ECONOMIC AND SOCIAL COUNCIL DISCUSSES FOREIGN DEBT AND NATURE OF POVERTY
Press Release
ECOSOC/5829
ECONOMIC AND SOCIAL COUNCIL DISCUSSES FOREIGN DEBT AND NATURE OF POVERTY
19990706 Proposes Solutions for Problems at Macro and Micro Economic Levels(Reissued as received.)
GENEVA, 5 July (UN Information Service) -- The Economic and Social Council this afternoon continued a policy dialogue and discussion on important developments in the world economy and international economic cooperation between delegates and heads of multilateral financial and trade institutions of the United Nations system.
The main issues were debt alleviation, the elimination of poverty, and funding for programmes to combat poverty. International mechanisms to protect fair trade, to respond quickly to both natural and "unnatural" crises, and to coordinate negotiations and the work of the international organizations were also issues raised by delegates. The positive and negative aspects of globalization upon the poor and upon fragile economies were highlighted.
The implications of debt upon specific groups of people, notably women, and its role in the growing rate of poverty across the globe were elaborated. The panellists maintained that poverty was not just an economic issue, it was also political. There was a need for a comprehensive guide to poverty eradication. Certain elements of this guide were identified, such as proper governance and the eradication of corruption. Debt forgiveness could not be an appropriate solution, since it was inviable economically. The economic empowerment of women could be part of a solution, as could the consultation of the poor themselves, however, no solution could be applied without the consent of both people and government.
Panellists included James Wolfensohn, President of the World Bank, Carlos Fortin, Deputy of the Secretary-General of the United Nations Conference on Trade and Development (UNCTAD), David Hartridge, Director-in-Charge of the World Trade Organization (WTO) and representatives of the International Monetary Fund (IMF) and the International Labour Office (ILO).
Delegates from Sierra Leone, Ecuador, Russian Federation, Rwanda, Saint Lucia, Namibia, The former Yugoslav Republic of Macedonia, Indonesia, Guatemala, United States, Iran, Philippines, Spain, Bangladesh, Nicaragua, Japan and Argentina also spoke.
The plenary will reconvene at 9.30 a.m. on Tuesday, 6 July, to celebrate the tenth anniversary of the adoption of the Convention on the Rights of the Child before continuing the high-level segment and discussing the role of employment and work in poverty eradication and the empowerment and advancement of women.
Discussion
Mr. Hartridge of the World Trade Organization, in response to a question asked this morning, replied that much was being done to coordinate work between the World Bank, the World Trade Organization, and UNCTAD. Whenever regulation became an issue of negotiation, there were problems of protectionism and of regulators themselves who felt protective of their private area of competence.
The representative of Sierra Leone asked a question inquiring how to reduce sectoral thinking with regard to global problems, and whether policy eradication should come before poverty eradication. The representative of Ecuador asked how UNCTAD, the IMF or the WTO could help countries with assistance in social expenditure connected with the debt burden, particularly in the context of large-scale natural disasters. A representative of the Russian Federation wondered whether a comprehensive solution to the debt problem would be an extension of that debt. The delegate of Rwanda wondered whether debt relief would indeed be implemented by the end of the year, since this did not seem particularly probable. The representative of Saint Lucia noted that the recent decision by the WTO panel on the banana issue reflected on the special status and vulnerabilities of island States, and asked whether the WTO appreciated that these States were being marginalized by this trade statute.
A representative of the IMF said that the focus of these questions was peace and development. The issue was political economics, not just politics. It was a question of the priorities at the time. It was the job of developing and developed countries to develop the job markets. The IMF had a fund for countries that had experienced natural disasters. An extension of debt for the Russian Federation had not yet been tabled by the international community. The incidence of poverty knew no country. Poverty was not just an economic issue, it was 70 per cent a political issue. The issue of funding was secondary, the issue of policies were primordial, if they were supported by the people and by the government.
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Mr. Wolfensohn said the World Bank had responded fully and appropriately to the natural disasters in South America, as indeed had most international organizations. The Bank was trying to be helpful to those countries suffering "unnatural disasters". The issue of debt should not become one of debt forgiveness. It was easy to blame others for debt and poverty. The amount of money needed should be determined and the issue of over-borrowing resolved. Debt forgiveness was not a viable option. It was important that ECOSOC have a concept of the issue on how to eradicate poverty that shared the weight equally. Proper governance and capacity had to start in the countries borrowing money. A strengthening of governments, an attack on corruption, and proper institutional and organizational overseeing were all necessary for this. Poverty could only be attacked in partnership between governments with structure, those with funding, and civil society. It was a long-term issue, and there should be a comprehensive solution. The World Bank understood the particular status of island States, and took it into consideration.
Mr. Hartridge of the WTO said that it was true that there was a discrepancy between the commitments of developing countries as required by the General Agreement on Tariffs and Trade (GATT). Trade liberalization was not a concession made to foreigners. Poor countries could not afford protectionism. Commitments on this issue provided a very valuable security both inside and outside the country. The banana issue was a difficult one, and remained to be resolved. There were no special programmes or allowances made for island nations.
A representative of the ILO said that the relationship between war, peace and development was an interesting one. The relative roles of domestic resources and foreign resources indicated that there was a need for a comprehensive guide if poverty was to be eradicated. The ILO was attempting to develop a "rapid-response facility" to respond to problems, both natural and "unnatural". The problem was an issue of national consensus, which needed to be upheld. Stability started within a country, and could not be imposed from outside.
Mr. Fortin of UNCTAD said that the issue of countries that did not fit the criteria for development planning and yet remained vulnerable to economic shocks remained to be resolved. Attempts were being made to identify the factors causing small economies to be vulnerable.
The representative of Namibia asked whether democratization should not be encouraged in the international political system; and wondered how much policy was helping the international economic empowerment of women. The representative of the former Yugoslav Republic of Macedonia advocated concrete policies and measures for stabilization in the context of economics, and asked for clarifications of the roles and profits of the specific organizations involved in the recovery of the region. The representative of Indonesia asked how long the international community was planning to take to build a new
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international architecture that would defuse crises; and what were the criteria for good governance, since there were no recognized international standards and codes of conducts. The representative of Guatemala asked whether this would be another conference on development seen from the financial angle. The representative of the United States queried why there were no women upon the podium.
Mr. Wolfensohn said the World Bank was supportive of a proposed conference with the United Nations on development financing, but of course to date it had not been decided to hold such a conference. The World Bank had always been supportive of employment opportunities in countries that had fostered a free approach to trade; in such situations it often had participated in job-creation programmes. The World Bank supported empowerment of women and micro-credit activities; it had some 72 representatives in the field dealing with non-governmental organizations, which had proved best for developing micro credit projects. The World Bank was actively involved in running reconstruction activities in the former Yugoslavia; as for "profit-making", it made very little "profit"; it was not lending money for profit although it did make profit on investment of its capital. Overall, the Bank was strapped for cash, so it was true that debt forgiveness had major implications for it.
Mr. Fortin of UNCTAD said, among other things, that the organization used the word "partnership" to mean effective relationships between international organizations, governments, and the private sector to promote development; one focus of UNCTAD was investment cooperation, including investment by some developing countries in other developing countries; this often was achieved through bilateral agreements and amounted to a very useful form of South-South cooperation. UNCTAD was committed to gender mainstreaming in all aspects of its work; progress came slowly, but such work was important; emphasis now was being placed on empowerment of women in the organization's trade and investment policies. It was worth noting that two of UNCTAD's five directors were women.
A representative of the IMF said, among other things, that the Fund did make a profit from its operations, but profits were not the issue; the profits came from lending to member countries; margins charged by the Fund for use of resources were small; the real issue was one of policy -- the question was were the right policies in place in the countries concerned? If so, then IMF funding proved useful. A serious progress report on reform of IMF operations should be available within a few months; the organization's standards and best practices in general had been put together by its leadership and by financial and regulatory authorities in member countries.
The WTO's Mr. Hartridge said it was true that imports of cheap goods could damage domestic producers, but so could imports of better goods, whether they were cheaper or not; it was dangerous to argue that imported goods should
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be banned just because they were cheap; if they were subsidized or "dumped", that was different. There were many producers who would be very happy to hear that competition based on price was being reduced; and meanwhile one advantage many developing countries had was that they could produce goods cheaply.
Other questions and comments were heard, including a query from Japan on what the impacts were on developing countries of economic globalization and how international financial institutions were acting to balance positive effects with liabilities. The representative of Iran asked about common programmes, coordination, and institutional arrangements to promote employment, including between financial institutions and the ILO; the representative of the Philippines wondered about the implications of "good governance" standards on actual IMF and World Bank activities, and what the financial institutions were doing to foster good governance and democracy; the representative of Spain said the conclusions and principles established at the World Summit for Social Development held in Copenhagen a few years ago should be kept in mind as principles on development were hammered out by world financial institutions -- there should be no contradictions with the Copenhagen standards; and the representative of Bangladesh expressed concern about "marginalization" of least developed countries; the upcoming round of WTO negotiations should be focused, among other things, on progressive inclusion of such countries in world trade, he said.
In addition, the representative of Nicaragua noted that the Group of Seven industrialized countries recently had agreed to consider the situations of a number of highly indebted small countries, and wondered if Nicaragua was going to be included in programmes for debt forgiveness, especially in the wake of a hurricane last year that had destroyed two-thirds of the country's infrastructure. And the representative of Argentina asked how the IMF responded to requests for poverty reduction programmes and how it developed and packaged funding.
A representative of the IMF said that globalization had benefits as well as risks, although these were avoidable. Benefits should be maximized, and risk impacts minimalized. The mechanisms for looking at social implications of the adjustment process should be strengthened, as should the domestic processes against marginalization. Joint efforts between the IMF and the ILO had and would continue, and had even been strengthened. Existing institutions needed to be strengthened, and their management also, but their strengthening could not ensure good governance. The IMF had a general view upon gender issues, considering that the strengthening of the environment, health, social services, and equity in the implementation of policies, would create an environment that would energize participation amongst all, including women.
The ILO representative said that employment should be a central issue in policy-making. The ILO had strategic objectives in this area, covering the
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employment of both women and men, social protection, and social dialogue. A set of policies was being developed to aid countries to cope with globalization and its consequences. Two themes cut across all ILO work -- gender and development. The ILO had been trying to institutionalize its relationship with the Bretton Woods institutions. There was a vital issue left, and that was child labour.
Mr. Fortin of UNCTAD said that globalization would help global development. There were structural features of the world that unless addressed would mean that those who had not, would have less. There were many areas where developing countries had been left behind, and UNCTAD was helping these countries to remedy that situation. This would contribute to a better international system.
Mr. Hartridge of the WTO said that there had not been enough globalization, since this last had been selective. Some least developed countries could become viable members of the WTO, and this would be due to their own efforts, and not to any external assistance, although the WTO was attempting to assist by improving the aid process.
Mr. Wolfensohn of the World Bank said that the gender issue was of paramount importance. Unemployment, poverty and gender should be examined together. There was a need for fundamental cultural and social change. The education of girls was part of the plan for gender mainstreaming. The gap between labour markets and their behaviour should be examined, as should the human rights gap. The assets in the hands of women should be protected, and further social assets provided to them. In many countries, creation depended upon social capital, and therefore countries ignoring gender would continue to see a decrease in growth.
FRANCESCO PAOLO FULCI, President of the Economic and Social Council, rounded up the discussion saying that the dialogue had been most interesting and would hopefully be productive. A number of interesting proposals had been made. It had been suggested that there should be a new North-South partnership to implement the pledges made at conferences covering women, employment and poverty. This should be monitored every year for success. The United Nations system should develop an integrated policy framework to address globalization based on the United Nations global conferences. A new type of approach across many levels was needed to eradicate poverty. A joint task force should be set up between the United Nations and the international financial bodies. The time had come to have another international dialogue on unemployment. ECOSOC should support the call to make the new round of multilateral economic negotiations "a development round". A task force should be set up to aid the eradication of child labour. The international community should make full use of ECOSOC as a forum where Governments, the United Nations system, the private sector, civil society and NGOs could discuss ways and means for eradicating poverty.
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Mr. Fulci added that the human cost of the financial crisis had been staggering. Unemployment and poverty had grown. The goal to reduce poverty by 2015 needed to be implemented. The primary responsibility for development lay with Governments themselves. The crisis of development required a more favourable economic international environment. Debt relief remained essential. Unemployment and underemployment were global concerns, similar to cancer. Women were and would be the major victims of poverty. The question was to make policies that would aid women. Implementation of these policies left much to be required. The key was empowering women, educating girls, and providing equal opportunities for all. The persistence of poverty was an ethical and moral crisis. Without peace, there could be no development.
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