GA/SM/62

CREATION OF LEVEL-PLAYING FIELD IN GLOBALIZATION PROCESS STRESSED DURING HIGH-LEVEL MEETING, ASSEMBLY PRESIDENT SAYS

21 September 1998


Press Release
GA/SM/62


CREATION OF LEVEL-PLAYING FIELD IN GLOBALIZATION PROCESS STRESSED DURING HIGH-LEVEL MEETING, ASSEMBLY PRESIDENT SAYS

19980921 Call Made for Common Vision of Universal Growth and Development To Benefit All Countries

Following is the text of the concluding statement (translated from Spanish) made by General Assembly President Didier Opertti (Uruguay) to the high-level meeting on renewal of the dialogue on strengthening international economic cooperation for development through partnership, on Friday, 18 September:

The past two days have witnessed the success of a unique innovation in the work of the Assembly. During this high-level meeting, a creative combination of events took place: a plenary debate in which delegations stated their national positions; two ministerial round tables on national and international responses to globalization, which afforded a stimulating and fruitful exchange of views on key aspects of the experience gained and the policies adopted at the national and international levels; and two informal panels which brought together a wealth of expertise, knowledge and perspectives from the private sector, the academic world, trade unions and civil society at large.

Thus, the vast and complex issue of globalization, its social and economic consequences and possible policy responses have been addressed from various perspectives. The dialogue has been held in a constructive spirit. The debates and the discussions have been very rich and full of ideas and suggestions that form a basis on which to seek the way forward. The address by the Secretary-General that we have just heard and the statement by the Deputy Secretary-General at the start of our debate identify the guidelines and orientations that seem to emerge from this dialogue session.

It would not be possible for me to do justice to the range and diversity of views and the richness of ideas and proposals that have been put forward in the last two days, if I attempted to summarize our debates at this time. A comprehensive summary will be prepared under my responsibility, in consultation with delegations, and will be circulated in the next few days.

Let me here offer a few observations and set forth the main highlights:

-- This high-level session has clearly shown the usefulness and value of timely and continuing dialogue with ministerial participation on this most critical issue of globalization, which affects the whole of humanity; the need for such dialogue was broadly recognized;

-- Dialogue implies an "interaction" to enhance understanding and seek solutions. In this sense, it would not be wrong to say that we have taken the initial step, by promoting better understanding and identifying areas for further action;

-- The exceptional timeliness and relevance of our dialogue and the important role of the United Nations in promoting it was recognized by all;

-- Globalization is seen as inevitable -– a reality, not an option. It is a positive, and not an evil, force, but it is also blind and needs to be carefully managed by countries nationally and through international cooperation;

-- Globalization brings about worldwide allocation of resources, stimulates growth and increases welfare. For better integration into the world economy, countries need to adopt sound macroeconomic policies, develop effective institutional and legal frameworks, and build the necessary physical and human infrastructures; developing countries have the primary responsibility for meeting these requirements, but international support is essential for the success of their efforts;

-- Although tremendous gains have been attained as a result of the globalization process and successful development efforts, the changes brought about by this process and technological advances have increased uncertainties and exposure to risks. Income disparities have continued to widen, severely limiting the ability of developing countries to incorporate state-of-the-art technologies that would boost their competitiveness;

-- The threat of a worldwide deflationary spiral looms, as the current financial turmoil can turn into global economic recession. Swift and decisive actions are urgently needed to counter this possibility;

-- Governments should not overreact by turning to isolation or autarchy, but should maintain an open economy, focus on what they can do to strengthen institutions and structures, stimulate the world economy, stabilize financial markets, increase official development assistance (ODA) flows especially in time of crisis, alleviate the debt burden of the poorest countries and of the private sector, improve market access and increase their support for social safety nets;

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-- Measures to correct market failures are needed from national authorities, but the success of those measures in overcoming the crisis will depend on the actions taken by the world's leading economies and multilateral institutions. A dialogue based on mutual understanding and sharing of responsibilities is required;

-- There is a need to rethink the architecture of the international financial system. Critical elements of such a system should be transparency, accountability and participation at all levels –- national, regional and international;

-- The pace and sequencing of the liberalization of capital flows should be determined by each country in the light of its specific circumstances and needs. The United Nations and the Bretton Woods institutions should work together to support country efforts. Likewise, cooperation between the United Nations and the World Trade Organization should be strengthened to promote international trade and prevent the adoption of protectionist policies and practices. In other words, a transparent rule-based trading system is needed to provide a level-playing field to allow the benefits of globalization to be shared. Africa and the least developed countries, which face the threat of marginalization, need free access to markets;

-- While private capital flows have increased tremendously, they cannot be a substitute for ODA. The level and quality of ODA must be improved. More vigorous debt-relief measures are needed. An increased level of long-term non-concessional loans from the international financial institutions could act as a stabilizing factor. Balance-of-payment surpluses could be recycled as untied loans and humanitarian aid;

-- Considerable attention was given to the marginalization of countries and groups of people within countries and to the problems of asymmetry and inequity which globalization brings in its wake. The devastating social consequences of the current financial crisis, including massive unemployment, loss of health and education services and increased poverty in the affected countries, were of deep concern;

-- For those developing countries which face marginalization in the globalization process, the costs of globalization could outweigh the benefits. Urgent and concerted action is needed to provide them with increased assistance and trade opportunities to enable them to benefit from globalization;

-- The major challenge facing policy makers was seen as how to make policies and measures designed to address the problems in financial markets compatible with strategies aimed at the eradication of poverty;

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-- With financial and labour markets inherently volatile, the need for regulation and supervision was obvious, but the institutions necessary for such oversight were clearly lagging far behind the forces of globalization. Consequently, acceleration of institution-building was urgently needed. To this end, three ingredients were identified, namely: transparency, accountability and participation. These were seen as particularly important in budget-making, as they would contribute to social cohesion and financial stability;

-- Social cohesion and social contracts were seen as coming under serious threat. The pursuit of liberalization in the name of globalization not only with respect to capital flows and trade, but also in terms of privatizing social policies, was putting increasing strains on social solidarity. The move away from the universality of social programmes towards targeted social safety nets for the poor and marginalized was seen as a dangerous trend, as "services for the poor were almost always poor services";

-- Universality of the fundamental principles applied to labour standards was seen as essential for overcoming the divisiveness on the issue in international negotiations. Globalization had segmented the labour market, with the result that the low-skilled had the most to lose from globalization. Overcoming their resistance to globalization required income redistribution within and among countries;

-- The role of transnational corporations in contributing to socially responsible globalization was stressed. As a starting point, they should apply the same practices and standards abroad as they follow in their home countries. Engaging these corporations in avoiding the divisiveness that has arisen between the "haves" and the "have-nots" was seen as essential, and required partnership with the local community, because it is ultimately there, at the local level, that globalization is felt;

-- The social consequences of globalization also were related to the revolution in information technology and the impact of global media which resulted in the emergence of a global culture. Although such a universal global culture was not necessarily bad, it was important to ensure that such a culture did not lead to the exclusion of diversity. Physical boundaries were becoming less and less important; all were increasingly affected by the same events, and the power of the nation-State was eroding. The globalization of criminal activity was seen as another manifestation of this phenomenon;

-- The asymmetric distribution of benefits and risks arising from globalization warranted the conclusion of a new contract between developing and developed countries, based on genuine solidarity and shared responsibility, with a view to creating a level-playing field where all countries could take full advantage of the process. A central aspect of this contract should be a common vision of universal growth and development that would benefit all countries and all individuals.

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For information media. Not an official record.