PRESS BRIEFING ON ECONOMIC AND SOCIAL COUNCIL HIGH-LEVEL MEETING

Press Briefing

PRESS BRIEFING ON ECONOMIC AND SOCIAL COUNCIL HIGH-LEVEL MEETING

At a Headquarters press briefing this morning, Under-Secretary-General for Economic and Social Affairs Nitin Desai told correspondents that the high- Level meeting of the Economic and Social Council to be held tomorrow, 18 April, would be an attempt to bring together United Nations discussions on development issues with discussions on financial matters by the Bretton Woods institutions and leaders of finance, foreign affairs and development ministries.

"Our purpose in the United Nations is not to do the type of detailed negotiations of financial arrangements that could only take place in the relevant financial forums, but to inject into those considerations the type of long-term development considerations that do play a prominent role here", Mr. Desai stressed. The Organization's focus has been on issues such as equity, vulnerable groups, long-term development and fair-sharing of globalization's benefits and burdens. That focus had been quite prominent in the Organization's work and it had contributed to global development through work done in those areas.

Providing a political platform for discussion and consensus-building was the Organization's business, he said, expressing the hope that the culture of consensus-building and dialogue that had been built up in the developmental work of the United Nations in the past five years would start to have a beneficial influence in other areas. The purpose of the high-level meeting was a very modest one, aimed at encouraging a contact between two different ways of approaching development.

Francesco Paolo Fulci (Italy), a Vice-President of the Council, said tomorrow's meeting, which he would be chairing, would be part of the effort to revitalize the Council. "We believe that this can be done -- we do not agree with those who think that because the Economic and Social Council has become so huge it cannot work any longer." He stressed that the meeting was an open dialogue and would have no formal outcome. There would only be a formal statement by the President of the Council.

Mr. Fulci told correspondent that in 1996, the General Assembly decided that communication and cooperation at the intergovernmental level between the Council and the international financial and trade institutions had to be improved -- not at the bureaucratic level, but at the ministerial level. The Council was invited to periodically schedule a high-level meeting close to the semi-annual meetings of the Bretton Woods institutions. The purpose would be to take advantage from high-level participation by ministers, heads of financial and trade institutions and other relevant organizations.

The meeting tomorrow would be the first attempt in the United Nations history at concrete collaboration between the Council and the Bretton Woods institutions, and also bringing together ministers and high-level officers

from the world of finance on one side, and development cooperation on the other, Mr. Fulci continued. The theme of the meeting was "Global Financial Integration and Development and Recent Issues". A free-flowing dialogue was expected on the opportunities, challenges and risks posed by global financial integration. It was also hoped that the event would be the beginning of a regular dialogue between the United Nations and the Bretton Woods institutions.

The theme of the meeting involved the strong increase in private international flows to developing countries over the past years and the proliferation in agents, types and modes of such flows that had brought about an unprecedented degree of financial interdependence, he continued. The experience of East Asia was significant in that context because it showed the positive contribution of financial globalization to development, and at the same time the risks and challenges that it posed.

The most important feature of the meeting would be the Secretary- General's address, Mr. Fulci said. The panel would consist of eight members, as follows: Finance Minister of Malaysia and Chairman of the Development Committee, Anwar Ibrahim; Deputy Prime Minister and Minister for Finance of Belgium, and Chairman of the International Monetary Fund (IMF) Interim Committee, Philippe Maystadt; Minister for Finance of Algeria and Chairman of the Group of 24, Abdelkrim Harchaoui; President of the Central Bank of Venezuela and former Chairman of the Group of 24, Antonio Casas Gonzales; Secretary of State for International Development of the United Kingdom, Clare Short, on behalf of the Group of 10; Minister for Finance of Indonesia and Chairman of the "Group of 77" developing countries, Fuad Bawazier; Vice- Minister of Finance of Colombia and Chairman of the Non-Aligned Movement, Eduardo Fernandez; and Chairman of the Organization for Economic Cooperation and Development (OECD) Development Assistance Committee, James Michel.

Mr. Fulci informed correspondents that the Managing Director of the IMF, Michel Camdessus, and the Managing Director of the World Bank, Sven Sandstrom would also be attending the meeting and contributing to the dialogue. The Vice-President of the Council said that he would also moderate the debate, unless the Council President, Juan Somavia (Chile), joined the meeting. After the meeting the Secretary-General would host a working luncheon for all the Ministers participating.

Mr. Desai said that the meeting would be broken up into four parts. Philippe Maystadt and Anwar Ibrahim would begin the debate to be followed by a discussion with other Ministers present. He stressed that there would be a lot of other Ministers besides the panellists. Besides the panel and based on present information, he understood that at least 30 countries were sending other representatives at ministerial and very high financial levels. More were expected, he added. The panel discussion would then move on to the second segment chaired by Abdelkrim Harchaoui and Clare Short.

ECOSOC Briefing - 3 - 17 April 1998

After the discussion on the second panel, the debate would move on to the third segment chaired by Fuad Bawazier and James Michel, Mr. Desai informed correspondents. The final session would be chaired by Eduardo Fernandez and Antonio Casas Gonzales. It was hoped that the format would be a little more lively and that there would be a certain amount of interaction and interchange. The purpose of the meeting was to try and get a dialogue at intergovernmental levels among the people who represented countries in the funding bank process and the people who represented countries in the United Nations development process. There was already a lot of interaction at the Secretariat level. The meeting would be trying to see if a sense of dialogue at intergovernmental level could be created.

Mr. Desai said that the theme of global financial integration and development had been chosen before the Asian financial crisis. However, that crisis now seemed very topical since the decision to pursue the current theme. The note by the Secretary-General (document E/1998/9) was basically a broad structure for the discussion tomorrow in terms of the challenges faced due to growing integration of the financial systems of countries. The note raised a number of issues: the challenge of the national economic and financial policy framework -- the national environment; the problem of monitoring and oversight at both national and global levels; and the problem of standing contingency arrangements to respond to crises. Those were all issues which would be relevant whether there was an Asian financial crisis or not.

The note also identified issues which were relevant in terms of how a crisis would be tackled if it arose as was the case now, Mr. Desai continued. Those issues were: sharing risks and responsibilities between borrowers and lenders -- how could collateral damage be taken care of in countries which might not directly be involved but could be affected by what was happening in financial markets; protecting vulnerable groups; and safeguarding long-term development. Within that framework was an intent to marry the types of development issues on which the United Nations focused. He hoped the dialogue tomorrow would lead to something that would be positive both for the Organization's developmental process as well as the ongoing discussions on global financial integration.

Mr. Fulci told correspondents that the following countries were sending ministers to tomorrow's meeting: Belarus, Central African Republic, Italy, Latvia, Lesotho, Pakistan, Poland, Sweden, Turkey, Croatia, Morocco, Norway, Netherlands and South Africa. There was also a number of high officers, Principals, Secretaries Advisers and Director Generals from 20 other countries expected.

Asked if there would be any subsequent follow-ups to tomorrow's meeting which had taken two years to get started and if so whether they would move in tandem with the semi-annual meetings of the World Bank and the IMF, Mr. Desai said that at the moment, the mandate was just for this meeting. A lot would depend on whether people considered it a useful and valuable exercise.

ECOSOC Briefing - 4 - 17 April 1998

Subsequent to the decision to hold tomorrow's meeting, the Assembly had also launched a process on finance for development. The Second Committee (Economic and Financial) had met a few weeks ago and in the upcoming General Assembly a working group would be set up to examine the possibility for such types of follow-up meetings.

If the decision to organize the high-level meeting was taken because of mechanisms needed to be coordinated and corrected, could that be defined in light of the fact that the policies between the financial managers, United Nations and the IMF were going in opposite directions? a correspondent asked. Mr. Desai said there was a lot of dialogue now about the architecture of the financial system. At the Group of 24 meeting in Washington. D.C. and the Interim Committee meetings taking place now, there was a great deal of discussion going on the same themes.

Those were not the only groups, he added. There were other processes going on. There was a sense that there was a problem that needed to be addressed. There was also a sense that the problem could not be addressed simply in terms of managing the financial markets. It had to be linked with issues of long-term development -- an area in which the United Nations had made very valuable and important contributions, particularly over the past five years through its focus on sustainable and human development.

In many ways the whole question of a solution which was acceptable to a broad range of countries was perhaps a bit more prominent and manifest in the United Nations than anywhere else, Mr. Desai continued. The meeting tomorrow was something which was being done for the first time. It did not represent a difference of views between the Organization and Bretton Woods institutions, but was more a question of how the strands of policy development and dialogue which took place could be brought together.

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