SECRETARY-GENERAL STRESSES UNITED NATIONS INVOLVEMENT IN DISCUSSIONS ON NEW WORLD `FINANCIAL ARCHITECTURE'

25 September 1998

Press Release
SG/SM/6719

SECRETARY-GENERAL STRESSES UNITED NATIONS INVOLVEMENT IN DISCUSSIONS ON NEW WORLD `FINANCIAL ARCHITECTURE'

19980925 UN, `The Universal Institution', Has Responsibility to Stress Global Nature of Present Crisis, Kofi Annan Says at Group of 77 Ministerial Meeting

Following is the statement of Secretary-General Kofi Annan to the annual ministerial meeting of the "Group of 77" developing countries and China, in New York today:

I am honoured and delighted to be with you. You all know how much we, in the United Nations Secretariat, value the contribution which the Group of 77 and China make to the work of the Organization, especially in the area of development.

This year, it gives me particular pleasure to acknowledge the leadership which your Group has received from Indonesia. Working with Foreign Minister Ali Alatas and with Ambassador Makarim Wibisono is always enjoyable. They deserve special thanks from all of us for the time and effort they have devoted to chairing the Group of 77 in a year which has been one of the most difficult in their country's history.

Thanks to them and to their Tanzanian predecessors, there has been excellent cooperation between us over the past year. I look forward to building on it in the year ahead.

In particular, the Group of 77's constructive involvement has been crucial to the success of United Nations reform. Together we have achieved a great deal and, as I told the General Assembly on Monday, the United Nations family has now begun to act with greater coherence and unity of purpose.

It is true that some of our most urgent problems remain unresolved, especially the financial ones. And there is still much to be done to carry the reform forward. We can say proudly, however, that the United Nations is regaining its voice -- notably on the economic issues which are central to our mandate.

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I would mention as examples the constructive debates we had in the Economic and Social Council meeting with the Bretton Woods institutions on 18 April, the high-level segment of the Economic and Social Council on market access, last week's high-level dialogue in the General Assembly on globalization, and the ongoing discussions on finance for development.

I think most people now expect the United Nations to be involved in discussions on the new world "financial architecture". It is my hope that we will be.

Why? Because we have a responsibility, as the universal institution, to stress the global nature of the present crisis -– and to insist on the need for global solutions, based on global rules that are fair to all.

It is our job to ensure that nations do not react to global crisis by turning their backs on universal values. In such crises we must come together to find solutions based on the founding principles which all our Member States have in common: those of the United Nations Charter, and the Universal Declaration of Human Rights.

We also have a special responsibility to speak up for the disadvantaged. We cannot forget, and we must not allow others to forget, the countries in Africa and elsewhere whose debt burdens the crisis has made even more unsustainable.

But, once we secure our place at the table, what in substance will we have to say?

First of all, the present crisis is not financial only. It has disastrous consequences for millions of people in their everyday lives. Years of efforts are being undone.

Secondly, we have to find better ways to protect those being left behind by globalization, as well as those victimized by it. Our goal is to eradicate poverty. Yet, the brutal truth is that this year poverty is increasing.

Thirdly, in these circumstances a genuinely free market, governed by clear and equitable rules, becomes even more important. It is vital that industrialized countries make greater efforts to ensure that their markets are fully and genuinely open to exports from developing countries.

Fourthly, I share the concern, expressed in your draft declaration, about the gap between the impressive commitments made at a series of major international conferences and the declining resources available to implement them.

As I told the General Assembly, we have to define the political and institutional framework within which economic and financial strategies can be

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applied. And we have to ensure that States are strong enough, individually and together, to manage the strains of globalization. That means, among other things, that we must help States to govern in a way that commands the confidence and support of their own citizens, and attracts some of the best and brightest young people into public service.

We also have to agree on realistic development objectives. In the report which I propose to submit to the Millennium Assembly in two years' time, I aim to define some very clear and specific ones. Progress in achieving these must be measurable, and it must make a difference that poor people throughout the world can actually feel in their own lives.

In this context, I welcome your decision to hold the South Summit in the year 2000. I am sure it will produce many valuable ideas, and I trust you will choose a date early enough for those ideas to feed into the Millennium Assembly.

There is no doubting the gravity of the crisis. But, rather than despair, let us treat it as an opportunity.

We must make the case that it gives a new urgency to the issue of debt relief. We can argue that it obliges us to reinvigorate, or even reinvent, development cooperation, as an effective weapon in the battle against poverty.

On Wednesday, I had a most encouraging meeting with donor countries, grouped in the Organisation for Economic Cooperation and Development (OECD) Development Assistance Committee (DAC), to follow up on my Africa report. I am delighted to say that they, uniformly and strongly, endorsed my call for action in five priority areas:

-- To increase the volume and improve the quality of official development assistance to Africa;

-- To convert all remaining official debt owed by the poorest African countries into grants;

-- To liberalize access to the Highly Indebted Poor Countries (HIPC) Debt Initiative;

-- To open markets to, and ease terms of access for, African exports; and -- To encourage investment in Africa.

Of course, we must not forget that there are some very poor countries in other continents besides Africa. Those, in Asia, are perhaps suffering most from the present crisis because they have lost investment flows from other Asian countries. Those, in Latin America, have been hit by falling commodity prices.

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Nor must we forget that there are many very poor people in countries which do not qualify as "least developed", but whose development has suffered a severe setback. For them, the hope of relief must now seem further off than ever.

But the success of the DAC meeting on Africa shows that the gravity of the crisis is helping us get more serious attention for the problems of the poorest. Our task now is twofold: to translate that attention into action, and to widen it to take in the developing world as a whole.

The complexity of the crisis in Asia and the direct and indirect impact on Latin America and elsewhere defies a simple one-for-all prescription. We need to formulate a graduated response -- region by region, country by country -- which matches the magnitude and diversity of the crisis itself.

In that vital task, I know I can count on your help.

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