ECONOMIC AND SOCIAL COUNCIL CONCLUDES HIGH-LEVEL DISCUSSION OF ENABLING ENVIRONMENT FOR DEVELOPMENT
Press Release
ECOSOC/5711
ECONOMIC AND SOCIAL COUNCIL CONCLUDES HIGH-LEVEL DISCUSSION OF "ENABLING ENVIRONMENT FOR DEVELOPMENT"
19970707 Hears Many Calls for Prevention Of Marginalization of Poorer Nations as Global Economy Accelerates(Reissued as received.)
GENEVA, 4 July (UN Information Service) -- The Economic and Social Council concluded this evening its high-level segment on how the United Nations and the international community as a whole could create "an enabling environment for development", especially for the world's poorer countries.
As over the preceding two days, numerous national delegations expressed concern that accelerating international economic growth and rapidly expanding global trade were leaving the least-developed countries behind. They called for reversal of declines in official development assistance for such countries and urged that greater efforts be made to provide a "level playing field" for all nations seeking access to international markets.
Many participants in the Council's high-level segment, which began on Wednesday, were government ministers for trade and economic development.
Among remarks offered at the meeting were those of the Deputy Minister of Foreign Economic Relations and Trade of Ukraine, who said the subject of "transition economies" deserved concerted discussion by the Council, and that further technical advice was needed by such States on how to achieve economic and legal restructuring profound enough to make any reversal impossible.
The Director of Multilateral Economic Cooperation of Indonesia, echoing a concern of many countries, stated that globalization "always tends to favour the strong over the weak".
And the Director-General for International Economic Affairs of Peru said new types of trade protectionism in the form of labour and social and environmental standards needed to be addressed by the international community, as they could short-circuit extensive measures taken at great cost by developing countries to win access to world markets.
Summarizing the three days of debate, Council President Vladimir Galuska (Czech Republic) noted that over 70 delegations had spoken and that among an apparent "broad consensus on sound macroeconomic policies" at the national level was a top priority on creating job growth. It also was agreed, among other things, that on the international level official development assistance continued to be essential for developing countries, he said.
Also making statements at the meeting, which began at 4 p.m., were representatives of Gambia, Mexico, Pakistan, Kenya, Belarus, Cote d'Ivoire, Algeria, Bolivia, Venezuela, Egypt, Malta, Nigeria, Democratic Republic of the Congo and Zambia, as well as a representative of the United Nations Educational, Scientific and Cultural Organization (UNESCO).
When the Council reconvenes at a.m. on Monday, 7 July, it will resume its operational activities for development segment.
Statements
MYKOLA SHEVCHENKO, Deputy Minister of Foreign Economic Relations and Trade of Ukraine, said a large group of countries were carrying out profound reforms to move from planned to market economies, and the results of their efforts would have a profound impact on the entire world; the subject of transition economies deserved concerted discussion by the Council, especially as these economies, even after some years, had not yet stabilized. Among other things, further technical advice was needed, especially on such restructuring as to make any reversal impossible. Globalization had indeed led to accelerated trade and growth, but it also was true that in many developing countries progress was not being made -- instead, the reverse was occurring. While basic responsibility for development must be borne by each country, international aid was essential. Ukraine had taken numerous profound steps to create macroeconomic stabilization, full-scale privatization, and social services for the most vulnerable groups in Ukrainian society; it would press on, and a major goal was entry into the World Trade Organization (WTO) and its full participation in world markets, along with a major increase in foreign investment, especially from developed countries and private capital sources; current foreign investment was not sufficient.
HERIJANTO SOEPRAPTO (Indonesia) said there was a significant downside to globalization and liberalization of finance and trade. Globalization always favoured the strong over the weak, and as a result, many developing economies often found themselves stagnating and incurring increased instability and distortions. There was also the drift into marginalization when many countries were passed by because they did not have adequate capacities to grow in the new milieu. It was imperative that the international community assisted and facilitated such weak and vulnerable economies, especially least developed countries, by building their capacities.
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For many developing countries, official development assistance remained their main source of funding, he continued. Thus, the sharp decline in official development assistance in recent years was regrettable. Indonesia also sought a durable and comprehensive solution to the external debt of developing countries. The fostering of a conducive or enabling environment, both at the domestic and international levels, was of paramount importance.
JORGE VALDEZ, Director-General for International Economic Affairs of Peru, said new forms of trade protectionism in the form of labour and social and environmental standards needed to be addressed by the Council; these often diminished the efforts of countries to open their national economies and made at enormous cost. Peru had made major steps to carry out market reforms, redefined and revitalized the public and private sectors, and established a stable and transparent Government investment programme; in addition there was a political commitment to use 40 per cent of available national resources for social expenditure, especially to reduce poverty and increase employment. But enhancing development should be a two-way street; international and advanced country measures were needed to establish stability, predictability, and accessibility, for the global economic system. Coordination of macro-economic policies deserved to be the subject of a future Council high-level segment.
MOMODOU KEBBA JALLOW (Gambia) said fostering an enabling environment for development required the imposition of specific conditions. Economic growth and sustainable development had an impact on countries still struggling for economic survival, like Gambia. Strong economic growth in the world in the second part of the 1990s was not all embracing; the gap between rich and poor continued to grow. Despite positive signs of economic growth in Africa, the continent continued to play a marginal role in international trade, and its foreign debt was increasing. Living conditions continued to bear the brunt of the negative consequences of globalization, which were further compounded by a high rate of population increase and large refugee movements. The lack of institutional capacity, the inability to attract foreign investment and the decline of official development assistance had to be tackled before the benefits of globalization were reaped. The keys to solving the problems at hand were assured official development assistance; free market access; free technology transfer, and increased foreign capital. Unfortunately, the commitment by developed countries to provide these had not been forthcoming.
ANTONIO DE ICAZA (Mexico) said the world's most vulnerable countries were the most vulnerable as well to sudden change, and it was vital that there be a global economic environment that was stable rather than volatile, and that offered a true chance for developing countries to participate; advanced countries must be urged to ensure that their economic, political, and other policy decisions did not impact in a negative, unfair way, on the world's most vulnerable States. Subsidies disrupting international trade should be eliminated, especially as used by the industrialized countries, but those should be distinguished from non-disruptive subsidies used by some developing
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countries to protect fragile economies and citizens at risk; it similarly was necessary to prevent sudden, drastic fluctuations in prices and capital flows -- those did not offer international opportunities so much as international dangers. A sudden interruption in capital flows to Mexico in 1994 had caused severe damage, and it had taken major efforts over two and a half years to restore confidence and a positive economic outlook for the country.
MUNIR AKRAM (Pakistan) said the process of globalization was uneven and unequal among nations. Weaker nations should be enabled to develop in the rapidly liberalizing economic environment. The first and most important recommendation of the Council debate should be the need for a revival of growth-oriented policies in all the major industrialized countries. Those countries also should "bite the bullet" on the liberalization of trade, especially in traditional sectors like textiles and agriculture; the Uruguay Round agreements should be fully implemented in this respect. Liberalization had a negative impact on the balance of payments positions of weaker economies and it was essential to strengthen or create new compensatory mechanisms to help developing countries to continue the implementation of the agreements. Further, conscious efforts were necessary to promote investment and financial flows to the maximum number of developing countries. At the same time, it was also essential to evolve mechanisms designed to ensure that developmental concerns and the interests of investors remained mutually compatible. The Council should recommend the early implementation of the debt initiative for the heavily indebted poor countries and broaden its scope. In the end, it was essential to strengthen the ability of all the players to participate beneficially in the new global economy.
ESTHER M. TOLLE (Kenya) said the Government in collaboration with the World Bank and the International Monetary Fund (IMF) had formulated reform policies designed to create conditions for rapid and sustained economic growth and at the same time had offered incentives to foreign investors with a view to creating employment opportunities and improving the living standards of Kenyans. A higher real gross domestic product (GDP) growth had resulted, coupled with one-digit annual inflation rates, all in line with the country's commitment to promote and strengthen its private sector as an engine of economic growth. But Kenya felt disappointment at declining trends in official development assistance; such aid was crucial to complementing domestic savings and meeting the necessary capital requirements for economic growth in developing countries; it would be more productive for donor countries to reverse this trend, in particular for Africa and other regions where there were least-developed countries. Also important were further steps to promote an open and secure multilateral trading system and to relieve often-disabling external debt burdens of developing countries -- a durable, development-oriented solution was needed to that serious problem.
SYARGEI MIKHNEVICH (Belarus) said globalization and liberalization of trade had led, for some countries, to a greater flow of foreign investment and
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increased exports. However, many developing countries had not seen the same results, and had instead experienced a situation exacerbated by various internal and external circumstances. Sometimes disastrous complications arouse, especially in the social sector. Belarus itself was not having an easy time of it at all. To overcome its existing economic crisis, Belarus had adopted a programme of socio-economic development that had exports, housing as the three main priorities. The attraction of foreign investment was also very important. Advisory services and technical expertise needed to be provided to developing countries according to their specific needs.
BAMBA YOUSSOUFOU (Côte d'Ivoire) said there were certainly causes for optimism in current trends in the international economy and in recent actions by the international community and the world's advanced nations, especially as they related to Africa; and it was indeed up to every country to shoulder prime responsibility for its development. However, there were things that African developing countries could not control that were important to their developmental fates; they could provide for themselves, as Ivory Coast had, peace and economic and political stability, and they could develop their private sectors and establish good governance, and they could realize encouraging rates of GDP growth. But the international climate mattered, too. Ivory Coast had greatly benefitted from recent debt-relief measures, and was grateful to the creditors who had made that possible; but it still felt some preferential measures were needed to allow developing countries to enter the global marketplace, as the United States recently had done for African countries, and it still felt development aid should be substantial at such a critical time.
MOHAMED-SALAH DEMBRI (Algeria) said human development had to be the focus of the international community. The Council's debate on an enabling environment for development reflected the preoccupation of the international community with the present situation. Developed countries were better prepared and had avoided constraints on economic development around the world based on their own capabilities. It was urgent to come up with solutions to the most crucial problems facing countries today: the world had to alleviate foreign debt, ensure the transfer of technical and financial capital and ensure access to markets. The international financial institutions should also cooperate with the United Nations to create global programmes to help developing countries. International economic rules had to be revised and official development assistance to developing countries had to be increased.
ADNAN BADRAN, Deputy Director-General of United Nations Educational, Scientific and Cultural Organization (UNESCO), said there had been in recent years a sharp decrease in ODA, which was furthermore increasingly directed towards peace-keeping operations. Meanwhile, there had also been a significant increase in private capital flows to developing countries. The effect of these two trends could well be a further increase in the gap between the haves and the have-nots, because what was happening was a concentration of
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private investment in only 20 developing countries and the consequent marginalization of many others, especially in Africa. A new understanding was needed that reflected the reminder in UNESCO's constitution that peace could not be based exclusively on political and economic arrangements, but must be founded upon the intellectual and moral solidarity of mankind. A radical reversal was needed of the decline in ODA, and the development agenda had to be refocused to create strategic alliances among Governments, funding agencies donors, and civil society to include all in global economic development. Also required was a renewed relationship between funding and specialized agencies at the international level and closer inter-ministerial coordination at the national level.
JORGE LEMA PATINO (Bolivia) said the economic policy adopted by Bolivia in 1985 had restored macroeconomic balance and stability. The economy was experiencing transition, but was showing positive results. This stability had resulted in many positive things, including the increase of direct foreign investment. However, second generation reforms were needed to overcome acute levels of poverty.
VICTOR RODRIGUEZ CEDENO (Venezuela) said implementation of current development policies would not be sufficient over the long term unless peace around the globe was more certain, the international economic system was more stable and predictable, and better access to world trade was provided for developing countries. Both countries and international organizations had clear and unavoidable responsibilities that had to be met; industrialized countries needed to harmonize and stabilize their macroeconomic policies and to increase flows of official development assistance to developing countries. Venezuela had undertaken strict and wide-ranging reforms for macroeconomic stabilization and structural change, including extensive reform of the national legal system; there had been a corresponding large increase in direct foreign investment, a fall in inflation, and improvements in employment levels; the process of privatization of iron, steel, and aluminum industries was in its final stages, and policies of flexibility in the labour market had been established. Declines in development aid should be reversed for many countries, and external debt burdens eased.
MOUNIR ZAHRAN (Egypt) said globalization was having negative repercussions on the enjoyment on economic and social rights of various peoples. There had also been an increase in marginalization. Egypt was concerned about this, as well as various other trends which threatened accomplishments in an underdeveloped and overpopulated world which was weighed down by foreign debt. Africa, for one, was being bypassed by the economic revolution. There was a lack of equity that could lead to very serious crises in fragile economies. Reform was also needed within the United Nations because the world did not want the strong to impose their criteria on United Nations activities. Developing countries were devoted to economic reform, but there was a need for political will from developed countries to carry out
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their commitments. Egypt was worried that while the commitments of the developing world within the framework of the World Bank and the WTO were dealt with strictly, the undertakings of developed countries in areas like technology transfer were dealt with in a lax manner. The solution lay in implementing a partnership between the two groups of countries.
MICHAEL BARTOLO (Malta) said the country's continuing economic transformation had been helped by necessary investments and a successful liberalization process, and it felt bound to press for an international environment that fostered development for all countries. A serious problem that had to be addressed was the disparity between the authority and influence of the Council and the greater authority and influence of the Bretton Woods institutions in the area of financial flows and policies regulating such flows; a reformed Council must come closer to those institutions -- the IMF and the World Bank -- which had such a major role in fostering an enabling environment for development. Only then would the Council be in a position to foster such an environment itself. An area where the Council could play an immediate role, meanwhile, was in monitoring the effects of sanctions on innocent people, including children, women, and the aging. The whole question of the negative impact of sanctions should be considered by the General Assembly. In its quest for relevance, the Council should not forget the conditions of day-to-day living for millions of people.
EJOH ABUAH (Nigeria) said Nigeria's experience had clearly demonstrated that the problems and challenges of development existed at two levels -- domestic and international -- and attention to both were vital and indispensable. Nigeria had taken major domestic steps to foster its own development, including reduction of its Government deficit, establishment of vigorous and transparent guidelines for its stock market, taming of inflation, development of a more conducive environment for trade and foreign direct investment, and creation of greater stability in its financial sector. But several factors in the external environment presented formidable challenges, including debt overhang, restricted market access in areas of export interest to developing countries, non-tariff barriers to trade, declining capital flows, and commodity price instability. For developing countries to reap the fruits of their own economic reforms, urgent and adequate solutions to these international problems had to be found. The external debts of African developing countries and the negative flows of resources resulting from servicing those debts deserved special attention.
MULUME MARUME (Democratic Republic of the Congo) said the United Nations knew of the problems of war and refugees in the Democratic Republic of the Congo. However, changes and reforms had already begun in the country. And yet, they could only produce positive results if they had the support and encouragement of the international community. The Democratic Republic of the Congo made an ardent appeal for assistance towards the reconstruction of the country. It was up to developing countries to take steps to create an
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enabling environment such as fostering human rights, encouraging transparency in the sale of arms and supporting all political initiatives for the resolution of disputes. The international community should also play its role in the major challenge of establishing sustainable development.
P.N. SINYINZA (Zambia) said that Africa as a whole was a recipient of a negligible share of global foreign direct investment flows, although it faced the highest risk of marginalization. This was despite efforts of countries, including Zambia, which had created the appropriate enabling environment through liberalization and highly attractive incentives. At the same time, an enabling environment for African development should include enhanced access to the markets of industrialized countries; technology and information transfer; and a durable solution to the region's unsustainable external debt burden. One obstacle to investment and trade in Africa was the negative image and unrelenting stereotyping perpetuated by the media in some industrialized countries. There was a need to take a differentiated look at Africa, examining each country on its own merits.
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