DECISION-MAKING PROCESS OF GLOBAL FINANCIAL INSTITUTIONS SHOULD BE UPDATED, SECOND COMMITTEE IS TOLD
Press Release
GA/EF/2722
DECISION-MAKING PROCESS OF GLOBAL FINANCIAL INSTITUTIONS SHOULD BE UPDATED, SECOND COMMITTEE IS TOLD
19961015 Mexico Highlights Value of Quick Response to Emergency Situations; Others Stress Need to Bolster Developing EconomiesThe structure for assessment and decision-making in the International Monetary Fund (IMF) and other international financial institutions should be updated to better represent the current state of the world's economy, the representative of Mexico told the Second Committee (Economic and Financial) this afternoon, as it continued its general debate on the world economic situation.
The so-called "Mexico crisis" had highlighted the need for quick response by the international financial system to emergency financial situations, he said. He stressed that growing globalization demanded cooperation in meeting common challenges.
The representative of Sweden emphasized that the United Nations was needed to combat the economic and social causes of conflicts as part of a comprehensive strategy to prevent war. Sound security policies must be based on the understanding that there would be no security in the north until the peoples of the south had a decent life, he said.
African development was one of the most pressing issues of the international agenda in the post-cold-war period, the representative of Japan said. The upcoming Tokyo International Conference on African Development would be predicated on the belief that an economic take-off in Africa would enhance the well-being of its peoples and that the integration of African economies into the international system would benefit the rest of the world, he said.
The representative of Ghana said that while it was true that investment followed suitable infrastructure, that could be created only in a supportive international environment. Development cooperation should be viewed as a moral imperative. The representative of Uganda said there was need for an effective and legally binding international code of conduct to regulate the activities of transnational corporations.
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While the representative of Ukraine called for an increased coordination of activities in the field of international economic security to prevent economic coercion and discrimination, the representative of Iran said social and economic development was adversely affected by the promulgation and application of domestic laws whose extraterritorial impacts severely affected the sovereignty of other States.
Statements were also made by the representatives of the Russian Federation, Peru, Tunisia, Ecuador, Papua New Guinea, Lebanon and Oman.
The Committee will meet again at 3 p.m. tomorrow, 16 October, to continue its general debate.
Committee Work Programme
The Second Committee (Economic and Financial) met this afternoon to continue its general debate on the world economic situation.
Statements
YURIY BOHAYEVSKIY (Ukraine) said many countries faced serious problems of underdevelopment, impoverishment and environmental pollution. Progressive economic development constituted a solid foundation for peace-building and was the best guarantee of strengthening the security of a nation and its independence. A stronger and more effective United Nations system capable of overcoming all the negative trends in the interdependent world was needed. However, there was an opposite trend towards "a diminished willingness to engage the critical issues on the international agenda through the United Nations", as the Secretary-General had stated in his annual report on the work of the Organization.
Reform and restructuring of the United Nations system, especially its social and economic sectors, had not gone beyond cosmetic transformations, he said. Without any appropriate structural reorganization, the cuts of the budget and downsizing of the Secretariat would have only a negative impact on the Organization. He called for the establishment of a legal basis which would allow for an increase in the level of coordination of activities in the field of international economic security, in order to prevent economic coercion and discrimination. He stressed that larger allocation of resources by the United Nations agencies and Bretton Woods institutions for development would speed up social and economic transformation in both the countries with economies in transition and developing countries.
SERGEY V. LAVROV (Russian Federation) said that economic globalization offered vast opportunities for trade, investment and technology, while, at the same time, it posed risks for certain countries and regions. During 1995, nearly one third of international foreign direct investment had been channelled to developing countries, but 80 per cent of that investment went to only 12 countries. The gross domestic product (GDP) of the economies in transition would grow by some 2 per cent this year after five years of decline. But foreign direct investment in those States amounted to only $13 billion in 1995, and those countries still faced export barriers. The cumulative stock of foreign direct investment in Russia now stood at some $9 billion; an additional $3 billion was expected this year.
Russia looked forward to the upcoming 1997 General Assembly special session to review implementation of the United Nations Conference on the Environment and Development (UNCED). At that session, Russia would emphasize the principle of common, but differentiated, responsibilities, taking fully into account the financial and economic situation of individual States.
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Russia was willing to contribute to achieving consensus on a new partnership of States based on strengthening multilateral approaches in the economic, social and environmental areas.
GERARDO LOZANO (Mexico) said that the growing globalization of the international economy demanded cooperation in meeting common challenges. The so-called "Mexico crisis" made clear the need for the international financial system to respond more quickly to emergency situations. The structure for assessment and decision-making in the International Monetary Fund (IMF) and other bodies should be updated to better represent the current state of the world's economy. Mexico believed that the United Nations Conference on Trade and Development (UNCTAD) was an essential forum for the development of international agreements. The achievements of UNCTAD IX in South Africa would help developing countries to better take advantages of the opportunities offered by a more liberal international economy.
The Uruguay Round of the General Agreement on Tariffs and Trade (GATT) had not met all the expectations of the developing countries, he said. The upcoming ministerial conference of the World Trade Organization (WTO) would be an opportunity to take stock of the multilateral trading system and of the implementation of the essential elements of the Uruguay Round. That conference should identify additional measures required to implement those commitments, particularly with regard to the opening of markets and tariff relief. The future agenda of the WTO should concentrate on issues upon which consensus was possible, rather than scattering its efforts over various agendas. Mexico opposed the promulgation of laws which infringed upon the sovereignty of third States, particularly the Helms-Burton Bill in the United States, which ran counter to international law.
HISASHI OWADA (Japan) said the United Nations should adopt innovative approaches to development and then actively implement those strategies. The Organization should simultaneously carry out reforms in the economic and social fields. The international community should establish a common set of targets; developing countries should establish the plans for achieving those goals. The efforts to implement those plans should be complemented by assistance from developed countries, international organizations, the private sectors, and non-governmental organizations. Vigorous effort should be made to promote collaboration with the Bretton Woods institutions and with the Development Assistance Committee of the Organisation for Economic Cooperation and Development (OECD).
African development was one of the most pressing issues of the international agenda in the post-cold-war period, he said. The upcoming Tokyo International Conference on African Development would be predicated on the belief that the achievement of an economic take-off in Africa would enhance the well-being of the peoples of that continent, and also that the integration of African economies into the international system would benefit the rest of
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the world. As chairman of the mid-term review of the United Nations New Agenda for Development in Africa in the 1990s, Japan believed that the assessment in the review should be made on the basis of the concept of common responsibility of the international community as a whole for the development of Africa. Future progress should be promoted on as practical and specific a basis as possible.
MIGUEL BARRETO (Peru) said the phenomenon of globalization demanded that there be cooperation among different regions of the world. It was clear that in an increasingly globalized world, the role that industrialized countries played was important. He stressed the need for contributions targeted towards social and economic development, and he called for greater development ties between the United Nations, its agencies and the Bretton Woods institutions.
Despite consensus on the goal of poverty eradication, there were only meagre resources available for meeting that goal, he said. As Brazil, speaking on behalf of the member countries of MERCOSUL (Argentina, Brazil, Paraguay and Uruguay), had pointed out, specific commitment to development was required. The representative of the United States had noted that excessive debt levels faced by many of the least developed countries were stumbling blocks to development, and had stressed that a solution had to be found to that problem. While a number of delegations had expressed concern at the slow progress on the Agenda for Development, the actual problem was the low level of commitment to it.
MEHDI DANESH-YAZDI (Iran) said that, although the world economy was slowly accelerating, and global and long-term credit in bonds, bank loans and related facilities had risen almost one quarter in 1995 to $832 billion, developing countries accounted for only a small proportion of those resources. Many countries did not enjoy access to such funds as their capacity for additional debt-servicing precluded such borrowing. Moreover, increasing conditionalities, as well as political considerations, had aggravated the situation. Therefore, direct investment and official financial flows to developing countries were imperative.
He expressed concern that official development assistance (ODA) had continued to decline, and said it was important to understand that resources for development would contribute to international peace and security. Moreover, States must not resort to unilateral measures, including continued promulgation and application of domestic laws whose extraterritorial impacts severely affected the sovereignty of other States. Such practices had an adverse impact on the social and economic development of the targeted countries.
JACK WILMOT (Ghana) said that apparently encouraging statistics concealed disturbing economic and social realities. The per capita income recorded in most developing countries in 1995 and 1996 was actually less than
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what it was in 1980. Social indicators published in the UNDP's 1996 Human Development Report revealed that the number of people living in absolute poverty worldwide had continued to grow with 1.3 billion people surviving on less than a dollar a day. Moreover, 17 million people in the developing world continued to die from curable infections. Those deteriorating trends stemmed in part from diminishing international development cooperation.
He stressed that ODA was at its lowest in 20 years. In fact, it was only 0.27 per cent of the combined gross national product (GNP) of all the member countries of the development assistance committee of the OECD, as against the target of 0.7 per cent set at the United Nations in 1970. A new rationale for development cooperation was needed in the post-cold-war era, where it would be accepted as a moral imperative. There could be no lasting peace in the world without global development, just as there could be no sustainable development without peace. Seventy-five per cent of the foreign direct investment flows to developing countries last year had been directed to only 12 nations. It was often said that investment followed suitable infrastructure; however, such infrastructure could be created only in a supportive international environment.
SLAHEDDINE ABDELLAH (Tunisia) said his country welcomed the ongoing reform of the United Nations which should benefit all countries. He said the guidelines for action adopted by various United Nations conferences should help in the worldwide efforts to alleviate poverty. However, he said, shrinking ODA and reduced resources for such bodies as the United Nations Development Programme (UNDP) could affect efforts at poverty eradication. He referred to the September mid-term review of the United Nations agenda for Africa's development, and reiterated Tunisia's cooperation with a number of countries in sub-Saharan Africa. African States, he went on, were making judicious use of the little resources available to them to overcome the challenges they faced. It would be a delusion to think that African States could develop without their own concerted efforts and the support of the international community at large.
He said the forthcoming Singapore ministerial meeting of the WTO should strike the necessary balance between the interests of the major trading Powers and the developing countries. It should also review progress in the implementation of the Uruguay Round and the Marrakesh Agreements adopted at the UNCTAD conference in Morocco a few years ago. He hoped the meeting would help consolidate the international trading systems and reinvigorate rules governing international trade.
HAROLD ACEMAH (Uganda) said that, while the world economy had undergone major changes shaped by advances in information technology, mobility of capital and growth of international trade, the least developed countries had been increasingly marginalized. Their share of world trade had declined, and they had a negligible share of global flows of private capital. That had been
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accompanied by deterioration in their socio-economic condition. He stressed that integrating least developed countries in the global economy, alleviating global poverty and ensuring growth with equity and sustainable development were some of the major challenges of the time.
Developing countries recognized that they bore the primary responsibility for development, he said. They had accordingly implemented structural adjustment programmes. However, the implementation of those measures had exacted painful social costs arising from reduced expenditure on social development programmes. While the commitment to implement those policies had been crucial, equally important was a supportive international economic environment. He also stressed the need for an effective and legally binding international code of conduct to regulate activities and influence of transnational corporations. Their increasing role in trade in goods and services and in the flow of private capital necessitated such a code. In addition, he said industrialized countries should restructure their economies in order to accommodate goods and services where the developing countries had an advantage. Moreover, they should not use developing countries as dumping grounds for hazardous and toxic wastes.
MARJORIE ULLOA (Ecuador) said international trade was of strategic importance to her country. It had completed arrangements for joining the World Trade Organization. She said efforts should be made to ensure implementation of the decisions of the various United Nations conferences. She drew attention to population and gender issues, calling for a strategy to improve the social and economic well-being of all.
Ecuador was developing projects to improve gender balance, sound environment and sustainable development, and to provide affordable housing. It had participated in the recent United Nations Conference on Human Settlements (Habitat II) in Istanbul. She said one of the key successes of that Conference was the involvement of all sectors of society in its deliberations. She urged cooperation and commitment by all to ensure the development of their societies.
JAN ELIASSON (Sweden) said economic globalization had resulted in increased marginalization for both countries and groups of people. While some countries prospered, others were neglected; many least developed countries in Africa did not benefit fully from flows of trade, capital and investment. Gaps between rich and poor -- both between and within countries -- were widening. Poverty was a breeding ground for despair and constituted a threat to international peace and security. Sound security policies must be based on the understanding that there would be no security in the north until the peoples of the south had a decent life.
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The United Nations was the only organization that could tackle long-term global threats such as climate change. A concrete example of this was the recent United Nations Convention to Combat Desertification, the negotiation of which Sweden had been honoured to chair. For half a century, Sweden had been dedicated to multilateral cooperation; active participation in the United Nations was a cornerstone of Sweden's foreign policy. The Organization was essential to combat poverty and environmental decay, and to promote sustainable development. The United Nations was needed to combat the economic and social root causes of conflict as part of a comprehensive strategy to prevent war. A reformed and revitalized United Nations was needed as a central force for global solidarity.
ADAM VAL DELANEY (Papua New Guinea) said that mandated actions to be undertaken by governments must be balanced by greater international cooperation in trade, investment, capital flows and an enabling international economic environment. International support was essential to balance population control with assistance in health and education, he added. Similarly, environmental protection and conservation required compliance by all and, where feasible, development of internationally accepted codes of conduct for natural resource development. He said his delegation was open to proposals on the need for an international system that properly balanced the scale of rapid trade liberalization with the ability of weaker countries to compete fairly in foreign markets and to afford external resources and finances.
Papua New Guinea supported reform of the Economic and Social Council, but no reform would solve all the problems the international community faced. He said development assistance by financial institutions followed a trend that was closely tied to conditions on environmental protectionism, trade liberalization and deregulation, and the withholding of funds for agreed programmes.
HICHAM HAMDAN (Lebanon) endorsed the statement of Costa Rica on behalf of the "Group of 77" developing countries and China. He stressed the need for the implementation of decisions adopted at the various United Nations conferences. He said guidelines were required to ensure the achievement of those decisions. He also called for coordination and binding responsibilities among the various organs of the United Nations system to ensure implementation of the decisions.
He noted that the economies of a large number of developing countries were close to marginalization as far as globalization was concerned. The debt-reduction plan adopted by the Bretton Woods institutions at their recent meetings was far too modest to meet the needs of the poor countries. Turning to the issue of post-conflict peace-building, he said world stability could not be achieved by the settlement of conflicts alone. Development assistance was also required for peace to become a reality. He suggested that the
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Secretariat should draw up a dossier on the issue of peace-building. He appealed for political will to ensure the success of the environment fund.
SAID AL-HARTHY (Oman) said Oman attached great importance to the Agenda for Development. It had been five years since the Secretary-General had initiated the process, and although Oman was pleased with the progress made by the working group charged with the task, it urged the group to expedite its work. As a country strongly committed to environmental conservation, it had taken important steps to implement Agenda 21. As a country prone to desertification and drought, it saw great deal of merit in the United Nations Convention to Combat Desertification. Oman had also acceded to the WTO.
He said his country was basically a unilateral economy primarily dependent on oil as the driving force behind its economic process. Therefore, its economy was hostage to fluctuating oil prices, and it was subject to changes in the economies of industrialized countries. The Government had been aware of the need to diversify and had taken steps to expand sources of national income through privatization programmes and stimulation of domestic and private investment.
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