UNITED NATIONS REFORM MUST TACKLE INADEQUACY OF RESOURCES FOR DEVELOPMENT, ECONOMIC AND FINANCIAL COMMITTEE TOLD

Press Release
GA/EF/2760

UNITED NATIONS REFORM MUST TACKLE INADEQUACY OF RESOURCES FOR DEVELOPMENT, ECONOMIC AND FINANCIAL COMMITTEE TOLD

Settling the serious inadequacy of development resources was an important component of United Nations reform, the representative of China told the Second Committee (Economic and Financial) this afternoon, as it continued its general debate on the world economic situation.

The increasing shortage in development resources had long been a problem without a solution, he continued. It was necessary to include the question of resources as part of the overall consideration of reform to ensure a reliable and stable basis for resources for development.

The representative of India called on the international community to assess the role of the United Nations in creating an economic environment conducive to sustained economic growth, particularly in developing countries. That would ensure the availability of resources for investments in the social and environmental sectors and for poverty eradication.

Malaysia's representative called for safeguards to ensure that financial openness did not marginalize domestic financial institutions and destabilize a country's financial system. While Malaysia would continue its process of liberalization, it attached great importance to the efforts of the World Trade Organization (WTO) in developing rules for emergency safeguards.

The neighbours and major economic partners of countries affected by economic sanctions should share the burden caused by those sanctions, the representative of Turkey said. Turkey had been directly and adversely affected by sanctions, which, while politically motivated, had taken a heavy toll on his country's economy. The representative of Cuba said neo-liberalism had led to a 4 per cent increase since 1980 in the number of households in Latin American and the Caribbean living in poverty. The region had also experienced increases in the infant mortality rate and the index of illiteracy.

Statements were also made by the representatives of Tunisia, Marshall Islands, Viet Nam, Morocco and Belarus. The Committee will meet again at 10 a.m. Tuesday, 14 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

ABDERRAZAK AZAIEZ (Tunisia) said it was important to recognize that globalization and its effects had had positive effects and might lead to the advancement of a favourable environment for development. Globalization had contributed to the speeding up of the universal integration of markets to goods, services, capital and technologies. It had also led to the strengthening of the interdependence of States and sped up macroeconomic decisions and measures adopted by developed countries on the domestic level, which also had decisive effects for the rest of the world. Having the ability to react to those trends required the maintenance of an economic climate favourable to growth, especially in the South. But the repercussions of globalization on developing countries were in sharp contrast to each other. A number of developing countries had experienced rapid economic growth, while other developing countries had been shut out of the process of globalization. The world continued to be racked with imbalances and uncertainties which supported the interests of the developed countries.

Regarding the minimum conditions required for the successful integration of developing countries on a global level, he said that the policies of liberalization had, in several ways, played the role of catalyst in increasing trade. However, that dynamic process could not be kept moving without pursuing the liberalization of trade systems and promoting a multilateral trade system which was open and reliable.

In that context, he went on, the agreements concluded within the World Trade Organization (WTO) were of particular importance, particularly the machinery set up for the settlement of disputes. Concerning commodities, the international community should work to improve the operation of markets through transparency, stability and increased predictability. Developed countries should also respond favourably to calls for technical assistance. In addition, it was important to turn back the current decline in public assistance for development and reach the targets agreed upon by the international community.

ESPEN RONNEBERG (Marshall Islands) said there was a major lag between what was required by the international community and what the international community was allowed by consensus to accomplish. He cited, as an example, negotiations under the United Nations Framework Convention on Climatic Change during which some parties employed obstructionist tactics to promote their interests.

Second Committee - 3 - Press Release GA/EF/2760 4th Meeting (PM) 13 October 1997

Recalling the loud demands for impartiality even in the early days of the global warming debates, he said some countries were trying to avoid taking measures required to address the problem, even as scientists continued to provide hard evidence about global warming. He called such practice a sad reflection of the state of cooperation in the international community, as well as an ominous reminder of the practices that were in place before the United Nations Conference on Environment and Development (UNCED) (Rio de Janeiro, June 1992).

NGO QUANG XUAN (Viet Nam) said the processes of globalization and regionalization, based on trade liberalization, had helped to expand the world markets, increase the flows and circulation of capital and promote technology transfers. That had created an environment which was conducive to more economic interaction and cooperation at both global and regional levels. Yet, the impacts of globalization, its benefits and adverse consequences had not been distributed equally. More often than not, developing countries had become more marginalized and often were denied access to the benefits of globalization. The capacity to join the world markets and to seize the chances for development became especially more difficult when accompanied with the increasing burden of debts and debt-servicing and faced with decreased official development assistance (ODA), as well as enhanced protectionism, discrimination and conditionalities imposed upon international economic cooperation and relations.

He called on developed countries to make greater efforts in fulfilling their standing global responsibility to accomplish current commitments, especially those made at recent international conferences. The ongoing efforts of the developing countries in economic reforms and adjustments needed to be supported, through the provision of greater assistance in terms of investment, capital, technology and other resources and measures of debt relief. At the same time, it was necessary to take measures to ensure market access for the commodities, products and services of those countries.

He called for the reversal of the tendency of decreasing ODA and confining foreign direct investment to a limited number of countries. He also called for the abolishment of conditionalities in international economic cooperation. The North-South dialogue must be revitalized in order to strengthen international economic cooperation through partnership and to provide the international community with a better position to jointly address the acute global problems and challenges it faced.

BURAK OZUGERGIN (Turkey) said the challenge before the international community was to improve the effectiveness of the economic and social activities of the United Nations by harmonizing its programmes and those of other multilateral organizations to achieve sustainable development. Development should be the primary responsibility of developing countries themselves and that would require sound and sustainable management of human and natural resources, and especially good governance.

Second Committee - 4 - Press Release GA/EF/2760 4th Meeting (PM) 13 October 1997

Drawing the Committee's attention to the negative effects of economic sanctions on the economies of third countries, he called for equitable sharing of the burden of economic sanctions among neighbours or major economic partners of target countries. Turkey stood at the forefront of those countries which had been directly and adversely affected by sanctions. While politically motivated, sanctions against third countries could take a heavy toll on their economies.

MOHD SHAFIE BIN HAJI APDAL (Malaysia) said there had been serious concerns that the financial crisis in South-East Asia could make many countries in the region hesitant about financial liberalization. Financial liberalization must not be viewed as a one-way traffic allowing only rich industrialized countries to benefit. An avenue must be provided for developing economies to mature, progress and protect their interests.

He called for the promotion of strong safeguard mechanisms to ensure that financial openness did not marginalize domestic financial institutions and destabilize a country's financial system. Malaysia attached a lot of importance to the efforts of the WTO to develop a set of rules for emergency safeguards. Malaysia would continue its process of liberalization, he concluded.

QIN HUASUN (China) said it was essential to fully realize the importance of international development cooperation to all countries, which was a major issue that bore on the future and destiny of the world. It was necessary to establish a global partnership based on the principles of mutual benefit and common but differentiated responsibilities to promote common prosperity and development of developing and other countries in the world. Trade discrimination and unequal exchanges should be opposed. No country should use its strength or wealth to bully the weak or the poor, or impose sanctions against other countries at will. It was also necessary to strengthen cooperation and increase the effective participation of developing countries in the field of macroeconomic policies that had an important impact on the world economic situation.

The United Nations role in promoting international development cooperation should be strengthened, he said. Efforts should be made to translate the consensus on international development cooperation into action, with the implementation of the "Agenda for Development" and the review of the outcome of major international conferences serving as the motivating force. Strengthening the role of the United Nations in promoting international development cooperation was closely linked to the current reform process. Reforms should reverse the trend of that inadequate attention that was devoted to the question of development in the actual operation of the United Nations. It should also help strengthen the Organization's function and role in the field of development, particularly its role in promoting the implementation of the relevant international commitments.

Second Committee - 5 - Press Release GA/EF/2760 4th Meeting (PM) 13 October 1997

Effective settlement of the serious inadequacy of development resources was also an important component of reform, but the increasing shortage of development resources had long been without a solution, he said. It was necessary to take the question of resources into overall consideration as part of reform, so as to ensure a reliable and stable basis for resources for development.

AHMED AMAZIANE (Morocco) said that in a world that had been moved by the unbridled pursuit of short-term gain, the distribution of goods, both nationally and internationally, had shown that inequalities among and within nations had worsened. Twenty per cent of poorest individuals today shared the miserable sum of 1.1 per cent of world revenue. The eradication of poverty in the world was not an impossible undertaking, if all countries were motivated by a sense of solidarity with all of those people in the world. The international community should join together and take the necessary steps to ensure that in the near future poverty would be relegated to the forgotten pages of history.

The reduced production in countries with economies in transition and increased unemployment in developed countries were causes for concern because of their negative impact on developing countries, he said. While his Government welcomed the record sum of foreign direct investment, which would support economic growth and lay the basis for lasting development, that investment unfortunately focused on only a small number of countries. Official development assistance (ODA), upon which many African countries depended, now represented only 0.25 per cent of gross national product (GNP) of donor countries.

The drop in ODA, he continued, had coincided with the end of cold war, which had led his Government to conclude that the existence of ODA was merely part of the East-West rivalry. Currently, 51 developing countries were still recognized by the World Bank as heavily indebted countries. The initiative for heavily indebted developing countries by the International Monetary Fund (IMF) and the World Bank was welcome, but its responses needed to be rapid and flexible in order for it to benefit the greatest number of countries.

ALYAKSANDR SYCHOU (Belarus) said aspects of conditions in the world continued to worsen, including the environment, poverty and the spread of disease. In addition, the process of economic liberalization had increased the vulnerability of the economies of certain countries. It was important to utilize all instruments and bodies of the Untied Nations to find a solution to address the ever-widening gap between rich and poor within and among countries. His Government supported the reform measures proposed by the Secretary-General, particularly proposals regarding the management and structure of the work of the Organization.

Economic policies in Belarus had allowed the country to look towards the future with optimism, and current predictions provided for an increase of

Second Committee - 6 - Press Release GA/EF/2760 4th Meeting (PM) 13 October 1997

industrial production, he said. However, his Government still needed to cope with a number of difficulties, and it was interested in receiving further assistance from organizations of the United Nations system, particularly in economic restructuring and the formation of a favourable investment climate promising for foreign investors.

A major problem which remained was the sale of the country's production, he said. One of the most important factors for the basis of stable production was the establishment of favourable conditions for the export products. That could be achieved by integration into the WTO. The technical assistance provided to economies in transition by the United Nations Conference on Trade and Development (UNCTAD) and other United Nations bodies was also of particular importance.

MIRTHA HORMILLA CASTRO (Cuba) said 1997 marked the passing of 15 years since the beginning of the so-called foreign debt crisis, and neo-liberalism had been the dominant economic policy in the international arena during those years. The combination of neo-liberalism and globalization had had discouraging results for a majority of countries in the third world. Powerful State enterprises had been put in the hands of massive transnational organizations at tremendous costs. Financial deregulation had led to such phenomenon as the "tequila effect" and the current crisis in South-East Asia.

Also, she went on, globalization had exaggerated financial capital, thereby distancing it from the real economy. Neo-liberalism had had the most brutal impact on the 210 million Latin Americans and Caribbeans that live in poverty. There had been a 4 per cent increase in the households living in that condition since 1980, and, of those households, 17 per cent lived in absolute poverty. The rate of infant mortality in the region had risen to 45 per 1,000 live births, and the index of illiteracy had reached 15 per cent. It was absurd that while some boasted of and benefited from the information revolution, millions of illiterates could not even imagine how their lives could be managed and molded by the satellite centres of the developed west.

Only the United Nations could deal coherently with the major problems that were part of today's unequal world, which did not provide for a promising future for hundreds of millions of people, she said. The areas of trade, financing, technology and investment must be dealt with simultaneously in the political discussions of the General Assembly. The high-level dialogue of the last session of the Economic and Social Council had agreed on the importance for the United Nations to gain greater attention and to become more involved in the decision-making process on those issues. The United Nations was the highest-level political intergovernmental forum and, above all, it was the most democratic forum which existed. Her Government hoped that the current session of the Assembly would contribute to forging a new path for the work of the Second Committee.

Second Committee - 7 - Press Release GA/EF/2760 4th Meeting (PM) 13 October 1997

MARGARET ALVA (India) said while developing countries were increasingly emerging as locomotives of world economic growth, they had not been fully involved in rule-setting or decision-making processes. Most developing countries continued to experience poverty, lack of adequate infrastructure, human resource development and technological advancement. The international community needed to debate and assess the role of the United Nations in effectively facilitating the creation of an economic environment conducive to sustained economic growth, particularly in developing countries, to ensure the availability of resources for investments in the social and environmental sectors and for poverty eradication. The United Nations must be a facilitator of growth, development and prosperity that was equitably shared among nations.

Drawing attention to the debt burden of developing countries, she said beyond the human cost, debt had created serious obstacles to economic growth, soaked up a fifth of export earnings, depleted their limited stock of foreign exchange and undermined their ability to engage in international trade on more equitable terms. What was required was a viable international consensus on strategies necessary to reduce the debt overhang of heavily indebted developing countries.

Developing countries also face unfavourable terms in the flow of manpower, with the preference for skilled and capital-rich migrants, she said. While globalization was premised on the need for a level-playing field, what was often ignored was not just the inequity of seeking a level-playing field among unequal players, but the creation and maintenance of rules of the game that were exacerbating inequalities and inequities.

* *** *