ECONOMIC COMMITTEE SEEKS PROCLAMATION OF 2005 AS INTERNATIONAL YEAR OF MICROCREDIT; OTHER TEXTS ALSO APPROVED

10 November 1998

Press Release
GA/EF/2848

ECONOMIC COMMITTEE SEEKS PROCLAMATION OF 2005 AS INTERNATIONAL YEAR OF MICROCREDIT; OTHER TEXTS ALSO APPROVED

19981110 Review of Economic and Social Council Report Begins; Experts Discuss 'Third Way' Politics, Blending Government and Market Sectors

The General Assembly would proclaim 2005 as the International Year of Microcredit and would request that the Year be a special occasion for giving impetus to microcredit programmes throughout the world, according to a draft resolution approved by the Second Committee (Economic and Financial) this morning.

The Committee approved three other draft resolutions and heard the introduction of six more draft texts.

By the resolution on microcredit, the Assembly would also ask all those involved in the eradication of poverty to consider taking additional steps, to allow credit and related services for self-employment and income-generating activities to be made available to an increasing number of people.

By a draft resolution on international cooperation to reduce the impact of the El Niño phenomenon, also approved, the Assembly would call for the continued implementation of the Assembly's resolution on international cooperation to reduce the impact of the phenomenon. The Secretary-General would be asked to submit recommendations on how the United Nations system would deal with the reduction of natural disasters.

The Committee also approved drafts on high-level, international intergovernmental consideration of financing for development and preparations for the special session of the General Assembly in the year 2001 to review the achievement of the goals of the World Summit for Children.

Also this morning the Committee held a panel discussion on "Third Way" politics. Anthony Giddens, Director of the London School of Economics and Political Science, said government should not be treated as the perfect solution nor should it be a problem; the Third Way view was that government should provide dynamic leadership in a world that needed it. The challenge was how to develop a dynamic economy that recognized social equality.

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Linda Lim, Professor of Economics, School of Business, University of Michigan, said there were many third ways, wherein each given State must craft market policies to its own circumstances. Jacques Baudot, Secretary of the Copenhagen Seminars for Social Progress, said the world economy held more risks than in decades past, and there was therefore the need for greater international cooperation. The first duty of a State was to ensure the economic basis that would allow everyone to contribute to the community.

Kwame Pianim, Chief Executive Officer of New World Investment Ltd. of Ghana, said the key questions were how the Third Way could help shape State policies in addressing the challenges of the global economy, and how it could help developing countries participate in the global economy.

The Second Committee also began its consideration of the report of the Economic and Social Council. It received reports on the United Nations Population Award and on public administration and development.

The Committee decided to postpone consideration of two topics -- programme planning and sustainable development and international economic cooperation -- until Monday, 17 November.

The Committee meets again at 3 p.m. today to consider the report of the Economic and Social Council.

Committee Work Programme

The Second Committee (Economic and Financial) met this morning to begin consideration of the report of the Economic and Social Council (document A/53/3). The report includes a summary of, as well as action taken by, the Council's organizational and substantive sessions of 1998.

The report also contains the agreed conclusion of the Council's high- level meeting with the Bretton Woods institutions, held on 18 April, and of the Council's session on implementation of, and follow-up to, major United Nations conferences and summits.

Council Texts Calling For Assembly Action

-- By its resolution 1998/1, the Council recommended that the General Assembly decide that, starting from the year 1999, proposals for the proclamation of international years should be submitted directly to the Assembly for consideration and action, unless the Assembly decided to bring them to the attention of the Council for evaluation in accordance with the provisions of the guidelines for international years and anniversaries adopted by the General Assembly in its decision 35/424.

-- By its decision 1998/211, the Council took note of the request regarding the enlargement of the Executive Committee of the Programme of the United Nations High Commissioner for Refugees (UNHCR) contained in the annex to the note verbale dated 14 October 1997 from the Permanent Mission of Mozambique to the United Nations addressed to the Secretary-General (E/1998/3) and recommended that the Assembly take a decision at its fifty-third session on the question of increasing the membership of the Executive Committee from 53 to 54 States.

-- By resolution 1998/28, on the International Year of Microcredit 2005, the Council recommended to the General Assembly the adoption of the draft resolution contained therein.

-- In its resolution 1998/30, the Council recommended that the General Assembly at its fifty-third session proclaim the year 2002 as the International Year of Mountains.

-- By resolution 1998/31, on the International Decade for a Culture of Peace and Non-violence for the Children of the World (2001-2010), the Council recommended to the General Assembly the adoption of the draft resolution contained therein.

-- In its resolution 1998/37, the Council, recalling General Assembly resolution 52/15, by which the Assembly proclaimed the year 2000 as the

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International Year for the Culture of Peace, requested the General Assembly to adopt a programme of action for the year 2000.

-- The Council adopted resolution 1998/46, on further measures for the restructuring and revitalization of the United Nations in the economic, social and related fields, and decided to bring it to the attention of the General Assembly in pursuance of paragraph 70 of annex I to Assembly resolution 50/277 and paragraphs 9 and 10 of Assembly resolution 52/12 B.

-- In its decision 1998/296, the Council looked forward to the outcome of the consideration of the report of the Secretary-General on the utilization of the development dividend (E/1998/81) under section 34 of the programme budget for the biennium 1998-1999 by the relevant intergovernmental bodies.

-- The Council requested the General Assembly to endorse its resolution 1998/4 on strengthening regional support for persons with disabilities into the twenty-first century.

-- By decision 1998/283, the Council decided, subsequent to the consideration of the report of the Secretary-General on the causes of conflict and the promotion of durable peace and sustainable development in Africa (A/52/871-S/1998/318) by the General Assembly at its fifty-third session, to undertake substantive discussions on the implementation of the relevant recommendations at its substantive session of 1999, taking into account views expressed by Governments during the discussion of the report at the fifty-third session of the General Assembly.

-- In its resolution 1998/40, the Council recommended to the General Assembly that it declare the year 2002 as the International Year of Ecotourism.

-- By resolution 1998/13, on preparations for the Tenth United Nations Congress on the Prevention of Crime and the Treatment of Offenders, the Council recommended to the General Assembly the adoption of the draft resolution contained therein.

-- By resolution 1998/14, on transnational organized crime, the Council recommended to the General Assembly the adoption of the draft resolution contained therein.

-- By resolution 1998/15, on mutual assistance and international cooperation in criminal matters, the Council recommended to the General Assembly the adoption of the draft resolution contained therein.

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Conclusions on Global Financial Issues

The Council report includes a summary of the conclusions by the Acting President of the Council from the Special high-level meeting of the Council with the Bretton Woods institutions. In those conclusions, the Acting President states that discussions have been driven to a large extent by the repercussions of the Asian crisis. Those discussions had demonstrated that everyone -- international institutions and national Governments -- still had much to learn about responding to the forces of global financial integration.

He added that, while many questions remained, it was agreed that there was a need to strengthen the global architecture, that prevention was better than cure, and that actions were required at both the international and the national levels. There also seemed to be universal agreement that more information, greater transparency and improved monitoring were indispensable in reducing the possibility of financial crises. He believed that the meeting had demonstrated, equally, the need to develop the flows of information and transparency between our institutions.

Follow-up to Conferences

The Council's report also discusses its session on integrated and coordinated implementation of, and follow-up to major United Nations conferences and summits. In the President's summary of that meeting, he states that the Council sits at the apex of the configuration of United Nations activities in the economic, social and related fields and as such has a crucial role to play from both a policy coordination standpoint and a management forum function. At the same time, integrating conference follow-up was a daunting task, requiring time and in-depth examination, and the Council needed to reflect on how best to achieve it. Furthermore, the task at hand was now shifting towards implementation and monitoring of results.

The President's summary adds that the breadth and depth of this task were clearly brought out in the deliberations and could be captured in the following six broad areas: cross-cutting issues; coordination and management role of the Council, in particular vis-à-vis its functional commissions and the executive boards of the funds and programmes; inter-agency coordination; country-level follow-up; regional-level follow-up; and monitoring.

Further Reports

In connection with the consideration of the report of the Council, the Committee will also have before it additional reports, including the Secretary-General's Report on the implementation of General Assembly resolution (50/225) on public adminstration and development, (document A/53/173).

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In resolution 50/225, the General Assembly invited Governments and public agencies to strengthen their public administrative and financial management capacity through public sector administrative and management reform, with emphasis on enhanced efficiency and productivity. It also confirmed the importance of and called for the enhancement of the effectiveness of United Nations activities in the area of public administration and development.

In response to the resolution, the Department of Economic and Social Affairs has given priority to the collection and dissemination of basic data in areas such as: strengthening government capacity for policy development, administrative restructuring, civil service reform, human resources development, public administration training, improving performance in the public sector, and financial management (transparency and accountability). The General Assembly also recommended that the Secretary-General ensure maximum coordination of the activities of the United Nations system in the field of public administration and development.

The International Labour Organization (ILO) has strengthened the capacity of labour administrations to design and implement effective policies for the protection of workers and the efficient functioning of labour markets, the report states. The ILO has provided assistance to constituents through a series of audits of ministries of labour and labour administration systems, technical advisory services and technical assistance. Between May 1996 and May 1998, roughly 10,000 participants benefitted from the training offered by the Training Centre of the ILO. Senior government officials and civil servants have traditionally represented the main target group of the training activities of the Centre.

The United Nations Industrial Development Organization (UNIDO) plays a key role in mediating and promoting dialogue between the public and the private sectors, with services aimed at building up institutions capable of formulating and implementing sound industrial policy, facilitating and easing the transition of ownership from public and private enterprise, improving dialogue between from the public and private sectors, fostering environmentally sustainable industrial development, and promoting clearer and safer industrial production.

In conclusion, the report states that in the two years since the adoption of General Assembly resolution 50/225, there had been a growing volume of analysis, research and experimentation on the role of the State and the public sector in the development process. At the national level, countries had embarked on important reforms of the State and the public sector on the basis of new approaches aiming to balance the need for reducing public budgets with the need for preserving and/or strengthening the capacity of the State to carry out its basic functions and provide its citizens with essential local services.

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It adds that although Governments have been steadily reducing their involvement in the production of goods and services, they have been focusing their attention on the need to strengthen their capacity to formulate and develop economic and social policies, and on the need to establish appropriate regulatory frameworks and control mechanisms for the operation of the private sector. New partnerships between the public sector, civil society organizations and business have been forged, and innovative ways of delivering public services are being explored.

In this thriving environment of reform and innovation, the United Nations must play an important role in facilitating discussions and analysis of these themes at the global, regional and national levels. It must foster the exchange of information on policies, successful practices and innovative experiences. It must also provide developing countries and countries in transition with the necessary policy advice and technical assistance to enhance their capacity to formulate, implement and monitor reform strategies able to contribute to their development efforts.

The Fourteenth Meeting of the Group of Experts recognized that the effects of change and reform at both the national and international levels in this field could not be evaluated in the short term. It therefore suggested that a more comprehensive and in-depth review be carried out in the year 2001 --five years from the adoption of resolution 50/225 -- of the changes, trends and developments in the area of public administration and development, and of national and international measures taken in response to the resolution.

The Committee also had before it a note by the Secretary-General transmitting the report of the Executive Director of the United Nations Population Fund (UNFPA) on the United Nations Population Award (document A/52/212). The award is presented annually to an individual or individuals, to an institution or institutions, for the most outstanding contribution to increasing awareness of population questions or to finding solutions to them.

The report states that the laureate is chosen by representatives of 10 Member States of the United Nations, elected by the Economic and Social Council for a period of three years. In 1997-1998, the Council selected the following nine countries to serve on the Committee for the United Nations Population Award, beginning January 1998: Cape Verde, El Salvador, Grenada, Guatemala, Iran, Lesotho, Netherlands, Romania and Thailand. The tenth seat remained vacant. The Award consists of a diploma, a gold medal, and a monetary prize.

Twenty-eight nominations were received for the 1998 United Nations Population Award. Of these, 19 were for the individual category, and nine for the institutional category. After a thorough review of the nominations,

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Professor Hugh Wynter of Jamaica was selected in the individual category and the Sabiny Elders Association of Uganda in the institutional category.

Professor Wynter is the chairman of the National Family Planning Board of Jamaica. He was chosen for his work in promoting safe and effective family planning and trained many medical doctors throughout the region. He is credited with being one of the most influential people in assisting his country to achieve one of the lowest rates of population growth and the highest level of contraceptive use in the region.

The Sabiny Elders Association was nominated primarily for its efforts to curtail the practice of female genital mutilation among the Sabiny community in eastern Uganda. Its most dramatic success has been to participate in a programme which substitutes gift-giving and public celebration for the traditional practice of genital mutilation as a "rite-of-passage" into womanhood.

Also this morning the Committee will consider the topic of programme planning and coordination. Before the Committee on that topic is a letter from the Chairman of the General Assembly's Fifth Committee to the Chairman of the Second Committee on the 40th paragraph of the report of the Committee for Programme and Coordination on the work of its thirty-eighth session (A/53/16).

The letter said the Committee had recommended that the Economic and Social Council and the competent Main Committees of the General Assembly stress in particular the consideration of the proposed revisions to the medium-term plan that has not been submitted to the attention of sectoral and regional bodies. The proposed revisions refer to the following programmes: programme 18, (Economic and social development of Western Asia) and programme 28 (Economic and Social Affairs).

The Second Committee

It will also have before it the report of the Committee on Programme and Coordination on the work of its thirty-eighth session (A/53/16).

The Committee will also hold a panel discussion on "Is there a Third Way: States and Markets in Socio-economic Development". Panellists will include Anthony Giddens, Director of the London School of Economics and Political Science, and chief advisor to Prime Minister Tony Blair; Jacques Baudot, member of the Copenhagen Seminars for Social Progress; Linda Lim, Professor of Economics and the School of Business at the University of Michigan; Kwame Pianim, Chief Executive Officer of New Word Investment Ltd.

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Draft Resolutions

Also this morning the Committee was to hear the introduction of draft resolutions.

By a draft on implementation of the first United Nations Decade for the Eradication of Poverty (A/C.2/53/L.27), sponsored by Indonesia on behalf of the Group of 77 Developing States and China, the General Assembly would call for strengthened efforts at all levels to implement fully and effectively the relevant resolutions and decisions of the United Nations and all agreements and commitments agreed upon at the United Nations major conferences and summits organized since 1990 as they relate to poverty eradication, with a view to achieving the objectives of the Decade as early as possible.

The Assembly would also call for concrete and concerted actions by the international community to create an enabling economic environment to assist developing countries to combat the negative impacts of globalization and marginalization and to reactivate the development process. It would urge the developed countries that have not yet done so to achieve as soon as possible the agreed target of 0.7 per cent of their gross national product for overall official development assistance (ODA) and, within that target, to earmark 0.15 to 0.20 per cent of the gross national product for the least developed countries.

Also by the text, the Assembly would call upon the international community, including multilateral financial institutions, to implement fully and effectively all initiatives taken regarding debt relief for developing countries, in particular the least developed countries, and thus support their efforts to eradicate poverty. Recognizing the role of microcredit as an essential anti-poverty tool, the Assembly would also call on the international community to support and incorporate microcredit and related services in their programmes for the eradication of poverty.

The Assembly would decide that the themes for the International Day for the Eradication of Poverty for 1999 and 2000 shall be "Globalization and poverty eradication" and "Women's role in poverty eradication", respectively. It would request the Secretary-General to report to it at its fifty-fourth session on the progress made in the implementation of measures, recommendations and activities related to the first United Nations Decade for the Eradication of Poverty, including recommendations for possible actions and initiatives towards the new millennium.

A draft resolution on the Convention on Biological Diversity (A/C.2/53/L.29), also sponsored by Indonesia on behalf of the Group of 77 Developing States and China, would have the Assembly express grave concern at the evolution of technologies such as terminator technologies which would adversely affect farmers and local communities in developing countries.

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Recognizing the important role that indigenous and local communities play in the conservation and sustainable use of biological resources, the Assembly would call on the secretariats of the Convention and the World Trade Organization (WTO) to undertake the necessary consultations with member countries of the Convention and the WTO with a view to addressing properly the relationship between the relevant articles of the Agreement on Trade-related Aspects of Intellectual Property Rights and the Convention.

The Assembly would encourage those States that have not yet ratified the Convention to do so as soon as possible and invite all funding institutions, bilateral and multilateral donors, regional funding institutions and non-governmental organizations to cooperate with the secretariat of the Convention in the implementation of the programme of work.

Also by the text, the Assembly would call upon States parties to the Convention urgently to settle any arrears and pay their contributions in full and in a timely manner so as to ensure continuity in the cash flows required to finance ongoing work of the Conference of the Parties, the subsidiary bodies and the Convention secretariat.

The Assembly would invite the Executive Secretary of the Convention on Biological Diversity to report to the Assembly on the results of future meetings of the Conference of the Parties to the Convention and on the outcome of the consultations carried out with other relevant institutions. It would also request the Bureau of the Second Committee, in coordination with the Secretariat, to continue organizing regular timely briefings on the various issues pertinent to biological diversity.

A draft resolution on the revitalization of the United Nations Centre for Human Settlements (Habitat) (A/C.2/53/L.31) was sponsored by Indonesia, on behalf of the Group of 77 Developing Countries and China. By that text the Assembly would welcome the establishment and terms of reference of the team of experts for the revitalization of the United Nations Centre for Human Settlements. The Secretary-General would be requested to submit the recommendations of the team of experts and the views of Member States to the Commission on Human Settlements at its seventeenth session for action.

The Assembly would also reaffirm the need to keep the United Nations Environment Programme and the Centre under separate and distinct management and direction, as requested by the Commission on Human Settlements.

A draft resolution on United Nations Institute for Training and Research (UNITAR) (A/C.2/53/L.32) was sponsored by Indonesia on behalf of the Group of 77 developing States and China. By the text, the Assembly would stress the need for better coordination among the main training and research institutions of the United Nations System, and request UNITAR to assess the "pedagogical

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methods" followed by those institutions in the provision of their training services.

The Assembly would also request the Board of Trustees to attract, to the extent possible, experts from developing countries for the preparation of the relevant training materials for the programmes and activities of the Institute. It would welcome the successful restructuring of UNITAR and stress the need for the Institute to further strengthen its cooperation with other United Nations institutes and relevant national, regional and international institutes.

The Assembly would call on the Secretary-General to continue to explore all possible ways and means to provide additional facilities to the Institute for maintaining its offices and for conducting programmes and training courses that are provided at no cost to States, and to their representatives accredited to United Nations offices in New York and at Nairobi, Geneva and Vienna.

The Assembly would further request that the Secretary-General report to the General Assembly at its fifty-fourth session on the implementation of the present resolution.

Another draft resolution before the committee, on the implementation of the programme of action of the international conference on population and development (A/C.2/53/L.33) was sponsored by Indonesia on behalf of the Group of 77 developing States and China, and by Austria on behalf of the European Union. By the text, the Assembly would request the Secretary-General to seek extra-budgetary resources to assist developing countries, particularly least developed countries, in sending representatives to the thirty-second session of the Commission on Population and Development, which would serve as the preparatory meeting for the special session of the General Assembly, and to the special session itself.

The Secretary-General would be requested to submit to the General Assembly at its fifty-fourth session a report on the special session. The Assembly would decide to include an item entitled "Implementation of the International Conference on Population and Development" in the provisional agenda of its fifty-fourth session.

A draft resolution on transit environment in the landlocked States in Central Asia and their transit developing neighbours (A/C.2/53/L.34) was sponsored by Afghanistan, Armenia, Azerbaijan, Bulgaria, Georgia, Kazakhstan, Kyrgyzstan, Republic of Moldova, Romania, Tajikistan, Turkey, Ukraine and Uzbekistan.

By the text the Assembly would invite the Secretary-General of the United Nations Conference on Trade and Development (UNCTAD) and the

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Governments concerned, in cooperation with relevant United Nations bodies to continue elaborating a programme for improving the efficiency of the current transit environment in the newly independent and developing landlocked States in Central Asia and their transit developing neighbours. The Assembly would seek the provision of technical assistance and advisory services to those States.

Donor countries and multilateral financial and development institutions would be invited, within their mandates, to continue to help the States concerned with financial and technical assistance for the improvement of their transit environment, including construction, transport maintenance, communications, storage and other transit-related facilities.

The Assembly would call upon the United Nations system to continue studying possible ways of promoting more cooperative arrangements between landlocked States in Central Asia and their transit developing neighbours, and to encourage a more active supportive role on the part of the donor community. The Secretary-General of UNCTAD, in close cooperation with the United Nations regional commissions, would be asked to prepare a report on the implementation of the present resolution, to be submitted to the General Assembly at its fifty-fifth session.

Introduction of Draft Resolutions

AKMARAL ARYSTANBEKOVA (Kazakhstan) introduced the draft resolution on transit environment in the landlocked States in Central Asia and their transit developing neighbours (A/C.2/53/L.34).

GRACE WANYONYI (Kenya), speaking on behalf of the Group of 77 developing States and China, introduced the draft resolution on the revitalization of the United Nations Centre for Human Settlements (Habitat) (A/C.2/53/L.31).

AMANY FAHMY (Egypt), speaking on behalf of the Group of 77 developing States and China and the European Union, introduced the draft resolution on the implementation of the programme of action of the international conference on population and development (A/C.2/53/L.33).

BERHANU KEBEDE (Ethiopia), speaking on behalf of the Group of 77 developing States and China, introduced the draft resolution on the Convention on Biological Diversity (A/C.2/53/L.29).

MOCHAMAD HIDAYAT (Indonesia) speaking on behalf of the Group of 77 developing States and China, introduced the draft resolution on United Nations Institute for Training and Research (UNITAR) (A/C.2/53/L.32).

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PRIANTI DJATMIKO-SINGGIH (Indonesia), for the Group of 77 developing States and China, introduced the text on implementation of the first United Nations Decade for the Eradication of Poverty (A/C.2/53/L.27).

Action on Drafts

The Second Committee then approved four draft resolutions.

A draft on high-level, international intergovernmental consideration of financing for development (A/C.2/53/L.28), submitted by the Chairman of the Committee, would have the General Assembly request that the ad hoc open-ended working group on the topic would consider appropriate modalities to ensure the completion of its work and the submission of specific recommendations to the General Assembly at its fifty-fourth session. The text also asked the President of the Assembly, serving as ex-officio chairman of the working group, to take certain steps for its effective functioning. It called for the organization of briefings or panel discussions on important topics, or significant trends and events, that may enrich the deliberations of the group.

By a draft on international cooperation to reduce the impact of the El Niño phenomenon (document A/C.2/53/L.30), sponsored by Indonesia (on behalf of the "Group of 77" developing countries and China), Japan, Mexico, Norway and the United States, the General Assembly would decide that the report from a forthcoming meeting of experts on the subject should be considered in three forums -- the seventh session of the Commission on Sustainable Development; the 1999 substantive session of the Economic and Social Council (ECOSOC), and the special session of the Assembly to review the Programme of Action for the Sustainable Development of Small Island Developing States.

Further, the Assembly would call for continued implementation of its resolution 52/200 on international cooperation to reduce the impact of the El Niño phenomenon and seek a report from the Secretary-General at its next session on implementation of the present resolution. The Secretary-General would be asked to submit recommendations on how the United Nations system would deal with the reduction of natural disasters, upon the conclusion of the International Decade for the Reduction of Natural Disasters in 1999.

By a draft text on preparations for the special session of the General Assembly in the year 2001 to review the achievement of the goals of the World Summit for Children (A/C.2/53/L.9), the Assembly would decide to postpone consideration of the arrangements for that special session to its fifty-fourth session.

A draft resolution on review of progress made in implementing conventions related to environment and sustainable development (document A/53/L.18), recommended to the General Assembly by the Economic and Social Council, would have the Assembly proclaim 2005 as the International Year of

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Microcredit, with observance of the Year as a special occasion for giving impetus to microcredit programmes throughout the world. The Assembly would also ask all those involved in the eradication of poverty to consider taking additional steps, to allow credit and related services for self-employment and income-generating activities to be made available to an increasing number of people. The Secretary-General would be invited to present at the Assembly's fifty-eighth session a report containing a draft programme of action for the effective observance of the year, under an item entitled "First United Nations Decade for the Eradication of Poverty".

The report on the United Nations Population Award was introduced by MITRA VASISHT, Chief of External Relations and United Nations Liaison for UNFPA.

GUIDO BERTUCCI, Director, Division for Public Economics and Public Administration of the Department of Economic and Social Affairs, introduced the report on public administration and development.

The chairman said further statements on the report of the Economic and Social Council would be heard this afternoon.

Panel Discussion

Introducing the panel discussion on "Is there a Third Way -- States and markets in socio-economic development?", the Chairman of the Second Committee, BAGHER ASADI (Iran) said there could be little doubt that in the past decade-and-a-half, the world had seen a shift in the theory and practice of government which had far-reaching effects on the political sphere, as well as on the global economy and service delivery systems in several parts of the world. After a number of years during which debate on the subject had been dominated by proponents of a minimalist state, new voices were being heard which took a different view. Such currents of opinion had now becoming apparent in several parts of the world.

Sometimes those currents went together, with growing concern over what were perceived as the most negative outcomes of neo-liberal policies and "rolling back the State". The results included a rapid rise of poverty tied to deterioration of social capital; a widening gap between rich and poor; rise in crime and corruption, and the deteriorating global environment. The General Assembly at its 50th session had drawn attention to those trends, and called for a redesign of the State to meet those mounting challenges, which would be the challenges of the next century.

ANTHONY GIDDENS, Director of the London School of Economics and Political Science, said "Third Way politics" was a term that had often been used in the history of social democratic politics. After World War II, politics was dominated for 20 years by people who believed that government

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could solve every problem. Then, for a period, politics was dominated by those who believed the market could solve every problem. Third Way was meant to find a balance between the two. Government should not be treated as the perfect solution nor should it be a problem. The Third Way view was that government should provide dynamic leadership in a world that needed it, that politics was an attempt to find a way between the left and right. The political centre had emerged as crucial in modern politics. Third Way politics attempted to answer the question of how to develop a dynamic economy that recognized social equality.

Government needed to be as efficient as economic enterprises, and transparent and legitimate. Third Way politics looked to re-establish trust in political leadership. Also important was the reconstruction of civil society, with everyday civil control, which meant control of crime among other things. The Third Way also required a reconstruction of the economy to find a balance between deregulation and reregulation. A country could not have an effective market economy without effective social institutions.

He said reform of the welfare state was also a key part of the Third Way agenda. There was a need to bring welfare policies into line with globalization and the transformation of everyday life. Ecological reform was important and there was a need to examine the alliance between conservation and progress.

LINDA LIM, Professor of Economics, School of Business, University of Michigan, said there were many third ways, wherein each given State must craft market policies to its own circumstances. Domestic policy packages were not static, but designed in tandem with changes in world economy.

Proper macro-economic management was important, she said, whether the country followed a regime of free capital flows or had a closed economic system. It was necessary to inflate and deflate "asset bubbles", and to manage interest rates in a way that was independent of political actors, whose interests could be affected by short-term financial changes.

Central banks and finance ministries were also important, she added. Those economies which had effective control over macro-economic levels, domestic debt and foreign reserves fared much better in withstanding the harmful effects of the global economic crisis.

She said open financial markets increased pressures, because domestic and foreign capital could both escape markets to avoid the effects of changes in interest rates. The flight of domestic capital had accounted for the global crisis, so shoring up domestic confidence in macro-economic management was crucial and depended on a number of domestic factors. Despite this, good macro-economic controls were not sufficient to prevent devastating levels of capital flight, to which the solution required sound legal, financial and

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commercial institutions, as well as high levels of funding, technical expertise and political will.

JACQUES BAUDOT, Special Advisor and Secretary of the Copenhagen Seminars for Social Progress and coordinator of the World Social Summit for Social Development in Copenhagen, said States and governments should be strengthened, because the level of uncertainty had risen with the advent of the global economy. The global economy and domestic political systems had become characterized by greater uncertainty. An increase in technocracy, and in the complexity of problems that States had to wrestle with, had come into play as well.

The world was more dangerous than in decades past, he said, and therefore the need for international cooperation was more plain to see. The first duty or goal of a State was to ensure for everyone the kind of economic basis that would allow an individual or family to live and become an entity that could contribute to the community. This economic basis remained overriding; it gave more chances to more people to engage in economic activity. It was impossible to over-emphasize that the meaning of life in a society was to educate; when a society neglected to play the role of educator, or devalued the role of education, that society was preparing for "a tough set of tomorrows".

Maintaining social justice, protecting its citizens, and laying the ground work for building national cultures, were also necessary parts of a domestic system.

KWAME PIANIM, Chief Executive Officer of New World Investment Ltd. of Ghana, said there was no doubt of the capacity of the State to create jobs and improve the economy, and this was not the time to roll back State programmes, especially in African countries. The key question was how the Third Way could help shape State policies in addressing the challenges of the global economy and how it could help developing countries participate in the global economy. He said the State needed to be reconfigured to meet the problems of the twenty-first century; there was a need to go beyond the rigidity of the welfare state and of capitalism.

He said the concept of structural adjustment had failed to ignite and sustain global growth. The debate on the subject had been dominated by developed countries, and voices of dissent were not allowed to be heard when the Bretton Woods institutions were developing their policies. There was a need for strong moral judgement, self-restraint and a sense of justice in global economic relations.

In response to a question on financial stability, Mr. GIDDENS said Asian countries could not afford to be sanguine. There was a chance that a second wave of "shocks" could hit Asia. There must be attempts to try to block it,

Second Committee - 16 - Press Release GA/EF/2848 36th Meeting (AM) 10 November 1998

not only by Asian countries but by other parts of the world as well. On Third Way politics, he said that in this era of globalization, the question was not what the state did, but what kind of state should be created. He said the role of the United Nations was fundamental; it must be recognized that some responsibilities had been pushed to the global arena while some had been pushed down to civil society.

On financial management, Ms. LIM said governments needed to be responsible and responsive. "When your house is under attack", she said "you must first keep your own house strong and protect it yourself. Secondly, you try to work together with your neighbours facing the same problems and try to keep such attacks from happening again." On the question of democracy versus authoritarianism, she said the debate had often been too simplistic; everyone wanted democracy when given a choice, but what if the choice was between economic instability and democracy?

Asked how the United Nations might adapt to the changes in the world economy, Mr. BAUDOT said that the work of the Organization was becoming increasingly important. It was a wonderful opportunity for the international community to tie domestic and international policies together and to move forward. The United Nations should invite other actors to participate in its discussions, including transnational corporations and the media, because bringing them in and initiating dialogue implied that a greater level of accountability could be achieved.

In response to a question about domestic macroeconomic controls and the level of democracy within a given country, Mr. PIANIM said the desire for democracy was universal among all peoples, and that it was only governments which favoured less democracy. He added that the United Nations was the least undemocratic organization, but even the United Nations could be further democratized. Representation should not be limited to ruling governments. It should be changed from governments to States, so that opposition parties would be given voice.

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