ECOSOC panel discussion on “Global Economic Governance”

Distinguished panelists and participants,
Ladies and gentlemen,

I would like to thank Ambassador Wetland for his kind invitation to participate in this panel.

As we meet, the world is still feeling the aftershocks of global financial and economic crisis.

The United Nations has warned that the recovery remains fragile and uneven. It does not compensate for the losses suffered.

Tens of millions more people have been pushed into extreme poverty. Unemployment and vulnerable employment remain unacceptably high. Hard-won gains towards the Millennium Development Goals are at risk.

The multiple crises – food, energy, climate, financial and economic – have exposed the weaknesses in our international financial and economic system.

Globalization has created a much more complex interdependence across countries. Many developing countries have emerged as powerful players in the global economy. Climate and demographic changes will further reshape the patterns of global development.

There is an urgent need to reflect and integrate these changes into our structures, mechanisms and practices of global economic governance.

We can take some confidence in the response to the global crisis so far.

As the Secretary-General has stressed, governments have acted in a spirit of multilateralism. Protectionist measures have largely been avoided. Stimulus packages were enacted. New financing was provided to the IMF and the World Bank.

Most of these measures were taken by the Group of 20, a self-selected and informal grouping, representing a large portion of the global economy.

Moreover, G20 leaders have reformed lending facilities of the Bretton Woods institutions, improved accessibility to trade finance, and provided full relief of Haiti’s debt to international financial institutions. They have also made efforts to strengthen the representation of developing countries in the IMF and World Bank, and are engaged in reforming financial regulation.

The response of the G20 in countering the global economic crisis has indeed been impressive.

Some have taken this as a sign that limited membership is necessary for effective action. More than one third of the world’s people, and 85 per cent of its countries, have no voice in the G20.

Others point to the UN’s inclusive, global membership – which confers indisputable legitimacy to its actions – as an impediment to its taking timely and effective decisions.

But I do not see an inevitable competition here, on either level, institutional or philosophical. The G20 and the UN can play complementary roles in the ongoing recovery and reform efforts. And, for both bodies, legitimacy and effectiveness need not be mutually exclusive.

Indeed, the Secretary-General has stressed this idea of complementarity. And he has made a special effort to strengthen UN-G20 engagement, while calling for a stronger and more inclusive multilateralism to address the global challenges we confront, including their impacts on the most vulnerable and marginalized communities.

Let me focus on the role of the United Nations in global economic governance.

The inclusiveness of the UN membership underpins the effectiveness and universal reach of its policy agreements. This enables it to take into account both immediate and longer-term issues, as well as the concerns of the most vulnerable and marginalized.

The UN can and does deliver. The Monterrey Consensus and the Doha Declaration have become major reference points for development cooperation. They are two of many examples where the UN’s intergovernmental and multi-stakeholder processes have made a significant contribution towards a more effective and equitable global economic system.

The UN Conference on the World Financial and Economic Crisis and Its Impact on Development has also highlighted the important role the UN plays in global economic issues. The outcome document makes clear that development must be at the centre of any effort to respond to the crisis in a way that ensures stronger, more inclusive, sustainable and balanced growth.

The research and analysis undertaken by UN staff emphasize the impact of immediate and longer-term policies on development and the need for coherence across all areas of global economic governance – aid, trade, economics, finance and movement of workers.

In sum, the UN’s inclusiveness and long-standing institutional strengths give great value to its discussions and negotiated agreements, its operational activities and its research and analysis.

Legitimacy and effectiveness can reinforce each other.

Looking ahead, the focus of the G20 may shift from crisis-management to broader aspects of global economic governance. This will involve delving into a range of deep-seated economic and institutional issues with which the broader UN membership is actively engaged.

We must find ways to work together to bring about more effective global economic governance.

In concluding, I wish to raise a few questions for you to consider:

I look forward to a lively discussion. Thank you for your attention.

File date: 
Thursday, July 8, 2010
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