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GA/EF/2880
27 October 1999

MANAGING FORCES OF GLOBALIZATION WOULD MAXIMIZE BENEFITS, MINIMIZE NEGATIVE FALLOUT OF GLOBAL ECONOMIC INTEGRATION

27 October 1999


Press Release
GA/EF/2880


MANAGING FORCES OF GLOBALIZATION WOULD MAXIMIZE BENEFITS, MINIMIZE NEGATIVE FALLOUT OF GLOBAL ECONOMIC INTEGRATION

19991027

As Second Committee Weighs Globalization, Interdependence, Norway Proposes Long-Term Social Investment As Solution to Inequities

Globalization led to a reduction of the sovereignty of states, with the weakest and the smallest being the biggest losers, the representative of Antigua and Barbuda told the Second Committee (Economic and Financial) this afternoon as it continued its consideration of globalization and interdependence.

Speaking on behalf of the Alliance of Small Island States (AOSIS), he said that sadly lacking in arguments for globalization was the need to provide for the pace, direction and content of liberalization, given diverse national levels of development and the need to build up national capabilities. Most pernicious of all was the insistence on free trade for the developing world and exemption from free trade for the industrialized countries. Protective devices were built-in for farmers in dominant economies. They included subsidies, guaranteed markets and payments for limiting production in order to maintain price levels.

On the other hand, he continued, when former colonial countries granted preferential terms to their former colonies of exploitation, challenges were mounted through the World Trade Organization (WTO) by multinational enterprises. There was no more blatant example than Chiquita’s assault on Caribbean banana producers. The sad thing was that everyone knew full well that there had never been such a thing as free trade in modern times. Yet, irrespective of the fallacy of the free-trade argument, recipients of benefits under the Lome Convention were literally being told that they (but not the dominant powers) must conform to and operate under the fallacy.

The representative of Norway said that to overcome the threats posed by globalization, some were prescribing a recipe of protectionism and isolation. “But is this really the alternative in a world where ideas and financial transactions circumvent national boundaries in seconds?”, he asked. Better management of the forces of globalization, at both the national and international levels, was the only way to proceed if the positive effects of an integrated world were to be maximized and its negative aspects minimized. The prospects for the next century depended, above all, on willingness and ability to make the

Second Committee - 1a - Press Release GA/EF/2880 24th Meeting (PM) 27 October 1999

necessary long-term social investments, particularly in health and education, and on the capacity to distribute the benefits of globalization in a more equitable manner.

China’s representative said that global governance needed a global perspective, not a Western one. Globalization so far had advanced on the basis of a market economy, and had been driven by profits. It was inequitable by its very nature. The world macroeconomic policy and the rules of the game directly

affected developing countries’ growth and development. However, those policies and rules were basically laid down by developed countries, regardless of the concerns of developing countries. A programme that would bring real benefit to developing countries could only be worked out in light of their actual conditions, instead of being decided by a small number of countries and then imposed on the rest.

For developing countries there was a structural problem caused instability in short-term capital markets, said the representative of Jordan, where astronomical sums were traded daily, far in excess of world production. The danger there was that capital markets had a great influence on “real” markets of production. The recent Asian financial crisis was the best example of that. The difference between real markets and financial markets was important to consider. While liberalization was necessary for the real market, it had to be introduced gradually and carefully into the financial market.

Also this afternoon, two draft resolutions linked to the Committee’s consideration of sustainable development and international economic cooperation were introduced by the representative of Guyana (on behalf of the Group of 77 developing countries and China).

Statements were also made by the representatives of the Philippines, Cuba, Romania, Chile, Kenya (on behalf of United Republic of Tanzania and Uganda), Colombia, Yemen, Bhutan, Oman, New Zealand, Argentina, Cameroon, the Former Yugoslav Republic of Macedonia, Poland and Croatia. The representatives of the United Nations Population Fund (UNFPA) and the International Labour Organization (ILO) also spoke.

The Committee will meet again at 10 a.m. tomorrow to conclude its discussion of globalization and interdependence.

Committee Work Programme

The Second Committee (Economic and Financial) met this afternoon to continue its consideration of globalization and interdependence. For background on the Secretary-General’s report, see Press Release GA/EF/2878 issued on Tuesday, 26 October.

The Committee was also expected to hear the introduction of two draft resolutions. In connection with its consideration of sustainable development and international economic cooperation, the Committee had before it a text, sponsored by Guyana, on behalf of the Group of 77 developing countries and China, on developing human resources for development (document A/C.2/54/L.10). By its terms, the Assembly would call on developing countries, with the support of the international community, to establish information, communication and electronic community centres to provide connectivity and access to information and knowledge. It would also call on the developed countries and the United Nations system to increase support to programmes and activities of developing countries for human resources development and capacity-building, particularly those geared towards harnessing information and communication technologies.

The Assembly would urge increased investments in all aspects of human development, such as education and training, health and nutrition, to achieve universal coverage and the well-being of all. It would also urge the adoption of comprehensive approaches to human-resources development which combine, among other factors, economic growth, provision of basic social services, poverty eradication, sustainable livelihoods, empowerment of women, involvement of youth and addressing the needs of vulnerable groups of society.

Further, the Assembly would invite international organizations, including international financial institutions, to continue to give priority to supporting the objectives of human-resources development and to integrating them into their policies, programmes and operations. In addition, it would request the Secretary- General to include in his reports to the Assembly at its fifty-sixth session an assessment of the effectiveness of the contribution made by the United Nations system to advance human resources development in developing countries through its operational activities, and to make proposals to further enhance its impact.

Also before the Committee was a text on renewal of the dialogue on strengthening international economic cooperation for development through partnership, sponsored by Guyana, on behalf of the Group of 77 developing countries and China. By the terms of the draft, the Assembly would decide that the theme of the second high-level dialogue on strengthening international economic cooperation for development through partnership will be “Responding to the challenges of globalization: facilitating the integration of developing countries into the world economy in the twenty-first century”. It would also decide, without changing the biennial nature of the high-level dialogue, to defer the holding of the second two- day high-level dialogue to its fifty-sixth session.

The Assembly would request the President of the General Assembly to begin consultations with Member States so as to arrive at an early decision on the date, modalities, nature of the outcome and focus of the discussions of the second high- level dialogue, taking into account past experience and the contributions to be provided by Member States as well as regional institutions and the United Nations system. It would request the Secretary-General, in close cooperation with Governments, all relevant parts of the United Nations system, relevant organizations and other development agencies, to make initial preparations for the dialogue, while also taking into account the results of major United Nations conferences and summits.

Introduction of draft resolutions

GEORGE WILFRED TALBOT (Guyana), on behalf of the Group of 77 developing countries and China, introduced the draft resolution on developing human resources for development (document A/C.2/54/L.10). He said the text had a distinct bias towards human-resource development in developing counties and towards developing information and communication technology.

Still speaking on behalf of the Group of 77 developing countries and China, he then introduced the draft resolution on renewal of the dialogue on strengthening international economic cooperation for development through partnership (document A/C.2/54/L.9).

Statements

LIBRAN N. CABACTULAN (Philippines) said -- paraphrasing Tony A. Freyer of the University of Alabama -- that lower macroeconomic trade barriers and a more internationalized business order resulted in increased anti-competitive conduct by private companies operating across national borders. Because the overriding objective was to derive profits in their operations as a whole, there was a great tendency to effect the so-called "arms-length" transaction, where prices were manipulated among and between related buyers and sellers, or to effect a collusion for an artificial price. That state of affairs underscored the urgent need to assist developing countries in improving their national capacities to manage globalization rather than suffer its adverse effects.

Recognizing the need for trade measures to meet balance of payments crises, the World Trade Organization (WTO) included provisions temporarily exempting the contracting parties from their obligations when a balance-of-payments-related need could be demonstrated. The contracting parties were required to seek approval of the International Monetary Fund (IMF) to implement import restrictions for balance of payments purposes. That would be fine for developed countries, since balance of payments problems requiring action in the General Agreement on Tariffs and Trade (GATT) and IMF appeared to be the monopoly of the developing nations.

Those illustrations contributed modestly to the argument that the international community needed practical action to reach agreement on the “rules of the game” and to build institutional oversight capacity, whether in trade, finance, technology, migration or transnational crime-fighting. The United Nations was the pre-eminent body to launch the discussion on setting those rules, norms and standards, and to build consensus around the institutional arrangements needed for applying them.

JOSTEIN LEIRO (Norway) pointed to the inherent ambiguity of globalization and liberalization. They were expected to lead to increased economic opportunities for developing countries, yet a large number of those countries remained marginalized and unable to share in the benefits of the global economy. The assumption that globalization was a process that benefited everyone had yet to be proven. The gap between those living in affluence and those suffering the hardship of poverty was growing, both within nations and between them. To many, the process of globalization had led to reduced cultural variation and increased economic inequality, instead of increased cultural variation and reduced economic inequality. To overcome those threats, some people were prescribing a recipe of protectionism and isolation. “But is this really the alternative in a world where ideas and financial transactions circumvent national boundaries in seconds?”

Norway believed that better management of the forces of globalization, at both the national and international levels, was the only way to proceed if the positive effects of an integrated world were to be maximized and its negative aspects minimized. At the national level, there must be investment in both human resources and physical infrastructure, and good governance, democracy and human rights must be promoted. Also, resources did not by any means flow automatically to meet common needs, nor to care for the most vulnerable groups in society. Vigorous government policies were therefore called for to ensure that resource allocations met the demands of people for whom governments were responsible. The prospects for the next century depended, above all, on the willingness and ability to make the necessary long-term social investments, particularly in health and education, and on the capacity to distribute the benefits of globalization in a more equitable manner.

RICHARD LEETE, Senior Technical Officer, Technical and Policy Division, United Nations Population Fund (UNFPA), said that private investment had frequently been aimed at a minority of developing countries, while the proper financing of the social sectors had tended to be neglected. The financial turmoil in East Asia over the past two years had slowed or reversed the impressive development gains made during previous decades. The scale and magnitude of the crisis and its impact on the well-being of millions of people was increasingly apparent.

The crisis in Indonesia, Malaysia, Philippines and Thailand had led to significantly increased school dropouts, sharply increased levels of unemployment and underemployment -- in some areas suffered disproportionately by women -- dramatic increases in poverty, and increased pressures on women to enter commercial sex to support families. The crisis had also led to severe budgetary constraints, which had reduced availability of reproductive health services and a rise in unwanted pregnancies and unsafe abortions. Other population and health areas had been affected by the forces of globalization -- such as migration and population movements, the environment, reproductive health and the spread of HIV/AIDS.

Macroeconomic policies needed to be carefully blended with social policies and protective measures to ensure that the needs of the poorest and most disadvantaged were not neglected by global market forces. The UNFPA, as the lead agency in the implementation of the International Conference on Population and Development (ICPD) Programme of Action, continued to advocate and work with countries to build capacity and widen choices, focusing most on the poorest countries and the poorest communities within them. However, the translation from commitment to ICPD goals to commensurate levels of donor funding had not materialized, and there was an urgent need for donor countries to meet the need for external resources.

MIRTHA MARIA HORMILLA CASTRO (Cuba) said that although globalization was an irreversible reality, it was also true that its promised rewards had not materialized. There was an increase in extremes of social inequity at all levels. Growth in developing countries in the nineties was lower than the 5.7 per cent of the 1970s. One fifth of the world's population, living in wealthy countries, accounted for 86 per cent of global production. Within such a complex context, understanding globalization was of vital significance for developing countries. Why was the result so different from what had been promised? Globalization could not be a dogma, nor could it be seen as a divine scheme. And it entailed the great risk of manipulation by capricious and irrational forces.

Although new times brought with them the need for better coordination, it was also true that prevailing norms -- in trade, for example -- were still designed by industrialized countries. In the financial area, the Bretton Woods institutions were in the hands of the industrialized countries. Developing countries still had no say in the framework of architectural reform. The recently created Forum for Financial Stabilization, for instance, and the Group of 20 were clear examples of that exclusion. The vision and criteria of developing countries must be taken into account, so that they could be represented in the global decision-making machinery. There, the United Nations had a very important role to play. “The riches of humanity lie in diversity, and we have to learn to live with it and to respect it”, she said.

SHEN GUOFANG (China) said that global governance needed a global perspective, not a Western one. Globalization so far had advanced on the basis of a market economy, and had been driven by profits. It was inequitable by its very nature. Global inequality should be redressed through effective global governance, instead of being allowed to go unchecked. The world macroeconomic policy and the rules of the game directly affected developing countries’ growth and development. However, those policies and rules were basically laid down by developed countries regardless of the concerns of developing countries. That state of affairs must not be allowed to continue. When macroeconomic policies and rules were being formulated, there must be full participation by the majority of countries. Their views must be heeded and their interests given due consideration. A programme that would bring real benefit to developing countries could only be worked out in light of their actual conditions, instead of being decided by a small number of countries and then imposed on the rest.

Globalization also raised the question of whether the future world would be a uniform or diversified one, he said. A uniform world was not only out of the question, but also in contravention of objective principles. Only parallel development of diversification, and globalization could bring out the diversity and democratic spirit of the world. He hoped that global governance would fully embody fairness, equality, democracy and diversification and promote common prosperity and development throughout the world. To promote a healthier and more balanced development of globalization, the United Nations should keep globalization’s impact on developing countries under constant monitoring, come up with policies and measures in response to that impact and appraise the effectiveness of those policies and measures.

ALEXANDRU NICULESCU (Romania) said that in the era of globalization, multilateral cooperation was a must. The question was whether to maintain a laissez-faire approach to globalization or to intervene in the process. The world community’s reaction to the recent financial crisis had demonstrated that cooperation and partnership were vital in solving the challenges of globalization. One of the main challenges of the process was to ensure that its benefits were available to all. Market forces alone could not accomplish the goal of globalization with a human face. There was a common responsibility to cushion the social impact of the negative effects globalization might inflict on the weakest.

Yet many transnational processes generated by market-and technology-driven globalization could not be checked solely by domestic policies. Concerted and urgent action on a global scale was needed. He should involve governments, with the cooperation of the private sector, civil society and multilateral institutions, in a spirit of genuine solidarity and shared responsibility. Such action should be based on a broad and long-term understanding of economic and social interests of all partners, and designed to help countries in danger of being marginalized, countries in needed of international assistance and a more supportive global environment. In addition, the Economic and Social Council should be encouraged to deepen its dialogue with the Bretton Woods institutions and the WTO, to develop integrated policy responses and a set of mutually reinforcing actions to address globalization.

FRANKLYN LISK, of the International Labour Organization (ILO), said that in responding to the employment challenge of globalization and interdependence, one critical issue had to be addressed -- how to deal with an employment problem complicated by the impact of globalization in both industrialized and developing countries, bearing in mind the need for all countries to remain competitive in an increasingly open world economy? Recent experience had shown that, with spreading globalization, economic and financial crisis in one set of countries could threaten the stability of the world economy and lead to a lowering of growth rates worldwide, with severe consequences for employment and income distribution. Thus, there was a strong common interest for all countries to act together, and in collaboration with relevant bodies of the United Nations system, including the international financial and trade institutions, to reduce the risk of instability and to revive growth and promote social equity.

The ILO advocated a strong emphasis on labour and social policies, he said. Weaknesses in labour policies and institutions were obstacles to the realization of benefits from globalization; they represented serious deficiencies in the capacity of developing countries and transition economies to deal with the fallout from financial and economic crises. The ILO had emphasized the need for assistance to governments and their social partners to build wider and stronger social safety nets. The recent financial crises had highlighted the dire consequences of the absence of adequate social safety nets. Bereft of any form of socially provided relief, millions of workers who abruptly lost their jobs as a result of the impact of globalization had fallen into poverty. There was an urgent need to develop and strengthen labour market institutions and permanent mechanisms for social protection, so as to enhance national capacities to generate productive employment opportunities and to protect the welfare of all workers. Those measures must be accompanied by a move towards substantive universal implementation of core labour standards.

JUAN LARRAIN (Chile) said that globalization had produced a transformation of major consequence in everyone’s lives, especially in international relations. Globalization was perceived as a key factor in contemporary life, and the general context in which international relations was considered today. But it must not be forgotten that globalization was a decisive factor in other areas besides economics. The world was now permanently interconnected. The constant transmission of ideas across borders posed risks in addition to benefits, such as the transmission of diseases and the spread of crime. Among globalization’s effects was its impact on the contemporary world economy, with the private sector as the main player and deregulation, privatization and trade liberalization as its main characteristics. Opening up the national economy was nothing new for Chile, for whom trade was crucial to ensure capital flows.

The recent financial crises had warned the international community of the risks of globalization, particularly the vulnerabilities of developing countries, he said. They also pointed to the inherent weaknesses in the system, and the need to adapt economic structures to the changes taking place. To achieve international financial integration, important reform of international financial structures was necessary. Changes were also needed on the national level, which was where the greatest efforts should be made. It was important to preserve national autonomy in determining what should be done with respect to individual countries. Promoting free trade had been one of the basic pillars of the international economic system in recent years. Despite the system’s shortcomings, it had worked to the benefit of all. Some had feared that unemployment would grow if countries were not allowed to protect their industries from outside competition. Others wanted preferential treatment and concessions. Those challenges must be addressed at the upcoming WTO ministerial meeting in Seattle.

ADAM ADAWA (Kenya), speaking on behalf of the members of the East African Community (EAC) of Kenya, United Republic of Tanzania and Uganda, said that globalization and interdependence could be uneven and unpredictable. There was a clear need to ensure that the benefits of globalization and information were shared equitably among nations and their peoples. The United Nations was fully mandated to play a central role in facilitating and achieving international consensus on the globalization issue. The thrust of such a consensus would be to enhance multilateral cooperation for development through genuine partnership, aimed at promoting and strengthening responses to the diverse development needs of developing countries.

A genuine partnership at the bilateral and multilateral level could play an important role in the success of the development process of developing countries, especially sub-Saharan countries. It was imperative that reliable financial resources be made available through realistic and genuine debt relief, including conversion into grants of any remaining official bilateral and multilateral debt. The three EAC countries attached great importance to economic cooperation among developing countries. For that reason, they had actively pursued the path of economic cooperation and integration at the regional and subregional levels. Their aim was to establish an East African Community as one investment destination, one tourist destination, one single market and one common external tariff, with a free flow of goods, services and people.

ALFONSO VALDIVIESO (Colombia) said that his country was a transition economy which had benefited from globalization. Colombia strove for a strong private sector, a decentralized state and increasing participation by civil society. Internal conflict, however, had depleted the pool of financial and human resources that were needed for economic growth. Illegal money from drug dealers had caused huge distortions, not only of economic data but also of social indicators. Because of the economic crises around the world, the country had had to make strong structural adjustments, at a high cost to the vulnerable segments of the population.

The countries which had led the economic process had been able to do so because they had strong markets, stable financial systems, adequate technology and telecommunications and the resultant capacity to stabilize unstable capital flows. They must therefore assume their responsibility to collaborate with countries that did not possess those economic advantages. Globalization and interdependence challenged certain aspects of state sovereignty. Those issues had to be discussed in an open, democratic and transparent atmosphere. That was one reason for a new and reformed global economic architecture which took into account the interests of developed and developing countries, and which represented global public goods with global benefits. The role that the United Nations played as universal forum was essential in that new scenario.

ABDULLA AL-MONTASSER (Yemen) said that the failure of the philosophy of a centralized economy had resulted in recourse to a free-market philosophy. Advances in science and technology had broken down barriers between all states. In the United Nations examination of globalization, the dialogue between the Bretton Woods institutions and the Economic and Social Council was a step in the right direction. Globalization represented at once both an opportunity and a challenge. Countries should have an open mind to globalization and seek ways of helping developing countries, particularly least developed countries (LDCs), to integrate themselves into the world economy. International cooperation must focus on improving the performance of production and market institutions and improving financial structures. Yemen, the World Bank and the IMF were cooperating to create financial administrative programmes in accordance with international standards. Globalization would create big opportunities for growth, provided that countries could create a conducive environment for the absorption of foreign direct investment.

OM PRADHAN (Bhutan) said that when it considered present-day globalization, the international community was dealing with the beginnings of a turbocharged historical process that went beyond the sphere of social and economic development. One of the main characteristics of globalization was the expansion of the activities of transnational or multinational corporations in trade and investment throughout most of the world. Their global influence was nothing short of formidable. The primary objective of multinationals was to make profits for their shareholders. Despite that, their investments and technology transfers benefited many developing countries by creating local employment and enhancing trade and fiscal benefits for the host countries. However, many developing countries had serious trouble protecting their societies from the disruptions that came with globalization.

What urgently needed to be addressed was the abject poverty prevailing in developing countries, he said. What was called for was nothing less than a missionary zeal in international cooperation. However, that zeal must go hand in hand with concern for the maintenance and sustenance of cultures that had played such a crucial role in the lives of peoples across the globe for centuries. After all, the benefits of globalization to developed countries and multinational companies were enormous. They would be even greater if the developing countries cooperated in the process as something that was in the common good, something that was beneficial to all. Globalization should be a multilane highway, benefiting all parties and stakeholders.

AQEEL BA’OMAR (Oman) said that the world had seen the consequences of globalization, which included the breakdown of economic barriers between countries. The recent financial crises had demonstrated the capacity of certain countries and regions to weather economic storms. Globalization was often perceived as an opportunity for growth, particularly increased trade. At the same time, the economies of developing countries had suffered many adverse effects and were now on the brink of marginalization. Countries must be helped to adapt their economies to change. Among the best ways to do that was for developed countries to increase their official development assistance (ODA) and help developing countries integrate themselves into the new economic order. In addition, he continued, the role of the United Nations in mobilizing international consensus on how best to deal with the new world order must not be neglected. He appealed to the international community to find new ways to address those issues, based on growth, stability, equity, justice and the integration of all countries into the world economy. The next round of multilateral trade negotiations must likewise be based on equity, and must focus on strengthening the competitive capacities of developing countries. Markets needed to be liberalized, but liberalization should not be a tool for ruining the economies of developing countries.

GRANT ROBERTSON (New Zealand) said the ramifications of globalization were being keenly felt everywhere. The interdependency of the contemporary world came as no surprise to those experiencing the effects of financial developments, climate change and the rapid growth of information technology. Those phenomena were not fenced in by national boundaries, nor should the response to the challenges they posed be insular. If developing countries were to be enabled to enjoy the benefits of globalization to the fullest, and harness those benefits to achieve their developmental goals, they needed the assistance of the United Nations and of donor countries. They also had to be able to benefit from the advantages of more open markets.

In an increasingly interdependent world, it was as important for developed as for developing countries that all nations benefit from globalization. That was not a North-South issue, but one of prime significance for everybody. It was, therefore, important that appropriate provisions should continue to be made in international trading arrangements, taking account of the special circumstances of developing countries, particularly the least developed, smallest and most vulnerable states.

GUSTAVO AINCHIL (Argentina) said that globalization, with its fast communication and widening of boundaries, had created a new economic behaviour, that of “global conduct”. The question was whether governments had established a global conduct or simply stuck to their old behaviour, designed for a different context. In the long term, globalization provided rewards and penalties. The origin and dynamic of the recent financial crises illustrated the important role played by capital movements. There was little transparency. Countries receiving investment had to maintain consistent economic policies and a stable banking system, including the development of futures markets, in order to avoid the consequences of strong variations in exchange rates.

Capital flows should serve as tools for direct investment, he said. In the short term, a number of countries had been exposed to irrational expectations by investors. The conduct of investors had been described sometimes as panicky, sometimes as euphoric. The international community should develop early warning systems to prevent the potential risk of contagion. All the actors involved in the globalization scenario had to assume responsibility for designing a scheme to prevent crises for working to create the conditions for a free flow of capital. The negative impact of globalization was not inherently uncontrollable, provided that contingency mechanisms had been designed.

PATRICK ALBERT LEWIS (Antigua and Barbuda), speaking on behalf of the Alliance of Small Island States (AOSIS), said that as small and isolated countries, islands relied more than most on international trade. Their limited land mass and resources required that they import virtually everything, from energy to health supplies to machinery. That reliance on the outside world drove up the cost of living and doing business for island communities, and made it very difficult for them to compete against lower-cost agricultural producers in other countries.

It was clear that globalization led to a reduction of the sovereignty of states, with the weakest and the smallest being the biggest losers. Sadly lacking in the arguments for globalization was the need to provide for the pace, direction and content of liberalization, given diverse national levels of development and the need to build up national capabilities. Most pernicious of all was the insistence on free trade for the developing world and exemption from free trade for the industrialized countries. Protective devices were built-in for farmers in dominant economies. They included subsidies, guaranteed markets and payments for limiting production in order to maintain price levels.

On the other hand, when former colonial countries granted preferential terms to their former colonies of exploitation, challenges were mounted through the WTO by multinational enterprises. There was no more blatant example than Chiquita’s assault on Caribbean banana producers. The sad thing was that everyone knew full well that there had never been such a thing as free trade in modern times. Yet, irrespective of the fallacy of the free-trade argument, recipients of benefits under the Lome Convention were literally being told that they (but not the dominant powers) must conform to and operate under the fallacy.

FELIX MBAYU (Cameroon) said that the increasingly complex interactions between people and economies across boundaries made it imperative for institutions like the United Nations to enhance understanding of globalization. Despite the universal nature of the Organization, certain aspects of globalization did not fall under its scope. It was important to explore how the United Nations could promote global governance without being a global government. National efforts to meet the challenges of globalization must be matched at the global level. While the Secretary-General’s report indicated that there was considerable consensus on those issues, he would have liked the report to go further and offer concrete proposals. The present world economic system only benefited rich countries. While many had articulated the merits of the free market, not enough had been done to increase access of developing countries to world markets.

Moreover, most international arrangements in the technology sector had put advanced technology out of the reach of developing countries. He wanted to know what concrete actions were being taken to address such glaring imbalances in the system. While recognizing the importance of technology, Cameroon believed that most developing countries had more important issues to address, such as basic education and health. The priorities for those countries were issues such as debt relief, poverty eradication and the improvement of living standards. The caravan of globalization did not have a driver at this time. That could not continue, he said.

GORAN STEVCEVSKI (The former Yugoslav Republic of Macedonia) said that the United Nations had to be given a central role in promoting international cooperation for development, and providing guidance on global development issues in the context of globalization and interdependence. Forms and means of shared responsibility and real partnership had to be institutionalized. There must be coherent policy-making on the global, regional, subregional and national levels. Genuine multilateralism as well as regional cooperation must be fostered.

Macedonia, a land-locked country with an economy in transition, remained particularly vulnerable. That was largely due to the imposition of international sanctions against the Federal Republic of Yugoslavia and the Kosovo crisis. It was important for the international community to rise to the occasion, live up to its promises and assist the process of rehabilitation of the region.

Efforts to develop an effective approach to the management of globalization must be redoubled, he said. It was essential to deepen the dialogue with the Bretton Woods institutions and the WTO, but also with the private sector and civil- society structures, if a real partnership in managing the process was not to be achieved. On the country level, United Nations operational activities for development should focus more closely on enhancing national capacities to manage the negative implications of globalization. At the same time, special attention should be given to the social costs of structural-adjustment programmes and economic reform.

ZBIGNIEW MATUSZEWSKI (Poland) said that no effort should be spared to keep up the beneficial tendency towards free-market economies and liberalization. The significant gains registered by the global economy in this century had come about precisely as a result of globalization and more open markets. But there was obviously an urgent need for much better regulation and supervision of the international financial system, based on common sets of norms and standards. Globalization was often accompanied by economic pressures and social tensions. Globalization could also have a potentially negative impact on particular sectors of national economies. Social safety nets should be developed at the same time as measures to restimulate global growth were being considered. With its universal membership, the United Nations was an ideal place to address the issues.

There was a need for a range of measures to cope with global challenges such as international cooperation and partnership to reform the international financial architecture, including early warning systems. The international community must go on seeking ways to prevent the neutralization of reform benefits by the debt- servicing burden, and to ensure access to financial markets for the Heavily Indebted Poor Countries (HIPCs). Several years ago, Poland had benefited from substantial debt relief, which had gone a long way towards putting its economy on the right track.

IVAN NIMAC (Croatia) said that globalization, while it was not all good nor all bad, seemed unavoidable. Any calculation of the costs and benefits of globalization should err on the side of caution. The efforts of rich to get richer quicker weighed less heavily than the goals of reducing poverty and reversing the trend towards marginalization of the poorest.

The question to be answered was how far globalization could be managed, if at all. “Should this process of management be sectoral”? he asked. “Should it be built more broadly around such concepts as governance and markets, or should it be multidisciplinary?” Of all the multilateral institutions, the United Nations was the one with the institutional capacity for such an exercise in management. The evidence suggested that the process would be market-exchange, and information- driven. However, significantly less had been said of its effects on the social and environmental aspects of sustainable development. The close link of the social aspects of development to non-financial elements, such as trade and the environment, deserved a higher place in the debate. The fact that globalization was market- and technology-driven led to the consideration of issues of global economic governance, policy coherence and institutional capacity-building.

WALID A. AL-HADID (Jordan) said that although the expression “globalization” was widespread today, a definition of that term had not been reached. Many economists said that this was a technological globalization, driven by market forces and extended to all aspects of life. It was mostly developed states that had benefited from globalization. For developing countries there was a structural problem caused by the instability of in short-term capital markets, where astronomical sums were traded, daily far in excess of world production. The danger there was that capital markets had a great influence on the “real” markets of production. The recent Asian financial crisis was the best example of that.

The difference between the real market and the financial one was important, he said. Liberalization was necessary for the real market. But for the financial market, liberalization had to be introduced gradually and carefully. Developing countries must create a civil-society network in order to protect that society against the negative effect of globalization. International assistance could take different forms. The downward trend in ODA had to be reversed. Debt relief and open markets could help as well. Developing countries needed access to credit on favourable terms, in order to make up for low levels of national savings. In the area of international cooperation, mechanisms must be established to meet the crises fomented by financial instabilities. He stressed the potential role of the United Nations as a democratic and representative universal body in the search for solutions to those global economic problems.

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For information media. Not an official record.