DEPUTY SECRETARY-GENERAL SAYS FIGHT AGAINST POVERTY EMERGING AS ONE OF GREATEST CHALLENGES OF THE TIMES

Press Release
ECOSOC/5877

DEPUTY SECRETARY-GENERAL SAYS FIGHT AGAINST POVERTY EMERGING AS ONE OF GREATEST CHALLENGES OF THE TIMES

Dialogue Between Economic and Social Council Ambassadors and International Monetary Fund Executives Opens

While the United Nations and the International Monetary Fund (IMF) had been talking “to each other” over the years, they had only recently started talking “with each other”, Deputy Secretary-General, Louise Fréchette said this afternoon as she addressed the opening of the dialogue between the Economic and Social Council Ambassadors and the IMF Executive Directors.

She said the fight against poverty was emerging as one of the greatest challenges of the times and one that should engage all the energies of “our organizations”. However, little good could be done if “we exist” as separate pillars of development, with each institution having its own distinct expertise but standing ultimately in isolation.

“Today we are much more intertwined and working towards a single, integrated vision of development”, she said. Because the risks of new crises and slowdown in world economic growth were still significant, there was no time for complacency. While significant progress had been made, the momentum for reform needed to be maintained.

The IMF’s Managing Director, Michel Camdessus, said that he was reasonably optimistic but not complacent. Global economic conditions had significantly improved in the past few months. It seemed that the trends for progress were strong and growth would continue to pick up in the year 2000. While those projections reflected current positive global economic conditions, many challenges remained, such as how to have better balanced growth among the major market economies. At stake was the orderly pursuit of global sustainable growth which, while achievable, was fraught with risks.

Recovery of the emerging market economies was taking place more rapidly than expected, helping to reduce global uncertainties, he said. However, while recovery was taking place, it was fragile. Much would depend on the perseverance of the Asian authorities in maintaining the courageous path of adjustment they were currently undertaking. While the decline in inflation in most parts of the world was good, low inflation by itself was not sufficient to guard against macroeconomic instability.

Economic and Social Council - 1a - Press Release ECOSOC/5877 49th Meeting (PM) 28 October 1999

Opening the dialogue on poverty eradication and the Heavily Indebted Poor Countries (HIPC) Debt Initiative, Economic and Social Council (ECOSOC) President Francesco Paolo Fulci (Italy) said that if poverty was to be halved by the year 2015, major efforts had to be made or “we will never get there”. Poverty eradication targets must be embedded in the macroeconomic policy framework and structural adjustment policies. Governments must develop reduction strategies and move from lip service to concrete actions aimed at eradicating poverty.

Therefore, he continued, it was necessary to address such issues as adequate nutrition, primary healthcare, gender equality, productive employment, education for all, and above all, accelerated and sustainable job creation and economic growth. That would require a major mobilization of resources at both the national and international levels. Increased and better access to international financial flows and markets, as well as the reduction of external debt burdens, were essential for many countries in their poverty reduction strategies.

Statements were made by the following IMF representatives: Anthony Boote, Assistant Director, Official Financing Operations Division, Policy Development and Review Department (PDR); Thomas Bernes, Executive Director; Nancy L. Happe, Chief, Development Issues Division, (PDR); Arend Kouwenaar, Deputy Division Chief, East African Division II, African Department; and Alexandre Barro Chambrier, Executive Director. In addition, Stephen Paul Collins, Hernan Oyarzabal and Abbas Mirakhor also spoke.

The meeting was also addressed by the Under-Secretary-General for Economic and Social Affairs, Nitin Desai, and Economic and Social Council Vice-Presidents Percy Mangoaela (Lesotho) and Makarim Wibisono (Indonesia), as well as the representatives of Latvia and India.

The Economic and Social Council will meet again at a date to be announced.

The Economic and Social Council met this afternoon to hold a dialogue with the Executive Directors of the International Monetary Fund (IMF).

Statements

LOUISE FRÉCHETTE, Deputy Secretary-General, said there were many issues on which the United Nations and the IMF could and should hold dialogue and cooperate. The first was the eradication of poverty. The Fund was being asked by its own governing board to pay more attention to those issues. The fight against poverty was emerging as one of the greatest challenges of the times and one that should engage all the energies of “our organizations”. It was also likely to be on of the major themes of the Millennium Summit next year.

She said that first, a number of the Organization’s agencies had developed considerable expertise in poverty-eradication strategies. She hoped the joint poverty-reduction strategies papers to be developed jointly by the Fund and the World Bank would make as much use of that expertise as possible. Secondly, she underlined the need for coordination “among ourselves” especially at the country level -– one of the key goals of the Secretary-General’s reform programme. “We must all show sufficient flexibility to avoid burdening our developing country partners with competing or overlapping requirements.”

Thirdly, she expressed concern over the declining level of official development assistance (ODA). She was very glad that the IMF had found a creative way to fund the Heavily Indebted Poor Countries (HIPC) Debt Initiative. Clearly without an increase in ODA, poverty eradication goals would be hard to meet. Another issue of common interest was the work on governance. Programmes of technical assistance and capacity building were quite extensive. Nations were being helped to privatize moribund State industries; reform their legal institutional environments; improve public administration; fight corruption; and promote resource development. All of that prepared the groundwork for high levels of foreign and domestic investment.

She said that another area where cooperation between the United Nations and the IMF was essential was post-conflict peace-building. One of the most difficult aspects of that task was that it often involved parallel processes: on the one track, implementing far-reaching political, social and institutional reforms aimed at reducing the root causes of conflict; and on a second track, rigorous economic stabilization and structural adjustment programmes. The problem was that the programmes on the first track almost invariably imposed significant new burdens on government finances, causing interference with stabilization programmes and making additional external financing necessary.

She noted that since the prospect for increasing domestic financing in most war-ravaged countries were very limited, the need for additional external financing would inevitably be acute. Unless the international community made a special effort to facilitate financing for the crucial stage in the transition from post- conflict to durable peace, international and domestic peace efforts might well be jeopardized. She said that whether discussions addressed poverty reduction, improved governance or assisting countries emerging from conflict to find stability and prosperity, the global environment could make the difference. That was why the United Nations had been very interested in the debate over a “new financial architecture”.

She said that while some of the feared impacts of the Asian financial crisis had not materialized, the risks of new crises and slowdown in world economic growth were still significant. There was no time for complacency, she warned. Significant progress had been made but the momentum for reform needed to be maintained. While the Organization and the IMF had been talking to each other over the years, they had only recently started taking with each other. It was being recognized that little good could be done if “we exist as separate pillars of development, with each institution having its own distinct expertise but standing ultimately in magnificent isolation. Today we are much more intertwined and working towards a single, integrated vision of development”, she said.

MICHEL CAMDESSUS, Managing Director of the IMF, shared some of the conclusions of the “exciting” annual meeting of the IMF and the World Bank, while focusing on the Fund. It was recognized that global economic conditions had significantly improved since the last dialogue held in May. In May, it was expected that world output would grow by 2.3 per cent in 1999. Now, it appeared that growth in 1999 would be three per cent. The trends for progress seemed strong. It was expected that growth would continue to pick up in the year 2000. Those projections reflected the current positive global economic conditions. However, many challenges remained in many domains, which related to the difficult management of monetary policy in an environment of low inflation.

The first problem was having better balanced growth among the major market economies, he said. Activities were currently underway in countries to help alleviate domestic imbalances. The slowdown in North America and the pickup in Europe and Japan could help to achieve a more balanced pattern of growth among the major industrialized countries. At stake was the orderly pursuit of global sustainable growth. While that could be achieved there were also risks. Vigilance was well justified in those three groups of countries.

With regard to emerging market economies, recovery was taking place more rapidly than expected, he said. A strengthening of economic activities could be seen in the Asian countries hit hardest by the financial crisis. There was also better than expected recovery taking place in other crisis-hit countries, such as the Russian Federation and Brazil. That had helped to reduce global uncertainties. While recovery was there, it was fragile. A lot would depend on the perseverance of the Asian authorities in maintaining the courageous path of adjustment they were currently undertaking. The decline of inflation in most parts of the world was a good achievement. However, low inflation by itself was not sufficient to guard against macroeconomic instability. Monetary policy needed to be alert to asset- price fluctuations in such an environment.

Among the current problems was the potential adverse consequence for countries associated with the Y2K problem, he said. Businesses, financial institutions and government agencies had made progress to ensure Y2K compliance. However, to resolve the balance of payment problems associated with Y2K, the Fund had created a temporary facility to deal with the financial squeeze that might be experienced by countries. That facility was open to countries with sound economic policies. Its intention was not to flood the world with financing but to give assurances to countries that if serious problems emerged, the Fund would assist to ensure that it did not get out of hand.

He then turned to two specific problems -- poverty reduction and the reform of the financial architecture. A lot had been learned in the Fund about the connection between sound economic policies, sound economic growth and social development. It had been well demonstrated that low fiscal deficit led to economic growth, which was the single most significant factor in reducing poverty and inequalities. That relationship was not only linear, but had a circular effect. Proper social policies were also an indispensable factor for the sustainability of sound monetary and economic policies. It had become obvious that poverty reduction should more explicitly be made a more central element of the IMF’s strategies.

To highlight that new emphasis in the Fund, he said that the Fund was transforming its Enhanced Structural Adjustment Facility (ESAF) into a new poverty reduction and growth facility. That would involve strong country ownership and proper participation of civil society in devising national strategies. The second element was that social programmes aimed at poverty reduction would be taken into account when deciding which programmes to finance. Thirdly, there would be a greater emphasis on good governance. Fourthly, the Fund would give high priority to a limited number of key reforms, which were critical for the achievement of social goals. He looked forward to the contributions of the United Nations agencies. The Fund would strive to make macroeconomic frameworks compatible with social objectives, and continue to question the level of unproductive spending in countries to ensure that adequate room existed in national budgets to allow governments to deliver social services.

With regard to debt reduction, he said that the numbers were impressive. As far as the IMF was concerned, the financing was there. The international community had established the link between debt reduction and human development. That would make a big difference among 41 poorest countries only if they committed to put into place frameworks, policies and structural adjustment programmes to allow their growth rates to be higher. That was an essential pillar of the new financial and monetary structure. There was still a need to include the private sector in stalling and in dealing with financial crises. There was also a need to make progress in adapting global exchange regimes to the new economic environment. He was reasonably optimistic without being complacent.

FRANCESCO PAOLO FULCI (Italy), President of ECOSOC, said that the Council’s central preoccupation this year had been the eradication of poverty. That became particularly clear when the Council adopted a Ministerial Communiqué which integrated employment and the gender dimension into the struggle against poverty. It had received considerable attention during the Council’s deliberations on African development. Poverty remained widespread in Africa. Of the 41 HIPCs, 33 were in that continent. Discussion of the subject culminated in the adoption of Agreed Conclusions which highlighted the link between peace, democracy, human rights and development.

He said that the Council had recently given greater visibility to humanitarian affairs. This year it had addressed the theme “international cooperation and coordination and response to humanitarian emergencies, particularly in the transition from relief to rehabilitation, reconstruction and development”. The ECOSOC had stressed, among other things, the need for more flexible financing systems for transitional programming. That, too, was an area where collaboration between the United Nations and the Bretton Woods institutions was essential.

The Council, he concluded, had the ability to bring many different stakeholders together. Not only representatives of Governments, but also of non- governmental organizations (NGOs) as well as academicians, development practitioners in the field, and, last but not least, the heads of the Bretton Woods institutions, the World Trade Organization and the United Nations Conference on Trade and Development (UNCTAD).

NITIN DESAI, Under-Secretary-General for Economic and Social Affairs, said that globalization had varied themes. Most prominent among those themes was concern for the countries left behind by rapid change. The least developed countries in Africa had been highlighted in innumerable debates. Much of the discussion about Africa had also dealt with peace-building. Such a focus on the people left out provided the right context for the discussion of poverty eradication.

Much attention in United Nations debates had also been paid to issues of quality of growth, he said, growth that was more mindful of equity and sustainability. The emergence of those issues could be traced to the conferences of the 1990s. The present meeting also constituted a review of what was in fact happening with the implementation of the recommendations that came out of those conferences. One recurring theme had been the absence of the support the developing countries had been expecting. The issue of financing for development was very much on the agenda of the Second Committee (Economic and Financial). In many ways, all those issues and considerations were coming together in the social development process now being discussed in the General Assembly. There were plans for a main event in 2001, highlighting all such considerations.

Dialogue on Poverty Eradication and HIPC Initiative

Opening the dialogue on poverty eradication and the HIPC Initiative, MR. FULCI said if poverty was to be halved by the year 2015 major efforts had to be made -- or “we will never get there”. Poverty-eradication targets must be embedded in the macroeconomic policy framework and in structural adjustment policies. Governments must develop reduction strategies and move from lip service to concrete actions aimed at eradicating poverty.

There was therefore a need to address issues such as adequate nutrition, primary health care, gender equality, productive employment, education for all, and above all accelerated and sustainable job creation and economic growth. That would require a major mobilization of resources at both national and international levels. Increased and better access to international financial flows, reduction of heavy external debt burdens and market access were essential to many countries in their poverty-reduction strategies.

ANTHONY BOOTE, Assistant Director, Official Financing Operations Division, Policy Development and Review Department, IMF, said debt relief was not a panacea and would not solve all the problems of poorer countries. A key tenet of the HIPC was that debt relief should encourage and reinforce strong reform measures and adjustment programmes. He said it was not just a question of debt relief leading to poverty-reduction but more a question of the effective use of all government resources to that end. There was therefore a need for a comprehensive approach to poverty reduction. That strategy would address the obstacles to more rapid growth, and to wider participation by various actors in the benefits of growth.

At the local level, he continued, that broad-based participation must include civil society, the donor community, multilaterals and the United Nations family at the local level. There also had to be an emphasis on transparency, accountability and good government. Poverty reduction goals should be linked to international development strategies. Indicators should also measure the implementation and success of strategies.

In summary, he said strategies should put poverty reduction into a macroeconomic framework with countries in the driving seat. That would also require closer collaboration between institutions. The objective of the new approach would address long-term goals. What needed to be demonstrated in an accountable and transparent way was the effective use of aid resources.

THOMAS A. BERNES, Executive Director, IMF, said that the HIPC Initiative’s, provision of high-scale debt relief offered the opportunity for growth. The initiative had been designed to meet three criticisms: lack of ownership by the developing countries; inadequate coordination by receiving countries, institutions and bilateral donors; and the measurement of results.

The IMF staff had addressed those issues, he said, but the best way of learning was simply by doing. A new framework to address them would involve a change of culture on the part of the international institutions. It would involve working together with other international organizations and bilateral donors. More effective collaboration was essential. The IMF and the World Bank were making a good start, but the road ahead would not be easy.

He said that during the Asian crisis, social sector issues had come to the front for the first time. The fund had responded by directing its thinking towards a more holistic approach. One of the problems that had to be addressed was to what extent the international community could agree on international surveillance. How could the IMF board address questions like ownership of countries? This was a very difficult issue. Indeed, the extent to which the IMF could address such issues was a matter of debate.

PERCY MANGOAELA, Vice-President of the Economic and Social Council (ECOSOC), said that the total external debt of developing countries was estimated at $2.5 trillion. At the same time, the figures masked the real burden carried by those countries. The Asian tigers had been going through difficulties in recent years and the situation in Indonesia still appeared precarious. As for the HIPC initiative, the debt overhang of those countries was far from being lifted. The ratio of debt to exports was the highest ever reached by a group of developing countries. However, encouraging initiatives were being taken by the international community, such as the Cologne initiative, which was particularly welcome considering the slow pace of the HIPC Initiative. The slow pace of the HIPC Initiative could be attributed to the complexity of the process itself, as well as the financing constraints.

Another encouraging sign was the linkage between debt relief and poverty reduction, he continued. The IMF and the World Bank should assist countries in devising poverty eradication programmes. The assistance of the Bretton Woods institutions and the entire international community was essential. The United Nations system had come up with several recommendations. The list of HIPCs should be reviewed and the time frame for implementation extended. Also, the eligibility criteria should be revised. Also, he said, the ODA debt of those countries should be cancelled and full cancellation of bilateral debt for post-conflict countries should be considered. Debt relief should not be at the expense of ODA. It was incumbent upon all, the United Nations system and the Bretton Woods institutions, to lead the process of reversing the declining trend in ODA. The linkage between debt relief and poverty reduction was crucial, with debtor countries determining their own priorities.

Responses to questions

STEPHEN PAUL COLLINS, Board of Directors of IMF, responding to a question on the Fund’s approach to development, said poverty eradication was a modern and more positive way of looking at the question. The IMF approach was both implicit, and explicit and rested on collaboration with other organizations, the United Nations Development Programme (UNDP) and countries and their relevant governments.

Replying to a question on what the United Nations could do in relation to poverty-reduction strategy papers, he reiterated the point that countries must own the relevant poverty-reduction papers, which must be endorsed by the Bank and which enjoyed the participation of all actors in the society. The international community could ensure that all assistance efforts coincided with core government systems. There was therefore a need for parliamentary approval. The United Nations should join forces with the IMF and the World Bank to adopt poverty-reduction strategy plans.

ALEXANDRE BARRO CHAMBRIER, Board of Directors of IMF, said while collaboration with countries over the last five years had achieved considerable progress in macroeconomic stability and structural reform, there was still a need to go much further through partnership. More was needed in terms of growth rates, quality and linkages to poverty-reduction strategies. The new criteria put forward by the boards of the Fund and the Bank would provide more flexibility and would enable more countries to benefit from initiatives while enhancing national efforts to achieve growth rates.

He said countries had to be in the driving seat in their poverty-reduction strategy plans. He agreed with the view that ownership in Rwanda was strong, and the country had achieved considerable progress despite difficulties in mobilizing capacity. It was hoped to go further in helping that country to reinforce the peace process. It was also critical to tackle the question of the Rwandan debt. The country was eligible for the HIPC initiative and it was also hoped that a completion point would be met as soon as possible.

HERNAN OYARZABAL, IMF, said that a few years ago, the Fund had placed very little emphasis on social programmes, and had basically focused on short-term solutions to social problems. The solutions to such problems, however, were medium and long-term in nature. The basic focus had been on the application of fundamental economic policies. He wished to draw attention to three points brought forward by the representative of El Salvador. First was ownership, both on the part of the State and society as a whole. Secondly, the representative had referred to the fact that her country was receiving popular support for its policies. Thirdly, it was through people’s work that the solutions would be found. That was the key to finding solutions. Advocating a participatory approach showed a change in attitude, which reflected the changes taking place in countries and in international financial institutions. Lastly, developing countries must have access to markets, essential for economic and commercial growth.

ABBAS MIRAKHOR, IMF, said that many questioners seemed to dwell on the new vocabulary of “ownership”, “peace-building”, and so forth. However, in the IMF none of those terms could be considered “new”. Twelve years ago, the staff of the Fund had heard its Managing Director say that they had to become concerned with poverty -- long before other international financial institutions had started to address the question. The Fund was now embarking on a new programme, with the experience of old programmes behind it. Ownership, coordination and measurement were the three main concerns at the moment.

Asked why more had not been done more quickly, MR. BOOTE said that there was a good chance that with the full cooperation of the countries concerned, the targets of the Cologne Initiative could be achieved. As to whether countries needed ESAFs to receive HIPC assistance, he said that they did -- with the country in the driver’s seat. Much had been said about funding for the HIPC Trust Fund. Significant commitments to that Fund had been made at the annual meeting and the funding process was continuing.

MR. CAMDESSUS, addressing the feasibility of achieving the targets set for 2015, said that some time had been lost recently. The targets were feasible but in danger if the chances for growth could not be enhanced and if poverty eradication could not be placed at the heart of economic strategies. If the average growth rate in developing countries of four per cent continued, the objective of poverty reduction would be reached only in South Asia and China. The goal was to reach the objective in all poor countries, especially in Africa. What was needed then was more growth, for which several things were necessary: better structural adjustment policies and strategies owned by the countries; additional ODA; more efforts to create micro-credit, especially in rural areas; and improved governance. Also, peace was a must for development.

He said that while the Fund was not going through major philosophical changes, it was undergoing two major transformations. The first was the decision to do better by doing together. That applied to its relationship with the World Bank as well as the relationship between the United Nations and the Bretton Woods institutions. At the same time, the Fund was trying to deal with four dichotomies. It was now trying to put together actions on debt reduction and on poverty alleviation. The second dichotomy was between social policies and macroeconomic ones. The third was between finance and development on the one side and trade on the other. Last was the dichotomy between peace and development.

MAKARIM WIBISONO (Indonesia), Vice-President of the ECOSOC, said while it was true that development could not succeed without peaceful conditions, it was equally evident that peace and stability could not endure in the absence of development and shared prosperity. The challenges of peace and development were thus intertwined. The concept of peace-building was built on the premise that the two were intimately linked, and must be addressed simultaneously and comprehensively.

He said the challenge of post-conflict situations was of particular concern today. Rebuilding socio-political institutions and laying the foundations for the resumption of development in war-torn societies was at the heart of that challenge. Societies emerging from conflicts called for comprehensive and integrated efforts that helped create a stable political environment through reconciliation and institution-building. At the same time, those efforts would provide emergency and humanitarian assistance, moving into rehabilitation, reconstruction and development in a smoothly dovetailed framework.

In such situations, he continued, the United Nations was required to contribute to the re-establishment of socio-economic conditions that went beyond the normal requirements of development assistance. The Organization was most often required to take the lead in such situations, but it could not succeed without the cooperation of other partners, particularly the Bretton Woods institutions. The question now was how to strengthen that partnership and move forward with flexibility and speed, while respecting the mandates and competencies of the respective institutions.

NANCY L. HAPPE, Chief, Development Issues Division, IMF, said that conflicts had affected a wide range of Fund members, especially some of the poorest. The primary role of the IMF was to re-establish a stable macroeconomic situation in countries. It provided advice and technical assistance, and where appropriate, financial assistance. The Fund’s policies stressed that good coordination with other institutions and organizations was essential. Since 1995 the IMF had provided post-conflict assistance on an emergency basis. Fund conditionality was tailored to the particular circumstances of particular countries. The aim was to move a country as soon as possible from emergency assistance to a regular IMF programme.

Many post-conflict countries were heavily indebted and could apply for relief under the HIPC Initiative. But some post-conflict countries needed help with large overdue loans. On a case-by-case basis, the IMF was prepared to take such special circumstances into account -- but that in itself would not solve the problem. Resolution of the debt problem was to be sought in the HIPC initiative.

AREND KOUWENAAR, Deputy Division Chief, East African Division II, African Department, said that during the period 1994-1996 in Rwanda, the IMF had focused on humanitarian aspects. From 1997 to present, the focus had been on structural adjustments. After 1994, the Fund had taken took part in the United Nations efforts in Rwanda. It had concentrated on technical assistance, in building and maintaining economic institutions, economic policy advice to help the Government of Rwanda achieve rapid economic liberation, and had also cooperated with donors. In 1995, Rwanda moved from emergency aid to a full-fledged member of structural adjustment programmes. However, with the repatriation of refugees in 1997, it reverted to emergency aid.

In 1997, there had been strong capacity support in the macroeconomic area. The country had gone through a comprehensive three-year structural adjustment programme. There had also been strengthening of capacity building and a focus on improving the level and efficiency of social spending. In addition, improved teacher training and development of educational curricula had been put in place to fill the gap left by the genocide. The recurring social spending in the budget had been increased and was expected to meet 6 per cent of Gross Domestic Product (GDP).

He said that, overall, Rwanda had made good progress in its transition from a post-conflict situation to one of sustainable growth. There had been improvements in social indicators, school enrolments, increases in the number of teachers and the number of functioning healthcare systems. The Government had displayed the determination to achieve macroeconomic stability. The factors which slowed down progress were the slow speed of capacity-building and low civil-service salaries.

MR. CHAMBRIER said that it was important to bear in mind the mandate of the Fund, which was a financial and monetary institution. The case of Rwanda illustrated how the United Nations and the international financial institutions could work together. It was important to focus on knowing the roots of the conflict. What the Fund had learned from its experiences was that good economic policies, poverty-alleviation programmes and good governance would lead to lasting peace. The international community should put a greater emphasis on controlling arms sales, which was an important issue. The issue of military expenditure had also been raised by the Fund. In post-conflict cases, those countries must devote priority spending to the social sector and to infrastructure.

He said that it was necessary to strengthen the catalytic role of the Fund. It had increased its flexibility in improving the terms of emergency financial assistance. One of the difficulties of the Fund’s task was related to those post-conflict countries that were facing arrears with regard to the international financial institutions. The Fund’s involvement in post-conflict countries had produced some results. For such results to materialize, the international community must strengthen its efforts. It was also critical for Governments to show their determination as well as clear economic strategies.

JANIS PRIEDKALNS (Latvia) said it was a tribute to the spirit of cooperation that this dialogue could take place. As had been noted, the strategy on how to deal with post-conflict economies was known; however, there were some dilemmas. Although the United Nations had to be neutral, sometimes it was necessary to take actions which were unpopular with a specific country. That was one of the areas where one had to tread carefully.

Another dilemma was the fact that international institutions had to play the role of bankers, especially in post-conflict situations which required additional financial resources in order to raise macroeconomic stability and national reconciliation. An excellent example of implementation had been Haiti, where ECOSOC, invited by the Security Council, had provided a programme of support. That had been a new challenge for the Council. All partners were thanked for giving this effort a human face.

KAMALESH SHARMA (India), Co-Chairman of the Ad-hoc Workgroup on Financing for Development, said that the Secretary-General had emphasized the need to bring all the streams within the Organization together in looking at why the dignity of human beings was not moving in the direction it should, even though there had been many instruments in place. To that end, a high- level event should take place in 2001. The Ad-hoc Workgroup’s work during last year had been very successful. The entire agenda had been discussed in a spirit of partnership and total commitment.

The Workgroup had prepared a set of consensus recommendations to be looked at, he said. There were recommendations on scope, agenda and the nature of the event, in which a holistic approach was maintained. The Second Committee (Economic and Financial) would take up consideration of the recommendations, which would hopefully result in a draft resolution supporting them.

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