SECOND COMMITTEE BEGINS DEBATE ON WORLD ECONOMIC SITUATION

14 October 1996

Press Release
GA/EF/2721

SECOND COMMITTEE BEGINS DEBATE ON WORLD ECONOMIC SITUATION

19961014 Stagnation in Development Often Leads to Conflict, Says Minister for Development Cooperation of Netherlands

There should be a single United Nations agency dealing with humanitarian aspects of post-conflict assistance and a greatly reduced number of agencies involved in development, the Second Committee (Economic and Financial) was told this afternoon, as it began its general debate on the world economic situation.

The Minister for Development Cooperation of the Netherlands, Jan Pronk, said the United Nations should strengthen its capacity for coherent and integrated conflict prevention. In addition, it should recognize that stagnation in development often led to conflict. He stressed that development should not be delayed for want of a safer climate.

The need for reviewing the roles and mandates of United Nations bodies involved in development was highlighted by the representative of Ireland, speaking on behalf of the European Union and associated States. He said the United Nations was uniquely placed to foster progress towards international sustainable development and the Committee should address the question as to how the Organization could better address tasks in the economic, social and related fields.

The representative of the United States also stressed the need for reform and revitalization in the United Nations, and said his country supported the proposals made at the Summit meeting of the "Group of Seven" most industrialized countries in Lyon for merging the three Secretariat departments responsible for development under the authority of a single Under- Secretary-General.

The representative of Costa Rica, speaking on behalf of the "Group of 77" developing countries and China, said the old practices of protectionism and neo-protectionism should give way to open trade. He stressed that problems of development could not be boiled down to the economic variable and called for an expansion of official development assistance (ODA).

In an introductory statement to the Committee, the Under-Secretary- General for Policy Coordination and Sustainable Development, Nitin Desai, said

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the various United Nations conferences, from the 1990 World Summit for Children to the second United Nations Conference on Human Settlements (Habitat II) (Istanbul, June 1996), had dealt with issues not covered by market- oriented policies. The conferences had sought to identify a role for public policy at the national and international levels and had stressed an integrated approach to development. The implementation of various conference decisions would require further elaboration, including clarification of the role of intergovernmental processes, he said.

Also this afternoon, the Committee elected Kheireddine Ramoul (Algeria) as Vice-Chairman, thus completing its bureau for the current session. It also approved a revised programme of work.

Statements were also made by the representatives of China, Jordan, Algeria, Egypt, Bolivia, Brazil and Bangladesh.

The Committee will meet again at 3 p.m. tomorrow, 15 October, to continue its general debate.

Committee Work Programme

The Second Committee (Economic and Financial) met this afternoon to begin its general debate on the world economic situation.

Statements Made

NITIN DESAI, Under-Secretary-General for Policy Coordination and Sustainable Development, in an introductory statement, congratulated the Committee for including panel discussions and keynote speakers in its programme of work. He also thanked the Government of the Netherlands and the United Nations University for their support of those informal discussions. He said that over the last few years there had been an emphasis on the integration of economic, social and environment issues in defining development. He also referred to the international conferences and how they had helped define shared ideas and values. The various United Nations conferences starting from the World Summit for Children and until Habitat II had the characteristics of trying to deal with issues not satisfactorily covered by market-oriented policies alone. One unifying theme of those conferences was that they dealt with areas which market-oriented reform had not been able to deal with directly, and had defined a role for public policy at the national and international levels. An integrated approach to development had been stressed in all the conferences. The policy development process had provided a degree of credibility in the eyes of policy makers, outside business leaders, trade unions and non-governmental organizations.

The implementation phase of the various decisions was a challenge to the Committee, and to the Secretariat. There were other areas that required elaboration, including the dimension of the role of intergovernmental processes in ensuring implementation of the decisions taken at the conferences and in various other forums of the United Nations. He hoped the Committee would be innovative during the five-year review of the Agenda 21 established during the United Nations Conference on Environment and Development (UNCED) in Rio de Janeiro. He also drew attention to work being done on the Agenda for Development. The major task ahead was to ensure that there was greater concordance between the normative side of the work of the United Nations and the operational activities for development of the United Nations system.

FERNANDO BERROCAL SOTO (Costa Rica), speaking on behalf of the Group of 77 developing countries and China, said the topic of social and economic development was a key one and should not lose its position on the international agenda and the agenda of the United Nations. "On this issue our position is unalterable", he said.

It was important to address questions relating to an Agenda for Development, he said. Also, the issue of reform and United Nations finances needed to be dealt with. Only by doing so would the United Nations be able to

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march resolutely into the twenty-first century. The "Group of 77" believed that the report on the Agenda for Development should be sent to regional groups. It also reiterated its position on the need to expand Official Development Assistance (ODA). The developed countries had not met their ODA commitment of 0.7 per cent of gross national product (GNP). Without international cooperation, development -- particularly for the least developed countries -- would not be possible. Many of those countries had been hit hard by globalization and liberalization. In that context, the "Group of 77" supported the Special Initiative for Africa.

He appealed for international solidarity behind the initiative and stressed that globalization was a challenge to both the developed and developing countries. It was an intense and aggressive reality of the times and no country was immune to it. He emphasized that the action programmes of various United Nations conferences should be implemented. In addition, he highlighted the importance of strengthening south-south cooperation, but added that it could not be seen as a substitute for that between the north and the south. To encourage such cooperation, Costa Rica had convened a south-south conference on trade, investment and finance in January 1997.

He expressed satisfaction with the agreements adopted at the United Nations Conference on Trade and Development (UNCTAD) IX, and with reform in the United Nations Industrial Development Organization (UNIDO). Both had survived attacks, he went on, and had rejuvenated themselves and had lent their support to developing countries. In addition, he called for full implementation of the Uruguay Round. He hoped that differences between developed and developing countries would be surmounted and the old practices of protectionism and neo-protectionism would give way to open trade. He stressed that problems of development could not be boiled down to the economic variable.

CONOR MURPHY (Ireland), speaking for the European Union, as well as Bulgaria, Cyprus, Czech Republic, Estonia, Hungary, Latvia, Malta, Poland, Romania, Slovakia and Iceland, said the last year had seen the continuation of economic growth in all regions of the world. However, growth in developing countries had remained unevenly distributed, particularly in Africa. Some countries had faced an overall decline in economic growth, while others had an uneven economic distribution of the fruits of economic growth. More than a billion persons had continued to live in abject poverty.

The European Union, which was committed to a multilateral approach to global problems, believed that the United Nations was uniquely placed to foster progress towards international sustainable development, he said. The Second Committee should address the question as to how the Organization could better address tasks in the economic, social and related fields. The Union believed there was an urgent need to review the roles and mandates of the United Nations bodies involved in development. In addition, there should be

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continuing efforts to improve cooperation between United Nations agencies, the international financial institutions and the World Trade Organization.

The European Union had been giving further consideration on how to take the reform process forward, he said. It attached particular importance to the eradication of poverty. It was pleased to note the renewed policy commitment by United Nations operational organizations to poverty eradication. The Union was also pleased to note progress in the implementation of the conventions dealing with desertification, climate change and biodiversity. However, it was concerned with the slow progress being made in negotiations dealing with an Agenda for Development. He stressed that the recommendations of the review of the United Nations New Agenda for Development in Africa in the 1990s, particularly those related to the Special Initiative for Africa, should be implemented.

JAN PRONK, Minister for Development Cooperation of the Netherlands, said the timeliness and effectiveness of United Nations performance in conflict situations could be enhanced if only a limited number of forums were involved. That applied both to the agencies active in the area of humanitarian assistance as well as to the development organizations within the United Nations. He said there should be only one single United Nations agency dealing with humanitarian aspects of post-conflict assistance and a greatly reduced number of agencies involved in development. Ideally, in the United Nations there should be only one agency active in a certain area.

Stagnation in development meant conflict, he said. Globalization was good for those who already had access to the market and to modern society. The same globalization, however, led to more neglect, more marginalization, increasing poverty, more conflict, more failed States, more competition for resources and more violence. He said the challenge for development cooperation was twofold: not to delay development until it was safe; and not to delay cooperation until a stable partner was found. By strengthening its capacity for coherent and integrated conflict prevention, the United Nations system could regain the authority and credibility which the Organization badly needed.

He said there was a need for development programmes which could support community groups which themselves could be a voice for peace and reconciliation. Such a new form of development cooperation could contribute to the maintenance and strengthening of those links in conflict situations, by supporting the stabilizing role that indigenous actors within civil society could play.

WANG XUEXIAN (China) said the dynamics of capital and trade had provided unprecedented opportunities for economic development. In recent years some developing countries had achieved high speed growth. However, the developing countries which had registered rapid growth were only a minority and even

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those faced uneven and unsteady development. The gap between developing and developed countries had continued to widen. Some major developed countries had continued to practice protectionism and unilateralism in international trade and economic activities. He decried the growing tendency of attaching political conditionalities.

The United Nations institutions responsible for operational activities and development cooperation had been cut and weakened, he said. He stressed that a new and equitable global partnership should be based on equality. Moreover, a new and global partnership should place economic cooperation for development at the centre of its attention. In addition, such a partnership should take into account common but differentiated responsibilities. He called for democratization of international economic decision-making and said the United Nations should play an important role in the process.

FARIS AMMARIN (Jordan) said a north African economic summit had been held in his country to assess regional structures and policies essential for developing the region. Representatives of the business community from all over the world had attended the gathering; however, prospects for investment remained bleak. Jordan had been able to forge a peace treaty with Israel that represented a model for regional cooperation. The country had paid a heavy price when the Government applied harsh measures, as part of a structural adjustment programme set by the World Bank, lifting the subsidy of bread. There had been riots and strikes.

He said Jordan, with its limited resources, was facing difficulty in coping with the rapid current of changes in the world. Resources were being diverted to service debts. Peace and security were being translated into enhancement of international cooperation for growth and development, poverty eradication and environment preservation, all of which could not be attained without serious north-south cooperation. There should be a shift from dialogue to serious work and cooperation. The debt issue and that of the flow of capital and investment remained crucial. There was need to establish a new world financial order where increased cooperation between the United Nations and the Bretton Woods institutions would lead to the creation of new and innovative methods in dealing with the foreign debt problem.

VICTOR MARRERO (United States) said that with the end of the cold war, the beginnings of a new global consensus based on democracy and market economies had emerged. The private sector had led the growth in many African countries and in economies in transition. One clear obstacle to growth had been the unsustainable levels of debt in some of the poorest countries. The Bretton Woods institutions and the Paris Club had reached agreement on a comprehensive approach to reducing the excess of debt of several of the poorest countries to sustainable levels. The United States strongly supported the programme of action for the heavily indebted countries.

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He stressed that the rapid and full implementation of UNCTAD IX was crucial to ensuring that the United Nations fulfilled its obligations to developing countries. Stating that capital flows to developing countries were expected to reach $200 billion this year, he stressed that good governance was crucial for sustainable development. One of the United States priorities this fall was the passage of a United Nations Declaration Against Corruption and Bribery, which would call on Member States to criminalize illicit practices in international business.

The United States placed the highest priority on the implementation of the Agenda 21, he said. But rather than having the Commission on Sustainable Development adhere to its original multi-year work programme of reviewing Agenda 21 in detail, it was of the view that the Commission could more usefully address the broad aspects of sustainable development. He stressed the need for reform and revitalization in the economic, social and related areas in the United Nations, and said his country supported the proposals endorsed at the Lyons Economic Summit for merging the three Secretariat departments responsible for development under the authority of a single Under- Secretary-General. That individual could also serve as Executive Secretary of the Economic and Social Council.

ABDALLAH BAALI (Algeria) said the trends towards globalization provided opportunities, but it also looked like marginalizing some countries such as the least developed, those of sub-Saharan Africa and the small island developing States. He said recent initiatives on debt relief announced by the Bretton Woods institutions were insufficient. Specific country actions were required to ease the debt burden. International trade relations should be stripped of imbalances and anachronisms. The forthcoming ministerial meeting of the World Trade Organization in Singapore should be the opportunity to reassess the Uruguay Round of international trade rules. Particular attention should be given to poor countries to guarantee them the benefits of globalization. The talks should not be used to perpetuate imbalances in trade.

Algeria believed that the forthcoming medium-term review of Agenda 21 established at UNCED provided opportunity for fulfilling commitments undertaken.

He also stressed the overriding need for the international community to give the Convention on Desertification the importance it merited. He hoped the World Food Summit in Rome next month would pay attention to food security for all. He said United Nations reform should not be perceived as an end in itself.

ABDUL ABDELLATIF (Egypt) said he believed a decisive stage in United Nations history had been reached for reflection on its role in addressing social and economic issues. There was a danger that some important issues

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such as development were being relegated to second place. There was doubt now about whether the Organization should focus attention more on maintenance of international peace and security. There was some undermining of the United Nations development efforts by the attachment of conditions to resources devoted to development.

He said there was need to strengthen the United Nations role in development. Development was vital for peace and security. There was need for cooperation as the world economy became increasingly interdependent. It was no longer possible to address economic issues solely at the national level. The United Nations should be provided with resources on a predictable basis to make it more efficient. Resources provided should be on a predictable basis. The Organization should be allowed to do its job in the economic and social fields. All Member States must meet their obligations to enable the Organization to do what was expected of it.

EDGAR CAMACHO OMISTE (Bolivia) said the United Nations was the best instrument available to the international community to tackle the problems facing it. According to recent World Bank reports, in the 1990s the richest 20 per cent of the global population received 60 times more of the monetary resources than the poorest 20 per cent. That highlighted the acuteness of the problem of poverty. In that connection, he expressed concern at the declining trends in certain sources of funding.

Since 1993 Bolivia had pursued State reform and social participation, he said. Democratic and participatory institutions had been bolstered, and attempts were being made to work in the framework of sustainable development. In addition, efforts were also being made to improve quality of life and bring about educational reform. Bolivia was pursuing many of those policies in conjunction with other countries of the Rio group.

CELSO L.N. AMORIM (Brazil), speaking for the member countries of MERCOSUL (Argentina, Brazil, Paraguay and Uruguay), said those countries were working to build free and democratic societies based on free market principles and to attain social justice. They had taken measures to combat corruption and to make more efficient use of public resources. Tariffs between their countries had been consolidated and they were working towards the creating of a single market. The group had signed trade and cooperation agreements with Chile, and a similar one would be reached with member countries of the Andean group.

To enhance south-south cooperation, he said, their group was building links with other similar bodies in the developing countries, such as the Southern African Development Community (SADC). The group, which regarded the Economic and Social Council as an important United Nations body, would do its utmost to ensure the successful conclusion of the Agenda for Development process. He said efforts to reform the United Nations should aim at

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strengthening its role. Nothing should be done to the detriment of analysis and debate within the Organization. Depriving the United Nations of the minimum means to do its job was not the best way to achieve reforms.

FAROOQ SOBHAN (Bangladesh) said the time limit for statements in the Committee's general debate should be further reduced, to 10 minutes. That would make the debate more focused. The resolutions adopted should be shorter and the preambular paragraphs should not be unnecessarily long.

Although growth in developed countries as a whole had remained strong, he said, the benefits of an upturned economy had not been evenly shared by all countries. In fact, the gap between the small and vulnerable countries and the rest of the world had widened. In many of the least developed countries fiscal deficits had led to a rise in interest rates and high rates of inflation. That had deterred private sector investment. Thus, declining flows of development assistance, limited market access and an unsustainable debt burden had made any projection of sustained recovery uncertain, even for the better performing of the least developed countries. He stressed that the longer the international community waited to dismantle trade barriers, the more would any meaningful social benefit for those countries be delayed.

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