift in developing countries, which had accounted for over 50 per cent of global investment inflows.
In terms of outward investment, the transnational corporations of developing countries were accounting for more and more investments, up to 30 per cent of global FDI flows. Mainstreaming sustainable development in national and international investment regimes was important, as it needed a policy framework. There was no international investment regime, even though there were over 300 investment treaties, which were full of gaps, overlaps and inconsistencies. It was difficult to find investment in the development paradigm, he said. Many countries were in the process of renewing and revising their investment regimes. In light of that, UNCTAD had formulated an investment framework, used as a guideline to renew and revise countries’ models for bilateral and regional investment treaty negotiations.
Investing in poor areas was important. “We need to change the business mentality,” he said, adding that investing in sustainable development would produce profit in the long run. UNCTAD was collaborating with the International Chamber of Commerce and working with national and international stakeholders, he said. Further, it was important to consider tapping into the huge pool of financial assets through stock exchanges and reaching out to corporations. In addition, tapping into sovereign wealth funds would impact investing and financial resources for development. In the process of formulating future sustainable development goals, it was essential to set a target of investing in the most poor and vulnerable economies.
CHRIS LANE, Division Chief for Low Income Countries, Strategy, Policy and Review Department, IMF, said the purpose of the IMF was to address the balance of payments problems arising from external shocks, such as commodity prices and capital outflows, as well as domestic shocks. A declining debt burden created space for higher poverty-reducing spending. Going forward, the IMF had developed a model which would project demand for support, and which expected demand to be reduced from its current elevated levels, given that the current financial and economic crisis had tapered off. A larger amount of financing for a smaller number of countries would be the future trend.
Selling gold at much higher profits than expected enabled the IMF to subsidize some financial endeavours. When completed, he believed it would serve as a self-sustaining global economic strategy for low-income and vulnerable countries. In terms of the Fund’s facilities, demand was within the expected range, and therefore, only minor refinements were proposed. One was to target resources to the poorest and most vulnerable countries, as they continued graduating to “better off”. Three micro-States had also become eligible for concessional borrowing, he said, as the IMF had concluded that small economies were increasingly vulnerable to the current economic environment. He said that the IMF also provided policy support in helping countries scale-up investment, manage natural resource mechanism, recognize fragile small States needs and create broad based inclusive growth.
Interactive Discussion 2
An interactive dialogue followed, with delegates raising several questions in response to the panellists’ presentations. Several interventions stressed the importance of finding new and additional sources of financing and of maintaining a multi-stakeholder approach to financing. Germany’s representative said that only one approach to financing was needed, but that it needed to be integrated. The Financing for Sustainable Development work stream needed to be combined with the “regular” financing for development and should build on it.
Also stressed by delegates, including an executive director of the World Bank, was the issue of innovative sources of financing for development. He said the World Bank Group had tried to harness non-traditional sources of investment from sovereign wealth funds, long-term insurance funds and other private sources to invest in countries and regions where expertise was lacking.
Delegates also stressed the importance of addressing the 1 billion people living in poverty and the European Union’s delegate said that ODA alone could not be expected to ensure fulfilment of the Millennium Development Goals. While it remained crucial, other sources like foreign direct investment, remittances and private flows were gathering prominence. He also pointed to the potential impact of innovative mechanisms for supplementing ODA, and said the European Union would reaffirm its commitment to implementing the Rio+20 outcomes.
The delegate from Peru was greatly concerned about an “assertive” reference to “the global commons” when it was not part of the official post-2015 development agenda. It had been referred to several times, she said, despite the fact that the Convention on Biodiversity had made it clear that national resources belonged to States and that States should retain sovereignty over them.
Other delegates taking part in the interactive dialogue were from Brazil, China and Nicaragua. Representatives of Citigroup, the International Women’s Anthropology Conference, the Arab NGO Network for Development and the Africa Interchange Network delivered remarks, as did another executive director of the World Bank.
Thematic Debate of the Whole on Theme 3
The Council then turned to its third theme: “Global partnership for development in the context of the post-2015 development agenda”.
JOS VERBEEK, Lead Economist, Work Bank, presenting his organization’s 2013 report on rural-urban dynamics and the Millennium Development Goals, said that there was no time to be complacent. It was unlikely that any new Millennium Development Goals target would be met by the 2015 goal. He pointed out that only half of the countries monitored were expected to achieve the Millennium Development Goal of gender equality. However, there was still hope that some countries would get close. For example, 20 additional countries were expected to achieve the Goal on reducing child mortality by the goal date.
The report concluded that urban areas did much better in achieving the Goals than rural areas. Improving basic sanitation in rural areas was crucial — as 80 per cent of urban residents, compared to 50 per cent of rural residents, had access to a toilet in 2010. Differences were not that large in all sectors, but certainly the quality of available resources in rural areas lagged behind those available in urban areas. In addition, rural schools had difficulty attracting teachers. The poor were disproportionately located in rural areas and small towns. Cities were viewed as centres of economic prosperity and opportunity. It was one thing to understand the interrelationship between the rural-urban dynamic, it was another to understand its implications.
The report called for an integrated strategy in which city planning came first. That would allow city officials to be in the “driver’s seat” rather than be dictated to by third parties. Hence, Governments would control their cities’ destinies. In the past, urbanization had not been managed well, he said, and currently 1.5 billion people dwelled in slums, where they faced a declining quality of life. He emphasized the importance of health and education, as it equipped people with skills and better prepared them, whether they moved to urban areas or stayed in rural villages. As three quarters of the world’s poor people lived in rural areas, it was crucial to address productivity matters.
RICHARD KOZUL-WRIGHT, Officer-in-Charge, Division on Globalization and Development Strategies, UNCTAD, said that as discussion on the post-2015 development agenda was in full swing, UNCTAD’s legacy, including in areas of debt relief, South-South cooperation and policy space, was part of that conversation. Building a truly prosperous and inclusive future meant steering away from “business as usual”. The Millennium Development Goals did an outstanding job at galvanizing aid flows, and in some assessments it was a happy marriage, although recent success stories had rejected and avoided policies proposed by the Washington consensus. In recent years, capital flows, including foreign direct investment, commodity prices, and debt relief, all moved in the favour of developing countries and triggered shocking growth in the developing world.
In the 1980s and the 1990s, East Asia benefited from a period of rapid growth and an emerging China. At the same time, it was not a good period for most developing countries, with a collapse in public investment and numerous financial crises. Advanced countries were able to recover from the dot-com bust resulting in a growth gap for the South. The current economic crisis thankfully did trigger a large stimulus package, which helped avoid a repeat of the 1930s. In regard to growth being a central component to a meaningful post-2015 agenda, it was essential to question how inclusive and sustainable any growth spurt actually was, he said. He was sceptical that developed countries had learned from the last economic crisis, as imbalances were increasing once again, speculation was resurfacing; and banks were again “too big to fail”. That was responsible for dragging down growth in developed countries. The current economic environment was very different from the one in which the Goals had been formulated and evolved. The “creation of virtuous circles” must be key to any serious discussions on sustainable development.
Meeting the challenges set out would require dedicated action and bold leadership at the national and international levels. There was nothing more corrosive than the belief that there was some set of rules for some and other rules for others, he said. The challenge was figuring out how a “global new deal” benefited not only developed countries, but developing countries, as well. The answer, which was also true in the 1930s, was to tame the financial sector so that it became a servant, rather than the dictator of the real economy. Surveillance and regulation would also be necessary, in that regard. South-South cooperation, which he was optimistic about, but cautiously so, remained an outlet for developed and advanced countries to realize the kind of “future we want”.
SHISHIR PRIYARDARSHI, Director, Development Division, WTO, said that achieving the core objective identified by the Unite Nations task team, namely human rights, equality and sustainability, would be impossible in the absence of sustained, broad-based economic growth, and that overlooking the importance of economic growth in the post-2015 development agenda, would be a mistake, for both substantive and political reasons. One of the best pragmatic thinking on the connections between growth and development was the “Growth Commission”, whose research found that virtually all cases of rapid large-scale human development had been marked by a high average rate of economic growth. The Growth Commission also found that all the countries transformed by sustained high growth had “fully exploited the global economy” and had used the open world economy to drive development.
Therefore, a leading objective of the new development framework must be aimed at helping countries that had been left on the margins of the “great convergence” to emulate the successes of faster-growing developing nations. That would entail enhancing the demand and supply side, enabling environments for them to achieve high economic growth, driven by trade in a diversifying basket of products. More needed to be done for countries currently on the margins of global commerce to have a better chance of breaking into world markets. He stressed the need for mutual supportiveness between the economic rationale of the new development agenda in line with the core objectives of the post-2015 agenda. It should also include economic growth as a central pillar of its post-2015 strategy, while at the same time ensuring that economic growth and development were made sustainable. Any development agenda which was “people focused” and “forward looking” must have a strong emphasis on the economic aspect of human development.
Interactive Discussion 3
In the interactive discussion that followed the panellists’ presentations, an executive director of the World Bank Group took the floor to say that having agreed wholeheartedly with Mr. Priyardarshi’s earlier intervention, he had wholeheartedly disagreed with his latest one, in which he stated that improvement of well-being in developing countries was dependent on economic growth. He believed Brazil’s population had achieved well-being improvements through social inclusion policies, while the Brazilian economy had never grown especially quickly. The Government’s approach had not only improved the population’s well-being, but also its citizenship, with many members of society engaged with issues such as sustainable development. He urged States not to focus on growth, as recent global growth had proven unsustainable. Stressing social inclusion in development policies would require more effort than focusing on growth, he acknowledged, but it was the path that had to be followed and he urged the international community to pursue the reduction of inequality over simple economic growth.
A number of representatives referred to the Monterrey Consensus as the established and most important road map for financing for development. Mexico’s delegate did so, calling it, along with the Doha Declaration, an important reference point for the international approach to development financing and the world partnership for development. She said the Monterrey Consensus would remain relevant within the context of the post-2015 development agenda, which should look to completely eradicate world poverty.
Taking up the issue of the post-2015 development agenda, a representative of the Egyptian Center agreed that structural reforms were vital. Austerity worked against economic and social growth, she said, pointing out that the Arab countries that had revolted when faced with economic hardship were now facing austerity measures with no safety nets. She called for a widening of the right to development framework, as well as increased transparency on expenditures for fulfilling the Millennium Development Goals.
Several other delegates took up a number of other issues stemming from the panel discussions, with the rethink of the public-private partnerships, the importance of redoubling efforts to integrate women and girls, the special needs of least developed countries and the potential impact of the Quadrennial Comprehensive Policy Review all receiving attention.
The delegates of Japan, Benin, Republic of Korea, Venezuela, Ethiopia, South Africa and the European Union also took part in the debate.
Representatives of Business Steering Committee, the Virginia Gildersleve International Fund, the Third World Network, the United States Council for International Business, along with a second executive director of the World Bank Group also responded to the panellists.
* *** *For information media • not an official record