PRESS BRIEFING SPONSORED BY DEPARTMENT OF ECONOMIC AND SOCIAL AFFAIRS

Press Briefing

PRESS BRIEFING SPONSORED BY DEPARTMENT OF ECONOMIC AND SOCIAL AFFAIRS

The current Asian crisis was a very clear indication of the importance of social development for good economic development, the President of the International Council on Social Welfare (ICSW), Julian Disney, told correspondents at a Headquarters press briefing yesterday afternoon, sponsored by the Department of Economic and Social Affairs. The crisis had shown the relevance of one of the driving themes of the World Summit for Social Development (Copenhagen 1995), he said. Namely, that "if you don't get social development right, and if you don't have proper democracy and honest government, you hurt not only your citizens but also the economy".

The Managing Editor of the 1998 "Social Watch" report, Roberto Bissio, joined Mr. Disney to speak about activities by the respective non-governmental organizations in connection with follow-up to the Summit. They were introduced by Emmanuel Yao Ngoraw, Social Affairs Officer and the Department's focal point for non-governmental organizations.

Mr. Disney said the ISCW had been pushing for an international economic environment that was more conducive to genuine, productive, sustainable economic activity, rather than short-term "get rich quick" and "get poor quick" economic behaviour. That included efforts to restrict excess volatility in international financial markets and to ensure proper tax systems. The ICSW was also keen to help strengthen international systems which govern businesses activities, to ensure fair and free competition.

He said the ICSW had focused on trying to strengthen regional inter- governmental groupings, which had the potential for better international governance, as long as they gave enough attention to social matters, not just short-term economic development. A key aspect of the Social Summit was its emphasis on eradicating absolute poverty and reducing relative poverty around the world. So many issues, including that of participation, which was the theme of the current meeting of the Commission for Social Development, were caused by poverty.

Introducing the 1998 Social Watch report, Mr. Bissio said 35 "Social Watch" organizations from around the world had contributed national reports on what their governments were doing to fulfil their Summit commitments. The report contained charts showing the results in each country compared with pre- defined goals. The aim was to promote political will, commitment and civil involvement around the goals of the World Summit. In many countries, the launching of the Social Watch report was an opportunity for a round-table dialogue between government representatives and non-governmental organizations working on social development issues. When such a dialogue was not possible, the press played a major role in highlighting the efforts of national groups and assessing government achievements.

Governments were responsible for setting target dates for achieving the Summit's goal of eradicating poverty and that often made it difficult to evaluate national progress, he said. The report found an "outrageous lack" of available data on social conditions. Many governments and international agencies were making efforts to eradicate poverty, but their plans were being implemented without the comparable data necessary to measure actual progress.

The report indicated social development progress, or lack of it, and trends in 140 countries, he continued. In 70 countries, there had been sufficient progress to achieve national commitments by the year 2000. On the other hand, there had been insufficient progress in 70 other countries where extra effort was needed. By monitoring results and focusing public attention on the progress or lack of it, the report should stimulate governments to implement their Social Summit commitments.

Mr. Bissio said it was important to take into account the social development implications of many of the commitments that tied countries to economic or trade policies imposed by international institutions. For example, as a result of the current Asian crisis, countries that had experienced economic growth now risked losing all their gains in a matter of weeks. The impact of government budget cuts on vulnerable groups was worrying non-governmental organizations. Hopefully, the international institutions and the Commission for Social Development would take those implications into account.

Given the economic crisis in Asia, what advice did the two speakers have for members of the Bretton Woods institutions who were attending the current meeting of the Commission for Social Development? a correspondent asked. Was there a risk that their normal procedures could set social development goals back, not just in Asia, but around the world?

In response, Mr. Disney said the International Monetary Fund (IMF) -- as distinct, to some extent, from the World Bank -- was applying a "one size fits all" policy in Asia where the problem was not a result of the government deficits and debt found in other parts of the world. Private sector behaviour and government cronyism had caused the Asian crisis.

Although the current situation might appear to be a "high point" of IMF power, in actual fact, it appeared to have peaked, he continued. In the United States and Europe, a developing coalition from the right and the left was questioning the IMF modus operandi. When examining the Bretton Woods institutions, it was important to include the World Trade Organization (WTO) as it could become even more powerful than the IMF. It should, therefore, be brought into the general system of international governance, rather than being largely independent.

Mr. Bissio said it was "outrageous" that IMF money was being used to bail out big banks and corporations. Their losses were being socialized and

Social Affairs Briefing - 3 - 12 February 1998

the public would have to bear the cost. No one was bailing out small businesses, farmers and millions of workers. In the last six weeks, at least 3 million Indonesians had lost their jobs and there was no support for them.

A major social drama was unfolding, he continued. The decision of the Philippines to impose a 25 per cent cut in the budgets of all public offices and institutions would have an enormous impact in such areas as health and education, and on the fate of a whole generation of children. Yet, the crisis was not a result of government deficits, but had originated in the private sector. Countries, which, a few weeks ago, were being held up as economic models, were now being criticized for not "opening up" their economies enough. The whole spirit of the Social Summit was to place the economy at the service of the people. Now, that spirit was being reversed.

* *** *