UNITED NATIONS MUST DEAL WITH 'HARD ISSUES' OF ECONOMICS, INCLUDING TERMS OF TRADE, MARKET ACCESS, FINANCIAL RESOURCES, DEBT
Press Release
GA/9279
ECOSOC/5707
UNITED NATIONS MUST DEAL WITH 'HARD ISSUES' OF ECONOMICS, INCLUDING TERMS OF TRADE, MARKET ACCESS, FINANCIAL RESOURCES, DEBT
19970703 General Assembly President, Razali Ismail (Malaysia), Emphasizes at High-Level Segment of Economic and Social Council in GenevaFollowing is the statement of the President of the General Assembly, Razali Ismail (Malaysia), to the high-level segment of the Economic and Social Council, in Geneva today:
The theme of the high-level segment of the Economic and Social Council, "Fostering an enabling environment for development: financial flows, including capital flows, investment and trade", is undoubtedly important, though its "open-endedness" may result in the discussions being diffused, if not unfocused. A few of the people that I referred the paper*/ to in New York, see it tilted more towards what is termed as the "Washington Consensus", i.e., reflecting too strongly the underpinnings of the World Bank's and International Monetary Fund's (IMF) points of view. The paper should present a more nuanced view of world economic problems and the special problems of developing countries. The critique against the paper is that it is general, more consonant with and applicable to industrialized countries and higher- income developing countries.
The argument is that the United Nations is the apex body of the multilateral system and needs to present a broader and more encompassing view of economic problems. The United Nations must strongly project the need for higher levels of growth, accelerated development and geographically better distributed growth. It must take a longer-term view. In the context of high economic growth in developing countries, this requires a vibrant public sector playing a leadership role.
If one looks at the deliberations and results of the General Assembly special session on Agenda 21 that was held last week, and the reasons why the results were so paltry and broke very little new ground, if any, one would have to conclude that international cooperation in terms of dealing with the means of implementation has come to a very serious impasse. I recall when the
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"Agenda for Development" was adopted two weeks ago, the delegation of an important industrialized country supported the consensus on the Agenda, particularly underlining their Government's commitment to sustainable development. Yet, even on this issue, which is the darling of the developed world, there are scant resources.
I need not go into what everyone knows about the decline of official development assistance (ODA) from 0.33 per cent to 0.28 per cent in those five years. We have to seriously take stock of the fate of international commitments given at summit level. During the special session and even during the discussions leading to the "Agenda for Development", there was much ambiguity about the need to reverse the decline of ODA. Little was allowed to be said about innovative financing or mobilizing new and additional financial resources. In fact, a political veto is applied on really looking at innovative financing.
In the above context, what is the role of the United Nations in fostering an enabling environment for development? Is the United Nations purely to be normative, prescriptive or, at best, a consensus-maker without the ability to translate consensus into material and tangible terms? The special session illustrated just how difficult it was to extricate a political consensus and honest appraisal of commitments that had not been honoured, even despite knowing that it was not a pledging conference. While there were many in the developed world who wanted to go further, there were a few, one or two most surprisingly, who held others back. This is not a new situation regrettably; in the Global Environmental Facility, the unwillingness of one results in replenishment and volume of resources being diminished in the context of burden sharing.
During the regular session of the fifty-first General Assembly, the Second Committee (Economic and Financial) passed seemingly important and topical consensus resolutions, such as "Net flows and transfer of resources between developed and developing countries" (51/165), and "Global financial integration and strengthening collaboration between the United Nations and the Bretton Woods institutions" (51/166), where tantalizing formulations were arrived at relating to recognizing that development required both resources and an enabling environment. But what would be the value of these resolutions if in actual implementation not much can be expected? If the favourite topic of sustainable development and programmes for environmental protection cannot find financing, what are the prospects for individual countries, especially least developed countries and those economies which do not yet contribute to world growth and expanding trade?
Let me come back to the role of the United Nations. On the basis of the results of the special session, I am convinced that somehow the United Nations should also be allowed to deal with the hard issues of economics, such as
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terms of trade, market access, financial resources, debt, and so on. It works to the detriment of the United Nations, further weakening it in the context of the division of labour with the Bretton Woods institutions and the World Trade Organization, to deal only with the so-called soft economic and social policy issues, such as prescriptions for sustainability, humanitarian affairs, and so on. Three days ago, at the first Erskine Childers Memorial Lecture in London, I said the following: "The South regards the United Nations as a place of last recourse ... these countries believe in the centrality of the United Nations being a universal house ... they have not accepted the so-called division of labour between the United Nations and other multilateral bodies where the United Nations is allowed to articulate only the normative description of soft issues. The frailty of such a role for the United Nations is most recently evident in the outcome of the General Assembly special session, reflecting the inability of the United Nations to grapple with the failure of governments to meet commitments, and its weakness in being able to catalyse the means and resources to operationalize sustainable development. The United Nations has precious little to translate words into real action."
I quote this in the presence of the Secretary-General, who will on 16 July come before the General Assembly with his proposals on comprehensive United Nations reform, including on the role of the United Nations in the economic and social context, as well as in development operations. Let me pose questions:
-- Would these proposals, with governmental support, result in an enhanced role for the United Nations in resource mobilization?
-- Would the specialized agencies, programmes and funds of the United Nations continue to be dependent on arbitrary decisions by donors of voluntary contributions, without relating to the whole complex of development priorities and needs, but seen to be taking care of their favourite charity?
-- Would economic and social reform equate with expanded development functions that will draw a distinction between humanitarian emergency activities with development activities, and ensure that no funds will be drawn from development activities for humanitarian needs? Thirteen per cent more funds go to humanitarian/emergency activities, even as development funds decline.
-- Would the reforms result in a greater role for the United Nations in macro-coordination in relation to the Bretton Woods institutions and the World Trade Organization?
The United Nations role in economic and development issues require two things. First, greater seriousness on the part of developed countries to
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discuss economic issues in the United Nations particularly the hard issues, without simply referencing similar discussions and activities in Bretton Woods Institutions and World Trade Organization. A statement can be made that the developed countries are less and less inclined to do so, desiring to shape the international economic system elsewhere, and then applying a fait accompli through financial coercion on developing countries. Much as I love the environment, the developed countries cannot build economic partnership purely on the basis of the environment and sustainability. They must deal also with the need for economic growth everywhere, and not just domestic unemployment, inflation and the dismantling of their welfare states. By the way, what do our discussions here really mean in the context of next week's North Atlantic Treaty Organization (NATO) summit and the decision to expand NATO membership with financial implications hitting a ballpark figure of at least $30 billion?
Second, we must involve more heads of governments in the real discussion at the United Nations to put life and political content into our debates, not just at the annual general debate every September. We have a situation where foreign ministries have declining clout over issues of economics and development. We have to involve the other development and trade-oriented ministries and the political leaders. The United Nations must, in this context, "compete" with the "Group of Seven"/"Group of Eight" and such summits, decrying the majority of the human race from that club, which, together with global corporations and banks, have taken upon themselves to define development and lay down the "new rules of the game" through institutions that they control.
The United Nations must also address squarely the issue of globalization. Important as it is, the higher issue is growth and development with social justice and equity. Macroeconomic coordination should not only be geared to financial stability and fighting inflation, but also to growth and accelerated development everywhere, especially in the marginalized areas. Not all the developing countries are ready for integration into the globalized system. Many are being coerced into it prematurely; financial rules are being worked out predominantly in financial institutions elsewhere. The United Nations needs to look at these, especially from developing countries and from a global perspective. Developing countries need to develop and strengthen their own financial and banking systems, and not to be over-eager to link-up with the global financial system. The United Nations must make the case that it is the developed countries that must open up their markets much more to developing countries' exports. Low-income countries need to develop their domestic markets and industrial capacity, especially on the basis of subregional cooperation and not be forced to open up indiscriminately.
My final point is to call for a joint effort between the United Nations General Assembly and the Economic and Social Council. As matter of fact, the three principal organs of the United Nations, the General Assembly, Economic
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and Social Council and Secretariat, would need to coordinate with common purpose. Each has a distinct role: the Economic and Social Council is a coordinating body; the General Assembly, a political/policy body. Neither should allow one body to be used by certain countries and make the other ineffective. The role of the Secretariat under the Secretary-General cannot be over-emphasized. There is reason to believe that over the years the Secretariat has got weaker and meeker. It must be revitalized, and we have the right Secretary-General for that. The Secretariat must represent globalist, multilateralist thinking on behalf of the maximum number of countries and peoples for their maximum benefit. The Secretariat must resist the "Washington Consensus". After all, the United Nations was not established to be a rubber-stamp to the Bretton Woods institutions or to the World Trade Organization.
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