STRATEGY TO DEAL WITH WORLD FINANCIAL CRISIS MUST TAKE ACCOUNT OF MORE THAN NARROW NATIONAL AND POLITICAL INTERESTS, SECOND COMMITTEE TOLD
Press Release
GA/EF/2818
STRATEGY TO DEAL WITH WORLD FINANCIAL CRISIS MUST TAKE ACCOUNT OF MORE THAN NARROW NATIONAL AND POLITICAL INTERESTS, SECOND COMMITTEE TOLD
19981008 As Committee Discusses World Economic Situation, Speakers Call United Nations Best Place To Renew Dialogue on GlobalizationDevising a strategy to deal with the world financial crisis must take account of more than narrow national and political interests, the representative of Egypt told the Second Committee (Economic and Financial) this afternoon, as it continued its general debate on the world economic situation.
Developed and developing countries should form a partnership to control market forces and short-term factors that could affect the structure of the global financial system, he said. The growing complexities of the financial crisis offered few options to economic policy makers. No existing structure was designed to deal with its potential effects, as could be gathered from current World Bank and International Monetary Fund (IMF) meetings in Washington, D.C.
Several delegates stressed that the United Nations was best placed to renew the dialogue between North and South on globalization and its economic and social consequences.
The representative of the Russian Federation said the economic crisis made one ponder over the mistakes made not only in the management of his country's banking and financial system, but also over recent macroeconomic reform guided by the prescriptions of international financial institutions. "Shock therapy was not a panacea", he said. A well-balanced and more pragmatic approach that would flexibly incorporate market regulatory and State control mechanisms, as well as take into account specific social and political conditions in different countries was needed.
The representative of Lesotho said the further marginalization of least developed countries must be halted. They needed substantial increases in financial and technical assistance on preferential terms aimed at infrastructure development, telecommunications, capacity- and institution- building. Measures to help the least developed countries included the removal
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of textile imports restrictions from small exporters and the elimination of time-bound preferential treatment.
Statements were also made by the representatives of Ethiopia, Iran, United Arab Emirates, Bulgaria, Bahrain, Morocco, Mongolia, Colombia, Slovakia, Ukraine, Nigeria, Jamaica, Democratic People's Republic of Korea, Mali, Azerbaijan, Iraq, Niger, Israel, Peru, Paraguay, Panama, Republic of Moldova, Madagascar, Syria and Cameroon.
A representative of the World Meteorological Organization also spoke.
The Committee will meet again on Friday, 9 October, at 9 a.m., to conclude 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.
BERHANU KEBEDE (Ethiopia), said it was not ethically acceptable or morally defensible to leave the vast majority of humanity to wallow in abject poverty in the face of surplus wealth and enough productive capacity. In Africa, particularly in the least developed countries, poverty was one of the major challenges in their protracted struggle for economic growth and development. Poverty was further exacerbated by the pressures of debt servicing, deteriorating terms of trade, declining official development assistance (ODA), falling commodity prices, increasing protectionism in developed countries and negative effects of structural adjustment programmes.
The Heavily Indebted Poor Countries (HIPC) Initiative needed significant revision if it was to help decisively in establishing the conditions for sustainable development, he said. There were concerns about the eligibility criteria, the adequacy of debt reduction, as well as the speed at which relief should be granted. Africa was home to 33 of the 48 least developed nations and should be first in line for debt cancellation, debt conversion and a revamped HIPC Initiative. Finance capital should be provided on a continuous, guaranteed and sustainable basis for reform efforts to succeed. The international community should recognize the role and importance of ODA in obviating costly bailout programmes. The decline in ODA and the negative transfer of resources from developed to developing countries must be arrested.
Long-time private capital flows were important for imparting dynamism and competitiveness in the economies of developing countries, he said. There would be no sustainable development in those countries without their effective participation or integration into the multilateral trading system.
ALBERT M. MUCHANGA (Egypt) said that if the crisis in capital markets worsened, it threatened the economic stability of developed and developing countries alike. The growing complexities of the crisis offered few options to economic policy makers. To address the possible marginalization of so many, he added, peace and security must be maintained, and providing that was the chief task of the United Nations.
Despite the fact that the financial crisis' potential effects were so clear, he said, there was no existing structure designed to deal with it, as one could gather by the current meetings of the World Bank and the International Monetary Fund (IMF) in Washington. Devising the proper strategy should take into consideration far more than narrow national and political interests. A partnership between developed and developing countries was required, so as to control market forces and the short term factors which could affect the structure of the global system in the long term. There was
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no international organ more able to help address this process than the United Nations. Therefore, a renewal of dialogue between North and South on globalization and its economic and social consequences should follow.
He said that Egypt has begun to address the issue with attempts to establish free trade zones and regions. He expected that by the year 2010 the European Union and southern Mediterranean States would see the fruits of such cooperative efforts.
SERGEY V. LAVROV (Russian Federation) said his Government supported the initiative of United States President Bill Clinton to galvanize the International Monetary Fund (IMF) anti-crisis mechanisms. The Russian economy had suffered its full share of negative consequences brought about by the financial crisis. From January to August, Russia's gross domestic product (GDP) dropped by 2.1 per cent, while its industrial output decreased by 2.6 per cent. Unemployment had risen; close to 30 per cent of all small business had either suspended operations or declared themselves insolvent. The current crisis could only be overcome through a national consensus on the need for consolidated efforts by all the major political parties. The new Russian Government was taking urgent measures to redress the social and economic situation. The measures aimed to stabilize the rouble's exchange rate, prevent illegal export of capital, reactivate the populations foreign currency cash reserves, revitalize the banking system, reschedule external debt, reform the taxation system, promote production and ensure social protection.
He said the crisis made one ponder over the mistakes made not only in the management of the country's banking and financial system, but also over recent macroeconomic reform, guided by the prescriptions of international financial institutions. "Shock therapy was not a panacea." A well-balanced and more pragmatic approach was needed that would flexibly incorporate market regulatory and state control mechanisms, as well as take into account specific social and political features of different countries.
He said while similar external factors influenced the evolution of the crisis in the Russian Federation and Asia, the transitional specificity of the Russian economy has not been taken into account by analysts, investors and financiers. The lack of consideration of such factors impeded timely measures that could have prevented the financial meltdown. Events demanded that economies in transition receive increased support, including through the United Nations. His delegation and other interested countries intended to present a draft resolution on the issue in the Second Committee.
MEHDI DANESH-YAZDI, Iran said that trade would be slower in 1998 than in the previous year, as a result of the financial crisis. According to United Nations estimates, global growth has decreased from 3.3 per cent in 1997 to 1.9 per cent in 1998. The prices of a number of commodities were depressed,
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crude oil suffering the sharpest decline. It was saddening that the net transfer to all developing countries shifted from an $8 billion inflow in 1996 to an outflow of $27 billion in 1997.
Powerful transnational forces were at work, he said, reshaping the key features of world markets in capital, goods, services, labour and technology. The inequality between nations had been increased and the gap between rich and poor was widening.
He said that the situation had led to a search for global solutions. Meaningful global partnerships were needed to strengthen economic cooperation and ensure that the benefits of the ongoing process of globalization were spread to the maximum extent possible, while minimizing and harnessing their adverse effects. He supported the Economic and Social Council's discussion on market access last July, which called for the establishment of an international trading system which was fair, just, rule-based, universal, multilateral and responsive. Unilateral corrective economic measures and enactment of domestic laws with extra-territorial effects has been on the rise, he said. Such measures contradicted international law, and also the goals and objectives for which the World Trade Organization was created.
AHMED AL-DHANHANI (United Arab Emirates) said the developing countries had seen their situation deteriorate because of their continuing debt burden, the flight of capital and falling commodity prices. The developed countries, particularly industrial nations, must ensure their participation in international treaties and their commitments to development assistance. They should help the programmes of developing countries aimed at assimilating foreign investment and gaining access to technology and ensuring integration into the global economy.
He said the agreements reached in Washington last year by the Bretton Woods institutions, including their plan to lighten the debt burden on developing countries was praiseworthy. They had also asked for more effective measures to address the debt of the least developed countries. It was important to reactivate involvement by the United Nations and its specialized agencies.
The United Arab Emirates had an economic policy based on the abolition of tariff barriers and openness to all foreign trade, he said. It also had a policy of helping the least developed countries implement their development plans. He expressed concern about the results of the illegal Israeli policy within the occupied territories including confiscation of lands and natural resources and flagrant violations of humanitarian and international law. Israel should assume responsibility for compensating the people of the occupied territories.
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VLADIMIR SOTIROV (Bulgaria) said seven years of political turmoil and the absence of will to support economic reform in Bulgaria had led to catastrophic political and economic crises at the end of 1996, to hyperinflation in early 1997 and, finally, to early general elections in April 1997. The new Bulgarian Government had introduced a currency board in July to help the country achieve financial stabilization. The confidence in the national currency had been restored. Interest rates had decreased and there were low monthly levels of inflation. He hoped that financial stabilization, advanced structural reform of the economy, strict adherence to tough budget restrictions as well as the restoration of confidence of the international financial institutions in Bulgaria would attract the serious attention of investors.
Bulgaria had suffered serious economic losses as a result of the strict implementation of sanctions against Iraq, Libya and especially the Federal Republic of Yugoslavia which were among Bulgaria's major economic partners, he said. The losses were enormous and commensurate to the country's foreign debt. Special economic problems created by the strict implementation of sanctions should be fairly shared by Member States. He insisted on the implementation of the provisions of Assembly resolutions urging organizations within the United Nations system, international financial institutions and other international bodies to address more specifically and directly the issue of economic assistance to third States affected by the implementation of sanctions.
AHMED AMAZIANE (Morocco) said that despite enormous progress, an overwhelming number of people around the world did not have access to adequate clean water, 1.3 billion lived in absolute poverty, 1 billion people were illiterate, 800 million suffered from hunger and ethnic and civil conflicts caused displacement for millions, most of whom were in Africa. Because of the financial crisis which had erupted in Asia, economic growth rates around the world would be lower than last year and would be lowest in the developing countries.
East Asian countries, including Indonesia, Thailand and Malaysia, would see an alarming increase in unemployment and underemployment, he said. Production in those countries would drop and the effects would have a negative impact on international trade, particularly for Latin American countries. The crisis, paradoxically, had strengthened the position of the Group of 77 developing countries and China. They wanted to strengthen international monitoring of macroeconomic development, regulate capital flows and address the foreign debt burden of developing countries. The fall in the level of official development assistance since 1992 coincided with the end of the cold war, and was continuing, despite commitments from industrialized countries. Africa still suffered from conflicts, external debt and poverty, all of which was increasing its marginalization.
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SHUKRI AL-QUASI (Bahrain) said that technological progress and the opening of financial frontiers created a potential for business, and also an opportunity for criminal networks to organize. Moreover, the very size of the flows of capital inherent to globalization increased the danger of allowing criminal networks to operate in the financial sphere.
He added that two-thirds of the world population would live in urban areas by the year 2025, and that the survival of those people was based on the security of their environments.
Bahrain, he said, believed in the principles of dialogue and economic cooperation. Therefore, development work should not be shouldered only by the United Nations, but by all the countries of the world.
DAMBA GANKHUYAG (Mongolia) said that many developing countries were being marginalized from the mainstream of world economic development. In light of the enormous changes in the international economic and political environments, South-South cooperation was undergoing major transformations. While some developing countries had been able to take advantage of the changing global circumstances, economic decline in many developing countries made that cooperation difficult. Self-reliance had become a vital instrument for those countries to assume greater responsibility for their own development.
He added that increased attention should be given to the serious situation of the land-locked developing countries. Handicapped by geographical location and remoteness from world markets, they faced tremendous obstacles and hardships in their efforts to advance hand in hand with the world's social and economic progress. The world community must help those countries address both the physical and non-physical barriers. There should also be greater attention given to the unprecedented increase in natural disasters and climate change. Proclaiming an international decade should be considered to keep a continued focus on those issues.
ALFONSO VALDIVIESO (Colombia) said the negative impact of the global financial crisis had revealed the urgent need for an in-depth revision of the global economic system. Individual governments were responsible for adopting economic, fiscal and monetary policies to maintain the macroeconomic stability indispensable to attracting foreign investment. However, the functions and objectives of the Bretton Woods institutions and the World Trade Organization must be revised. He expressed concern over the decreasing trend of ODA and stressed that foreign direct investment should not become a substitute for ODA.
He said it was important to move forward at a greater pace to overcome the problems of foreign debt. He hoped that the work of the Open-ended Working Group on Financing and Development would provide guidelines for
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solving many questions. The eradication of poverty must continue to be a United Nations priority. Activities for development would need both the necessary funds and better coordination among the various organizations of the United Nations system, including World Bank funds and programmes. He underlined the importance of transparency in the international trade system and better coordination between the WTO and the United Nations Conference on Trade and Development. He emphasized the need to keep and strengthen commercial mechanisms which favoured products from developing countries. The elimination of international trade barriers, both commercial and non-commercial, and the correction of any discriminatory and protectionist practices were also priorities.
DRAHOSLAV STEFANEK (Slovakia), said an open, multifunctional world economy was the best tool to take advantage of globalization. Despite recent failures, the benefits of globalization outweighed the risks. Globalization was a fact, not a choice, and everyone should make an effort to profit from the process. The marginalization of developing and least developed countries was a serious problem. High-level dialogue on the social and economic impact of globalization provided an opportunity to discuss those problems.
Slovakia was one of the founding members of the World Trade Organization (WTO), he said. The Slovak trading system could be characterized by openness, low tariffs, and almost non-existent trade barriers. His country supported further liberalization of international trade services and had acceded to liberalization initiatives in the sectors of information technologies, financial services and basic telecommunications.
He said regional economic cooperation was important, and integration into the European Union was one of Slovakia's priorities. It was also interested in joining the Organisation for Economic Cooperation and Development (OECD) and it actively supported regional agencies within the United Nations system, such as the Economic Commission for Europe, and other systems, including the Central European Free Trade Association. The Slovak Republic also intended to intensify its participation in United Nations specialized agencies, such as the United Nations Development Programme (UNDP) and the United Nations Industrial Development Organization (UNIDO). The resident coordinator system had fully proved its worth in bringing adequate strategy and coordination to United Nations operational activities.
VOLODYMYR RESHETNYAK (Ukraine) said the world community needed to take proper measures to minimize the negative effects of globalization. Such measures should help the weak and vulnerable economies reduce the risks associated with globalization. The United Nations was equipped better than any other world body to elaborate approaches and to find the means and tools that could help to overcome the negative impact of globalization. In that context, the continuing reforms in the United Nations were of special importance.
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He added that regional economic cooperation was part and parcel of the global economic relations, which should be based on the principles of non-discrimination, fair competition, genuine partnership and mutual benefit. His country fully understood its responsibility for the protection of the environment, both at the national and at the global levels. Democratic changes provided new possibilities for a broad section of the population to participate in activities aimed at environmental protection. Such steps would enable Ukraine to move closer to ensuring ecological safety and balance.
G.S. AKUNWAFOR (Nigeria) said the external debt crisis in developing countries had become a question of survival. Four years after structural adjustment programmes had been undertaken, the issue of heavy debt-burden and debt-servicing obligations had kept too many developing countries, particularly the middle-income and least developed of them, from implementing developmental programmes or embarking on practicable poverty-eradication programmes for economic growth and sustainable development. Rather, they had remained shackled to the vicious cycle of debt. Creditor countries and the multilateral financial institutions should not only continue to extend concessional financial assistance to middle-income and least developed countries, but also concede to many of the heavily indebted countries, especially in Africa, the option of outright cancellation of such debts.
He emphasized that the United Nations Conference on Trade and Development (UNCTAD) was the focal point within the United Nations for the integrated treatment of development and its interrelated issues of trade, finance, technology, investment and sustainable development. He welcomed a system which granted access to exports of all nations, a rules-based, transparent and effective trading system that did not impose the will of any one Member State on other States by introducing extra-trade issues into the agenda. The industrialized countries had the funds and the technical know-how which they should share with their developing partners. The ODA was crucial because desertification, drought, soil and marine erosion as well as a low supply of fresh water were all new challenges confronting Africans. African countries continued their efforts to contain the threat but their resources were not enough. The United Nations and the international community could and should do more to assist African national efforts to redress the ecological imbalance and dislocation, and thereby enable African food production to grow.
DAVID PRENDERGAST (Jamaica) said Caribbean countries recognized the importance of globalization, but were concerned about the growing trend towards protectionism. International cooperation in the areas of trade, market access and finance must be strengthened and wider dispersion of capital flows, including access to private financial markets, encouraged. A more socially responsible globalization must be encouraged, based on agreed norms and standards which protected the rights of the individual. There should be investment in human resources development and the removal of inequalities in access to information and information technology. The architecture of the
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international financial institutions should be examined to promote the monitoring of capital flows. Those institutions should be flexible in policy applications and sensitive to the needs of developing countries. Adequate levels of technical and financial support must be ensured to enable developing countries to adjust to the current global financial situation, he said.
Jamaica attached great importance to development financing and would like future discussions on the subject to focus, among other things, on the role of ODA, international financial cooperation for development, trade and financing for development, and the architecture of the international financial system and its impact on developing countries. He said the focus should also be on domestic resource mobilization, international private flows, foreign direct investment and additional sources of financing.
KIM CHANG GUK (Democratic People's Republic of Korea) said there were a number of major challenges to international economic development. Among them was that cold war thinking remained intact in international economic relations. Economic sanctions were a result of such thinking, which not only incited mistrust and confrontation among countries and hampered the economic development of developing countries in contravention of cooperation, but also adversely affected international economic relations. Unilateral economic sanctions should no longer be tolerated. Another challenge was that action programmes and commitments adopted at major United Nations conferences had not been translated into concrete actions.
He added that it was urgent to take action-oriented measures to remove the negative effects of globalization. It must be realized that there could be no model or standard approach in economic development since conditions differ from country to country. Moreover, any attempt to impose the economic, social and cultural values of a certain country or region upon others should be rejected by all means. Developing countries should enhance their capacity for self-reliance while strengthening international economic cooperation to promote development and sustainable economic growth.
ISSOUF OUMAR MAIGA (Mali) said it was important to stress the problems of poverty, distress and disease which plagued so many people around the world. The international community must give more emphasis to public assistance to benefit poorer countries that had profited very little from worldwide economic reform and growth. Unfortunately, the rate of ODA had been falling in recent years. Development was a complex issue and was not a matter of simple monetary transfers. It required a culture of cooperation and attention to new development needs and a strengthening of national capacities and infrastructure.
He said development assistance efforts also had to take into account the weak position of the least developed countries on international financial markets where they found it difficult to attract investment capital. Those
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countries must be helped to improve their macroeconomic policies to meet the challenges of globalization. A new international infrastructure was needed to address financial crises, and there should be closer ties between international institutions which promoted development to counter the forces of the free market. The end of the cold war had led to a kind of strategic vacuum. However, there were still two categories of countries -- those who had the resources, expertise and technological know-how to compete, and those who were still struggling to survive in the international economic arena.
ELDAR K0ULIEV (Azerbaijan), said that macroeconomic policies, the environment and economic processes in the world today elicited concern. The turbulence of financial markets must be considered a danger, and the threat of a crisis must be addressed. Looking for a reason for the crisis in the globalization process, and seeking to address it remained of paramount importance.
He said globalization of capital markets, goods and the labour force was a process of integration of individual countries into the world economy. Economic liberalization of trade barriers and other protectionist measures had led to the creation of a global market.
The International Monetary Fund (IMF) and the World Bank had not been able to take timely actions, he said. Something had to be done to address the crisis, which hit developing countries the hardest.
Regulating processes inside countries and at the regional level must also take place, he said. Azerbaijan had gone to a market economy from a command economic system, after the dissolution of the Former Soviet Union, by making economic reforms. Beginning in 1995, the Government of Azerbaijan had been carrying out comprehensive programmes to stabilize the country.
Azerbaijan was privatizing, and there had been direct foreign investment of more than one billion dollars into the economy, he said. Much of that investment had gone into oil development, but other areas had also been addressed. Countries should do everything they could to create a favourable atmosphere for investment.
MOWAFAK MAHMOUD AYOUB (Iraq) said that barriers or obstacles placed before developing countries that prevented their full participation in the world economy, included sanctions imposed either unilaterally or under the auspices of the Security Council. Iraq was suffering from the most severe sanctions imposed against any country. The current Iraqi sanctions had led to a complete paralysis in the educational, economic and social life of the country's citizens. Various surveys by the United Nations and the Iraqi Government indicated that more than a million people had died due to hardships created by the sanctions, and that more than 4 million, mainly women and children, were suffering from malnutrition.
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He said those figures were not abstract calculations, but the result of an objective analysis of the real situation. The latest United Nations Children's Fund (UNICEF) country report indicated that acute malnutrition had increased from 3 to 11 per cent among children under five years of age. There had been an increase in the number of low weight infant births because of malnutrition, and there had also been an increase in maternal mortality. Fewer children were attending schools. The United Nations "oil-for-food formula" did not offer any realistic solutions. The programme's benefit to the average Iraqi was worth less than 25 cents a day.
It was time to let the Security Council members know that they must respect the principles of the United Nations Charter, he said. He called on them to shoulder their legal and moral responsibilities and brush aside double standards. Council members should not be held hostage to two powerful members whose practices offended the ideals of the Organization. The United States had imposed economic sanctions against 61 countries since 1992 and had imposed, or was threatening to impose, sanctions against 75 States without any regard to the impact on their people. The Security Council should not be dominated by narrow interests of special groups.
M. SANDI YACOUBA (Niger) said that the eradication of poverty was one of Niger's main objectives. It had presented a programme to donor countries to eradicate poverty, which had been approved in Geneva last March. During recent months, his country had suffered from natural disasters and had called on the international community to mobilize the necessary resources. His people needed medicine, food, tents and seeds for planting.
He said globalization could be an opportunity for developing countries. The gap between the rich and the poor must be reduced. Most developing countries had to launch structural adjustment programmes, economic reforms which impacted the most vulnerable sectors of the population. At the same time, they had to promote democracy and good governance. Misery and democracy could not coexist. Democracy and reforms must be supported by sufficient development finance.
Poor countries could not attract private investment, he said. At the same time ODA was falling and the debt burden handicapped economic development. Niger supported the heavily indebted poor country initiative but it had too many restrictive conditions.
DANIEL D.C. DON NANJIRA, representative of the World Meteorological Organization (WMO), said WMO provided authoritative information within the United Nations system on the state and behaviour of the Earth's atmosphere, its interaction with the oceans, the climate it produced and the resulting distribution of water resources. Its mandate aimed to promote and sustain development which was vital to human survival. The organization's primary
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purpose was to facilitate the development of services which improved the well- being and safety of communities, nations, and humankind.
Reviewing the future work of WMO, he said the organization would continue to participate actively in the international efforts to save coming generations from the scourges of environmental deterioration and the effects of global warming, the damage to the ozone layer, water scarcity, pollution and natural and technological disasters. It would work to improve the adequacy, efficiency and effectiveness of national and global meteorological and hydrological capacities, infrastructures, networks, observing stations and services to assist human activities, all of which were vital prerequisites for sustainable development. The world community needed to reassess the contributions of the sciences and technology to development and to enhance the applications of scientific and technological advances to sustainable development.
YORAM ELRON (Israel) said that, in the drive towards sustainable development, a major concern was the efficient use of water. Sources for irrigation were becoming more and more scarce, doing away with the notion that water could be a free source. As a result, policy-makers in many countries were turning to Israel to glean from its experience and know-how. Israeli expertise could, for example, help them optimize plant-soil-water relationships in areas where water was scarce. That kind of knowledge translated into concrete economic growth.
To that end, he added, Israel had undertaken another initiative as well: working with other countries towards developing desert margin areas. That term referred to the many sub-desert regions that were destined to become future economic frontiers. Israel had worked to produce new technologies specially suited to desert environments, from modified irrigation methods to energy-production systems. With today's rapid urbanization across the globe, there was a new need to develop viable agriculture systems by working with innovative forms of protected agriculture, such as greenhouses.
DAUL MATUTE (Peru) said that increasing input into major international financial institutions and creating means to cope with crises was imperative, as otherwise economic fallout would hurt the neediest people. Peru highlighted the strides made by the WTO, especially the trends in multilateral trade, regional agreements and tariff sessions which had been hammered out during the Uruguay round. He also noted the increasing need for macroeconomic polices and transparency.
Global cooperation and sound international financial policies should be addressed in the Conference on Development Financing, he said. Peru looked forward to seeing evidence of the political will necessary to alleviate poverty, protect the environment and fight drugs.
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LUIS GONZALES (Paraguay) said that economic and financial issues were of great significance on the national and multinational agenda. Globalization and liberalization held promise for the future, but they could have undesirable effects on countries which had not reached a certain level of development. His country had achieved a significant level of growth, but not even that had enabled them to reach desired per capita income levels, and it remained a situation of concern.
Due to lower prices on commodities, low investment and unfavourable climatic conditions stemming from the El Niño phenomenon, Paraguay was facing difficulties, he said. Exports of higher, value-added products were being pursued to achieve dynamic growth and to raise living standards. However, it was also vital to foster economic integration. To that end, his country had signed in 1981 the Assuncion Treaty, creating a regional open market. Paraguay was seeking still higher levels of integration, such as the total eradication of protectionist measures.
PERCY MANGOAELA (Lesotho) said increasing volumes of toxic substances and greenhouse gases continued to plague the global environment. It was clear that the deterioration of the global environment occurred in both developed and developing countries. The phenomenon of acid rain, as well as trans- boundary air pollution, were no longer confined to the industrialized countries. They were increasingly becoming problematic in the developing countries where rapid economic growth and urbanization were resulting in higher levels of air and water pollution with subsequent adverse impact on health. The change to a healthier environment, commensurate with the expectations of the new era, was a difficult process; however, a strong commitment to its achievement was essential.
There was a need to halt the further marginalization of least developed countries like his own, he said. Such countries needed to be provided with substantial increases in financial and technical assistance on preferential terms aimed at infrastructure development, building telecommunications, capacity building, and institution building. Measures to help the least developed countries included the removal of textile imports restrictions from small exporters, and the elimination of time-bound preferential treatment.
JUAN ANTONIO STAGG (Panama) said globalization had opened up fresh opportunities, including increased trade. At their September meeting, the heads of State and Government of the Rio Group had expressed their support for the principles of regionalism within the framework of multilateral trade and commerce. The Rio Group had emphasised that the process should be non- discriminatory and transparent and provide opportunities to bring national economies into the international system.
He urged members of the WTO to fulfil the mandates adopted in the Uruguay round of GATT, to improve funding for the multilateral trading system
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and promote financial flows between the region of the Rio Group and the rest of the world.
Panama was concerned with the uncertainty of the current world economic situation and its impact on the economic environment, he said. It was also concerned that the deterioration of the environment could affect the economies of countries in its region. There was a need to galvanize the international machinery that dealt with such problems. He urged that the United Nations strengthen its ties with the Bretton Woods institutions, the IMF, the World Bank and the Inter-American Development Bank.
ION BOTNARU (Republic of Moldova) said the South-East Asian financial crisis, which had affected the Russian Federation, had also had an impact on the economies of many countries in the region. The costly economic reforms carried out in the Republic of Moldova since 1992 were aimed at the country's full integration into the global economy. The country's gross domestic product had dropped by 60 per cent in real terms between 1991 and 1997, and a growth rate of 1 per cent was forecast. The Government was in the process of establishing a full market economy with an inflation rate of up to 12 per cent.
He said one of the Government's priorities was to complete its privatization programme. More than 5000 State enterprises had been privatized, and last year a land privatization programme had been started. Moldova stood ready to develop economic relations with the European Union as well as with countries of Eastern and Central Europe. The Prime Ministers of Georgia, Ukraine, Azerbaijan and Moldova had had talks in Washington yesterday on economic issues. The United Nations had a responsibility to promote international economic cooperation for development. Moldova appreciated the assistance it had had from United Nations agencies such as the United Nations Development Programme (UNDP), United Nations Children's Fund (UNICEF), the United Nations Populations Fund (UNFPA), the WHO and the Office of the United Nations High Commissioner for Refugees (UNHCR), he said.
LEA RAHOLINIRINA (Madagascar) said that the recession spreading through the world was making marginalization the fate of countries with low incomes, despite their potential and their will to enter into world trade. Many things hindered their entry, including tariff and non-tariff barriers. Madagascar wanted to see initiatives and technical assistance for highly indebted poor countries. Madagascar would also like to see organizations within the United Nations system help foster increased production capacity in developing countries.
She said her country wished to help in the search for a solution, through its role in the Non-Aligned Movement. International cooperation for development, based on fair distribution of resources, should be the central
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component for cooperation and was the most effective weapon for confronting issues of development.
EDIN A'ALA (Syria) said the Committee's considerations coincided with a global financial crisis that could lead to a stagnation in world economic growth. Globalization had two sides. Economic liberalization could expose developing countries to many dangers, as evident by problems of poverty and underdevelopment which were increasing in many countries. Globalization ignored the State's role in providing social development for its citizens. International cooperation was needed to deal with current economic realities and find solutions to the problems plaguing so many parts of the world. The United Nations could play a vital role in promoting a dialogue between developed and developing countries. Direct foreign investment was important, but it could not replace ODA. Direct investment was too unpredictable and could even be dangerous.
He said Syria's economic policies placed much emphasis on diversification and investment, and also encouraged foreign investment. It wanted an Arab free trade region. Efforts for peace and development in the region were being blocked because of Israel's actions and intransigence and because of its refusal to observe the principle of land for peace. Israel had tried to impose a peace based on occupation and illegal settlement.
MBAYU FELIX (Cameroon) said mastering the process of globalization was imperative and urgent. At the national level, there was a need to conceive macroeconomic and microeconomic policies to accelerate economic growth to benefit the poor since the gross national product (GNP) did not necessarily filter down and market mechanisms were usually distorted by the existing distribution of income and wealth. Structural adjustment programmes were required to promote expenditures aimed at the poor, protecting them from the budget reductions, while increasing the quality and effectiveness of social expenditures. It was necessary to increase access to productive resources by prioritizing the informal sector. He stressed the importance of ensuring equality and equity, with particular emphasis on gender.
He said improving the lives of the most vulnerable in society was not only a matter of solidarity but actually made good economic sense, because such an endeavour could trigger a "multiplier" effect on employment, as well as economic productivity and population control. At the international level, there was a need to create an enabling environment with improved terms of trade, external debt reduction and technology transfer. He supported increased ODA, increased market access, encouraging investments in Africa and conversion of bilateral debts into grants. Furthermore, the partnership and collaboration among development actors should be reinforced. By the same token, the capacity of major multilateral organizations to manage and respond to crisis in the world economy should be enhanced.
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