UN REFORM PROCESS HAS ULTIMATE GOAL OF ENHANCING GLOBAL DEVELOPMENT, SECRETARY-GENERAL TELLS ECONOMIC AND SOCIAL COUNCIL
Press Release
ECOSOC/5708
UN REFORM PROCESS HAS ULTIMATE GOAL OF ENHANCING GLOBAL DEVELOPMENT, SECRETARY-GENERAL TELLS ECONOMIC AND SOCIAL COUNCIL
19970703 Council Also Addressed by President Of General Assembly; Countries Call for Increased Development Aid(Reissued as received.)
GENEVA, 3 July (UN Information Service) -- The primary mission of the United Nations remained development, Secretary-General Kofi Annan told the Economic and Social Council this morning.
Mr. Annan termed development the organization's most critical long-term task and called it "a pillar of peace, a foundation of stability, and a powerful force for preventive diplomacy and preventive action".
Mr. Annan, addressing the "high-level segment" of the annual Council session at which a number of country delegations are represented at the ministerial level, went on to review reforms of the United Nations already begun and to preview the next stage of reforms, contained in a report to be presented later this month to the General Assembly.
A major portion of the report would be devoted to development, Mr. Annan said, stressing that the reform process would be judged to no small extent on how well it strengthened the ability of the United Nations to promote economic and social progress and to address, through development, the root causes of poverty and conflict. Upcoming changes would affect both Headquarters and field operations, he said, adding that while in many areas there must be consolidation, in other sectors of UN work there were gaps that needed to be filled. He said and the process was aimed at producing an "efficiency dividend" that would allow redeployment of resources accruing from administrative savings to development-related activities.
Mr. Annan's speech was followed by an address by Razali Ismail of Malaysia, President of the General Assembly, who said the United Nations needed to project strongly the need for high growth and accelerated development and should play a leadership role to that end on behalf of developing countries. He urged a reversal of the recent decline in
development aid from the advanced countries to the poorer nations of the world -- a subject of much debate at this year's Council meetings -- and said it was critical to reverse that trend.
After Mr. Razali's remarks, national delegations delivered statements, with several representatives of developing countries citing increased development aid and further debt-relief measures as critical for improving the lives of their citizens.
Officials of the following countries spoke: United Republic of Tanzania, Republic of Korea, Czech Republic, Gabon, Spain, South Africa, Latvia, Tunisia, Namibia, Norway, Thailand, Turkey, Uganda, and the Philippines.
The Council will reconvene at 3 p.m. for a session expected to run until 9 as it continues debate on the theme of this year's high-level segment: "fostering an enabling environment for development".
Statements
Secretary-General KOFI ANNAN told the Council said that while United Nations peacekeepers and humanitarian relief personnel were deployed in a range of global hot spots, the primary mission of the organization, its most critical long-term task, remained development -- a fundamental pursuit in and of itself but also a pillar of peace, a foundation of stability, and a powerful force for preventive diplomacy and preventive action.
To achieve such an "enabling environment", it was essential to establish democracy, respect for human rights, and good governance -- governance that was transparent and accountable, the Secretary-General said. Democratization of international relations also was vital; this meant, among other things, greater participation by developing countries in the mechanisms governing the global economy. While Governments in developing countries had a responsibility to pursue and implement sound policies, and to provide a strong base of social services and physical infrastructures, and to ensure that development was broad-based, equitable and sustainable, developed countries also had far-reaching responsibilities; they needed to enhance coordination of their macro-economic policies, and to ensure greater coherence in their trade, aid, and economic policy-making. This would provide greater access for developing countries' exports and encourage increased flows of capital, investment, and technologies to developing countries.
The United Nations also had a major role to play, the Secretary-General said, and fostering development was at the root of the reform process now under way within the UN. Already, he had taken a number of steps, including consolidation of the three economic and social departments at the United Nations Headquarters in New York. He also had established an Executive
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Committee for Economic and Social Affairs, which included participation of the United Nations Environment Programme (UNEP) and the United Nations Conference on Trade and Development (UNCTAD), thus sharpening the focus in two of the most critical dimensions of development: the environment and the trade/investments/technology nexus. In addition, the regional commissions participated in the process, ensuring that global and regional aspects of development were harmonized.
The next step would be a report on reform that he would present to the General Assembly later in July, Mr. ANNAN said. It would be wide-ranging, encompassing the United Nations as a whole -- not only the Secretariat but also all UN programmes and funds. A major portion of the report would be devoted to development -- indeed, the reform process would be judged to no small extent on how well it strengthened the ability of the United Nations to promote economic and social progress and address, through development, the root causes of poverty and conflict.
The success of reform should not be measured by the addition or subtraction of committees or institutions, the Secretary-General said -- what counted ultimately was the impact, the positive difference the United Nations could make in the daily lives of people. It was true that in many areas there must be consolidation, but in other areas of UN work there were gaps that needed to be filled. The initiative he was pursuing aimed at producing an "efficiency dividend" that would allow redeployment of resources accruing from administrative savings to development-related activities.
The Council had not been able to play fully the role envisaged for it in the United Nations Charter, Mr. ANNAN said. Although this had led to repeated calls for drastic reform of the Council, he did not believe there was political consensus in favour of drastic reforms that would fundamentally alter the Council's character and authority. He nonetheless would address ways of enhancing the Council's role in promoting policy coordination within the United Nations system and of improving the coherence of the Council's subsidiary machinery.
Implementation at the country level was the most tangible way the public would experience UN reform, Mr. ANNAN said, and his report would focus not only on policy-making but on operational activities for development -- and area that had been addressed by the organization with increasing intensity in recent years. Legislation to date stressed that the distinct mandates of funds and programmes must be respected and enhanced, but at the same time had emphasized that funds and programmes should be guided by common policy frameworks, to which all were called upon to contribute. The General Assembly had called for better coordination of funding arrangements, and had said that UN country teams should be organized according to the needs of the cooperation programmes themselves, rather than by institutional structures and divisions.
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Measures and proposals on humanitarian assistance that he would put forward in his reform report would cover both Headquarters and the field.
RAZALI ISMAIL (Malaysia), President of the General Assembly, said that although the theme of fostering an enabling environment for development was important, its open endedness and generality might make the discussion diffused. The United Nations needed to strongly project the need for high growth and accelerated development. It should also play a leadership role in the context of economic growth and accelerated development in developing countries.
Mr. RAZALI said he would not go into the decline of overseas development assistance, but he was critical of ambiguity about reversing this decline and the political veto on innovative financing. The special session of the General Assembly showed how difficult it was to get a political consensus, and how a few developed countries were holding others back, which resulted in diminished resources. The United Nations had to somehow be allowed to have a say in "hard economics"; the Organization was hurt by only working with "soft" economic policies. This had resulted in the South considering the United Nations as a place of last recourse. The Secretary-General's reforms to be announced on 16 July should enhance the role of the United Nations and the mobilization of its resources. He questioned if specialized agencies would continue to be under the control of "arbitrary decisions" by some countries, and whether funds for humanitarian activities would continue to decline.
Mr. RAZALI said the issue of globalization had to be addressed clearly because not all developing countries were ready for integration and many were even being coerced into doing so. The United Nations needed to look into this. Developing countries needed to develop their own financial and economic systems, and developed countries had to open up their markets. The United Nations needed to play a role in this because it had not been established to rubber stamp the policies of the Bretton Wood institutions.
DAUDI N. MWAKAWAGO (United Republic of Tanzania) said that almost all developing countries had taken steps recently to establish sound macro-economic policies to lay the foundation for development, including far-reaching structural adjustment measures; but there still was a need for international support for such domestic efforts, and meanwhile official development assistance (ODA) flows had fallen sharply. There must be a renewal of the spirit to continue to provide ODA by the developed countries through taking immediate action to arrest that downward trend. He also called for further debt-relief measures on behalf of developing countries, for greater efforts at South-South cooperation, and for intensified technology transfer from advanced nations.
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MAN-SOO KANG, Vice Minister of Finance and Economy of the Republic of Korea, said that a new golden era in the twenty-first century would not come by itself, rather conscious efforts should be made to maintain the present tread towards shared prosperity and to spread it to every corner of the world. These efforts should include creating and maintaining an enabling environment for development. The most critical component was to promote capital flows to developing economies, especially to those on or beyond the periphery of the present-day prosperity. These countries had to attract foreign capital by undertaking reforms toward more free trade and investment. Self-help on the part of developing economies in the form of domestic economic reforms was very crucial, but not sufficient in promoting the flow of capital. The role of international assistance was to help jump-start the reform process and to encourage the inflow of private capital. Official development assistance was important, but its decline was an issue of concern. Development assistance needed not only be financial, but resources could be provided in kind or in the form of guidance and advice. The role of the World Bank and the International Monetary Fund and other development banks were important. The willingness of the donor members of these institutions to help was important to create a success story.
KAREL KOVANDA, Deputy Minister of Foreign Affairs of the Czech Republic, said that following several years of encouraging economic progress, the country had hit a speed bump. The Government recently had issued an analysis that was very self-critical -- it identified as a major factor the country's defective legal and administrative environment, which had not provided conditions in which rules allowed market fair play and in which "property owners would find it worthwhile to behave responsibly". The problem was that the economic transition had not been accompanied by a corresponding transition of the legal system. There had been numerous scandals and various kinds of insider trading and theft. The Czech Republic had learned its lesson, but was still recovering from the damage, and cautioned developing countries and other countries in transition that they would ignore this lesson at their peril.
ALFRED MABIKA, Deputy Minister of Planning, Environment and Tourism of Gabon, said it was high time to put an end to the sad and sorry state of developing countries continually being stricken by underdevelopment. A number of reforms and conditions needed to be effectively established to create an enabling environment for development. One of them was the liberalization of institutions in developing countries, with a rule of law and adequate legal frameworks. Developing countries in Africa which had started reforms should be praised and the international community should support them. Money would only be invested if there was something to invest in. It was important for developing countries to identify, with the support of international institutions, projects to attract investment. A solution for the debt issues also needed to be found. The continuation of the work of the structural adjustment fund in the International Monetary Fund was good, but there should
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be stepped up participation of donor countries and there was need for increasing number of eligible developing countries in the process.
FERNANDO VILLALONGA, Secretary of State for Development and International Cooperation and for Iberoamerica of Spain, said increasing economic interdependence obliged all to redefine strategic interests and common principles and values; there was a need to ensure at the national level respect for human rights and fundamental freedoms; that above all enabled all societies, especially the neediest, to share in global economic progress. Respect for those rights strengthened national and Governmental stability, encouraged private initiative, attracted foreign investment and spurred international trade. Multilateral and bilateral common rules were needed to govern trade and economic operations, and the international community needed to do more to set up monitoring and control machinery to ensure that all could participate freely. There was a need to increase development aid, it was true, but any increases required corresponding increases in the efficiency and quality of the programmes such aid funded.
P. MLAMBO-NGCUKA, Deputy Minister of Trade and Industry of South Africa, said globalization could not be fully celebrated as long as the marginalization of Africa continued. The challenge of those countries by-passed by globalization should force us to rethink how the United Nations and other multi-lateral organizations worked in promoting development. It was time for the United Nations and its members to move purposefully and decisively on reform and transformation. However, this reform had to permeate all sections of the United Nations. All countries should be ensured meaningful participation in the United Nations work and decision-making. There was a need to advance multi-lateral mechanisms to deal with current and emergent issues, including those generated by globalization. Policy coordination by the multi-lateral agencies was an important element of successful development and optimal utilisation of the capacity of member states, and lock of coordination brought the danger of wasting valuable financial and human resources. Adequate, properly structured and directed overseas development assistance was needed critically. Markets could not be allowed to reign unfettered; rather, governments had a central role to play. Developing countries were willing to take on the responsibility for promoting their own development. With the political will which is evident in Africa, and the support of the international community, the African Renaissance would become a reality.
ROBERTS ZILE, Minister of Finance of Latvia, said that six years after embarking on economic transition, the country had achieved economic stabilization and a real foundation for the future, although the process had been difficult; a number of economic and financial indicators were stable or rising, including the economic activity index, which had almost doubled between 1994 and 1996. Latvia continued its cooperation with the
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International Monetary Fund (IMF), the International Bank for Reconstruction and Development, the International Development Association, and the International Finance Corporation, as well as with the European Bank for Reconstruction and Development, Mr. ZILE said; in future the country hoped these credit sources would maintain their competitiveness with alternative financial sources, especially for projects in the private sector. The United Nations Development Programme office in Riga already worked in a very cost-effective way, and it was hoped that the UN system of providing core resources for development would be maintained on a predictable, continuous, and assured basis.
FETHI MERDASSI, Secretary of State for International Cooperation and External Investment of Tunisia, said international cooperation was at a crucial crossroads in the context of globalization. It was essential to boost cooperation with developing countries, while domestic measures to maintain an environment for the growth of development in developing countries was necessary. Globalization had resulted in rapid economic growth in some countries, but others were still subject to economic recession, and this gulf was growing. The participation of developing countries within the United Nations system and in the Bretton Woods institutions needed to be expanded. Minimum conditions were needed like the liberalization of trade regimes which were transparent and non discriminatory. The dispute settlement machinery of the World Trade Organization was essential to the whole globalization system, and appropriate follow-up measures needed to be established. Measures to protect the environment should be supported, but should not be used as a disguise for protectionism. Exports from developing countries needed to be encouraged. And there needed to be a mobilization of external resources and a effective and innovative solutions to the foreign debt problem which would be catalysts for development.
WILFRED EMVULA, Deputy Minister of Trade and Industry of Namibia, said that for many developing countries, global optimism about economic growth co-existed with local pessimism. The Economic Commission for Africa's Conference of Ministers responsible for Economic and Social Development Planning had held in May a meeting at which they had accepted unanimously that promotion of trade and development in Africa depended upon stability of political and economic environments, adoption of appropriate macro-economic policies, and awareness and initiatives at multinational levels. Namibia knew it could not abdicate its primary responsibility for economic development, but what it was saying was that the international environment was not conducive to fair play. Namibia and other countries in the Southern Africa Development Community had taken steps needed for progress, but the international community had to play its part by supplying necessary aid for development, as opposed to emergency relief and peacekeeping operations, and by enacting further measures for the debt relief of developing countries.
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KARI NORDHEIM-LARSEN, Minister of Development Cooperation of Norway, said that international cooperation had to seize opportunities offered by the process of globalization while curbing its negative impacts. It was crucial to better integrate the developing countries into the world economy. At the national level, it was the prime responsibility of governments to create a policy framework that was conducive to private sector involvement. International institutions responsible for development and trade had to work together to help the development countries. The decrease of overseas development assistance during the last years was unacceptable -- the richest countries could not seek to impose conditions on development partners while not making the needed financial tools available. The poorest countries were in need of external assistance to finance basic social services and infrastructure, as well as capacity-building and competence. The United Nations also had an important role to play in creating an enabling environment for development, but the system needed comprehensive reforms to become a more efficient tool.
PITAK INTRAWITYANUNT, Deputy Minister of Foreign Affairs of Thailand, said Thailand had worked over several decades to create the conditions for positive development, and the reward had been the fastest-growing economy in the world from 1985 through 1994. However, in the past few years, a combination of international and domestic factors had created problems -- the country had become vulnerable to speculators and short-term financial flows. The lesson learned might be applicable to other developing nations -- openness to global markets brought numerous benefits, but one had to keep one's own house in order and steps to strengthen domestic financial markets and regulatory mechanisms had to be taken within increasingly compressed time frames. To protect against rampant speculation against the Thai baht and set the stage for future growth, yesterday the Bank of Thailand had allowed a system to take effect to allow the value of the baht to be determined by market levels. Developed countries and the international community, meanwhile, needed to take more responsibility for providing stability in international markets. The IMF needed to exercise its role of comprehensive oversight of the international monetary system, especially over speculation and currency flows that threatened the stability of developing countries.
MEHMET KAYTAZ, Under-Secretary of Treasury of Turkey, hoped the Council debate would allow countries to fully assess the positive and negative impacts of globalization. A growth oriented economy, a transparent legal and regulatory framework, and a strong base of social and physical infrastructure were key elements of an enabling environment for development in a "globalized" world. The unified goal of the international community should be to bring all the countries at varying development levels under the umbrella of a more transparent, predictable and rule-based multilateral system. In order to offset the negative effects of globalization and marginalization, particularly in the poorest countries, the world should adhere to the
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long-term development purposes of official development assistance. Despite some successful cases in Africa, growth prospects for many African countries were hampered in part by the effects of unsustainable levels of external debt. Turkey fully supported the ongoing debate in UNCTAD on the elaboration of an international rule based investment regime which took into account the development aspect. The United Nations, through the Council and in close cooperation with financial institutions, was the most appropriate forum to tackle these issues and monitor the implementation of possible recommendations.
MARTIN ALIKER, Minister of State for Foreign Affairs of Uganda, said Uganda had taken major steps over the past decade to foster an enabling environment for development, including commitment to macro-economic stability, privatization, liberalization of trade policy, and regional cooperation. In addition, democracy had been firmly established. The result had been impressive growth rates of over 5 per cent since 1990. Uganda was grateful for the support it had received from both bilateral and multilateral donors, which had supplemented national efforts; currently private investment also was playing a major role, with the task of mobilizing investors being coordinated by the Uganda Investment Authority. Trade had been augmented by diversification of products, including development of non-traditional exports. Uganda appreciated the support it had received under the HIPC debut initiative, but the delay in implementation of this programme would adversely affect Uganda's import and investment programme. Uganda hoped that other developing countries would, in the near future, also benefit from the initiative.
DANTE CANLAS, Under-Secretary for Socio-Economic Planning of the Philippines, said that one of the fundamental changes in the past decade was the adoption by many developing countries of stabilization and market-oriented structural policy reforms. These had involved the dismantling of elaborate protectionist structures based on high tariffs and import restrictions. These reform-minded economies were presently linked to the rest of the world through trade. However, the increasing openness had opened up new policy challenges. One was the mobility of international capital which could cause undesirable fluctuations in exchange and interest rates. Another was that equitable development within and across other developing economies cried out for a speedier pace. It had to be recognized that the least developed economies had limited capacity to undertake internal policy reforms. But they were hampered by a scarcity of physical capital and skilled manpower. The channelling of a significant amount of official development assistance coursed through bilateral and multilateral agencies to human capital investments in the least developed economies was welcomed.
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