Statement to the Second Committee

by Mr. José Antonio Ocampo, Under Secretary General for DESA

Delivered on 6 October 2003

Chairperson,

I would like to congratulate you on your election as Chairman of the Second Committee. You bring to this Committee a wealth of experience and I am confident that under your able leadership the Committee will break new ground. May I also take this opportunity to extend my felicitations to other members of the bureau and assure all of you of our fullest cooperation and assistance in your work.

This is the first time that I have the opportunity to address the Second Committee in my capacity as the Under Secretary General for Economic and Social Affairs. I would like to start by paying tribute to my predecessor, Mr. Nitin Desai, who so ably led the Department.

Owing, in large measure, to the United Nations Conference and Summits convened over the last decade, the international community has made significant strides in reaching a global consensus on a development agenda. But we are still a long way from fully and effectively achieving the agreed goals. The challenges are formidable. I see the role of the Department of Economic and Social Affairs as being to support all efforts to meet these challenges by providing analytical inputs, facilitating policy development , extending technical cooperation and ensuring a coordinated UN system approach in all these areas. I am taking steps to further sharpen the focus on these activities. In this endeavour, I look forward to working very closely with the Member States, other UN organizations, the Bretton Woods Institutions, and representatives of civil society and the private sector.

Chairperson,

We begin this session of the Committee at a time when the world economic recovery is gaining traction. The economic effects of geopolitical uncertainties and the SARS epidemic have abated and emerging data are indicating improvements in an increasing number of countries. In the absence of new shocks, the recovery is expected to solidify and broaden in 2004. For the short-term, therefore, the outlook seems promising, but significant global macroeconomic imbalances cast a shadow over medium term prospects, in particular the excessive reliance of world economic growth on one country. The recent setback in the WTO negotiations also generates a sense of uncertainty about future prospects.

Notwithstanding the current improvement, global economic growth has slipped since the Millennium Declaration was adopted, with developing countries bearing the brunt of the slowdown. Particularly with globalization, the developing countries have remained vulnerable to external events, despite the continued progress they have made in improving their domestic policies.

In addition to its short-term effects, the recent slowdown has - once again -highlighted some of the longstanding bigger questions. How to make globalization equitable and inclusive? How to enable, in particular, the poorest members of the international community to share in the benefits of global integration? How to promote collective action to deal with growing interdependence? And, not least, how do we – both Governments and the international institutions that support them – make these collective efforts more effective? These are some of the fundamental issues that were raised by a number of speakers during the Assembly’s recently concluded general debate.

Some developing countries have benefited from globalization, but a large number of them have either been by-passed or have suffered from some negative consequences of global integration. The overriding fact is that, to date, globalization has been associated with growing inequity, asymmetries in global development and constraints on domestic policy options. No simple answers to these shortcomings but, in searching for solutions, we could focus on two broad objectives that would greatly contribute to turning globalization into a positive force for all the world’s people.

The first objective must be to build a global citizenship in order to tackle global challenges. The elements of such an approach were highlighted by the Secretary-General at the 54^th session of the UN General Assembly (1999) and later in his report “We the people” for the Millennium Summit. At the Summit and in the resulting Millennium Declaration, world leaders identified poverty as a global challenge. In addressing this challenge, they adopted a series of clear, time-bound, development targets. The Millennium Development Goals range from providing universal education to stemming the spread of HIV/AIDS, with the overarching aim of halving extreme poverty by 2015. The goals encompass “a global partnership for development,” which comprises a set of commitments by developed countries to support the efforts of developing countries through increased aid, a non-discriminatory trading system and debt relief.

Since the adoption of the Millennium Declaration, there has been substantial progress in elaborating the nature of this global partnership, most notably in the Monterrey Consensus and the Johannesburg Plan of Implementation. The implementation of the outcomes of the UN conferences and summits of the 1990s and of the Millennium Summit, the Monterrey Conference, and the Johannesburg Summit would greatly contribute towards the goal of equitable and fair globalization. Our immediate task must be, despite recent difficulties, to maintain the new spirit of international cooperation for development that gave rise to the Millennium Declaration and these other commitments. General Assembly resolution 57/270B on the integrated and coordinated implementation of and follow-up to the outcomes of the major UN conferences provides a consolidated framework for continuing this effort. Both developed and developing countries must live up to the responsibilities that each has assumed. Stronger political accountability for international commitments, both at the national and international levels, will increase the quality of such commitments.

But there are many areas in which actions by countries on their own are insufficient. As we have clearly seen during the past decade of accelerated globalization, collective action is required in such areas as peace and security, terrorism, international pandemics, environmental sustainability, world macroeconomic and financial stability, and regulation of the global market place, among others. There is repeated evidence that existing international structures do not deal adequately with the management and financing of these dimensions of global interdependence -what some observers refer to as global public goods. This situation needs to be rectified. I fully appreciate that legitimate questions and concerns still surround the concept of global public goods but this should not detract us from capturing the main message, namely the need for collective policy responses to aspects of interdependence that are global in character.

Within this overall cooperative endeavour, the second major objective should be to overcome the asymmetries that characterize the current global system. These asymmetries fall, in turn, in three broad categories. The first category is associated with developing countries’ macroeconomic vulnerability to external shocks and their limited ability to cope with such shocks. The second is the concentration of technical innovation the major driving force of development in industrialized countries. A third asymmetry is the contrast between the high degree of capital mobility and the limited international mobility of labour, especially among low skilled workers.

The first asymmetry, the vulnerability of developing countries to external shocks, should be addressed through a comprehensive approach, such as that provided by the Monterrey Consensus. An essential element of this approach is that the developing countries take appropriate action at the national level. But it is equally necessary to reduce the segmentation and volatility of developing countries’ access to international financial markets, to provide larger room for counter-cyclical macroeconomic policies in the face of volatile capital flows, to promote a holistic approach to the interrelated issues of development and international financial cooperation and to strengthen the role of developing countries in global decision-making processes, particularly in the Bretton Woods institutions and other entities that have a bearing on international capital flows.

To the extent that the flow of technology largely takes place through trade, the second asymmetry is linked primarily with the functioning of the world trading system. For their part, the developing countries need to adopt domestic measures that promote innovation, to participate actively in world trade and to enhance capacity for absorbing new technologies. But such measures will yield limited benefits unless they are supported by a trading system and other modalities that accelerate the access of developing countries to technology and facilitate their increasing participation in technology generation.

The agenda for the Doha round of trade negotiations captures a number of essential changes that will enable developing countries to benefit from trade opportunities. The failure to make tangible progress at the WTO Ministerial meeting in Cancun is therefore a setback not only to the global trading system but, above all, to global development. However, there were positive aspects of the Cancun meeting, including, in particular, the unprecedented, active participation of developing countries in the negotiations. Before the meeting disbanded, there was also concrete progress in clarifying the basis for a successful outcome of the round, and important steps forward on several specific issues.

The Doha negotiations must be continued as expeditiously as possible in order to build on these positive developments; it is essential to ensure that the steps forward are not lost when the process is re-started. However, success requires that future discussions be recognized not as just another round of negotiations on mutual concessions but rather as a universal effort to ensure that the opportunities for development are greatly increased and the international trading system is made more equitable.

The third asymmetry is between international flows of labour and capital. International migration has emerged as an important dimension of globalization, not only for countries with abundant labour but also for the receiving countries that directly benefit from the contributions of immigrant labour. Approximately 175 million persons, or 3 per cent of world population, currently live outside their country of birth. Their most visible contribution to their countries of origin are financial remittances, which are second in quantity only to flows of foreign direct investment (FDI) and are much larger than receipts of official development assistance (ODA). In terms of impact, evidence suggests that remittances directly help to reduce poverty and improve household welfare.

Despite the important economic contribution of immigrants and despite the liberalization that has characterized policies towards other factors of production, the emphasis in labour-receiving countries in recent decades has been on policies aimed at curbing immigration. It is encouraging that this Committee has addressed the issue of labour migration in past years, but the subject needs to be given greater prominence on the international agenda, and to be considered as a complement to international negotiations on trade and the mobility of capital. This should include the particular issues of labour mobility associated with trade in services. At the same time, regional and subregional agreements and complementary mechanism that facilitate migration should also be encouraged.

Enhanced international cooperation is at the core of the effort to implement the agreed development agenda. Enhanced international cooperation can be pursued both by building strong institutions for a better global order and by establishing a network of world, regional and national institutions. Such a network would help in complementing the efforts at all levels. In this regard, it should be emphasized that actions at the regional and subregional levels play a critical role as a midway point between the global and national levels for four main reasons, namely, the complementarities between global and regional institutions in a heterogeneous international community; the unequal size of the actors involved in global processes, which means that many countries’ voices will be better heard if expressed as a regional voice; the greater sense of ownership of regional and subregional institutions; and the fact that the scope for effective economic policy autonomy has shifted in some areas from the national arena to the subregional or regional levels. Thus, a system that relies on networks of global and regional institutions is both more efficient and more equitable. The United Nations provides a platform for building such networks.

Chairperson,

Turning to some of the specific tasks before the current session, I hope that the review of the agenda that you have been mandated to undertake will lead not only to greater coherence in your deliberations, but also to greater overall impact by the United Nations in addressing questions of finance, trade, technology and development in all their inter-relationships, as framed in the Monterrey Consensus, and in advancing the implementation of internationally agreed development goals, including those contained in the Millennium Declaration.

The Committee will also review the state of preparations for the international meeting on the sustainable development of SIDS. The objectives of this important gathering are closely related to issues that are at the centre of the follow-up to the Johannesburg Summit. I trust that the deliberations of your Committee will set the stage for a significant, successful outcome.

One of the key events during this Assembly will be the High-level Dialogue on the follow-up to Monterrey, at the end of the month. Building on a productive and, on the whole, encouraging high-level meeting of ECOSOC with the Bretton Woods institutions and WTO last April, it will provide a first important opportunity for a comprehensive review of progress in relation to both the substantive aspects of the Consensus and the effectiveness of the follow-up mechanisms set up in Monterrey. I trust that the Assembly will pay particularly attention to the architecture for “staying engaged”.

And it is certainly not too early for this Committee and, indeed, for the Assembly as a whole, to begin thinking about 2005. There are, based on current legislation, three related undertakings, namely, the integrated and coordinated follow-up to conferences; the first comprehensive review of the follow-up to the Millennium Declaration; and the second High-level Dialogue on Financing for Development. The major event envisaged in resolution 57/270B provides an important opportunity to ensure maximum impact, across the board, of the goals and commitments generated by the conferences of the 1990s, which have provided the foundation of the Millennium Declaration and were further reinforced in Monterrey and Johannesburg.

Chairperson,

I have set out a broad framework for addressing the challenges of pursuing development in a globalizing world and presented a few ideas that the Committee may wish to consider. This is in no way an exhaustive presentation. I am sure that I will have more opportunities to share my thoughts with the Committee. I look forward to working with you, Chairperson, the bureau and all members of the Committee in our common pursuit of the goal of development for all.