SECOND COMMITTEE APPROVES THREE DEVELOPMENT-RELATED DRAFTS

Press Release
GA/EF/2905

SECOND COMMITTEE APPROVES THREE DEVELOPMENT-RELATED DRAFTS

Vote Taken, at United States Request, on Draft Text Related to 'Stable International Financial System'

The General Assembly would call for the renewal of national, regional and international efforts to promote the greater involvement of the private sector in the prevention and resolution of financial crises, according to one of two texts approved this morning by the Second Committee (Economic and Financial).

Approved by a vote of 120 in favour to 1 against (United States) with no abstentions, the text entitled “towards a stable international financial system, responsive to the challenges of development, especially in the developing countries” would also have the Assembly underscore the importance of a more equitable distribution of the cost of adjustments between the public and private sectors, and between debtors, creditors and investors.

The representative of the United States, who had requested that a vote be taken on the draft text, said the terms of the draft placed an undue burden on the role of the international community, and lacked the needed balance of a call to all countries to take charge of their own policy regimes. Several delegates expressed disappointment at the request for a vote after consensus on the text had been reached through negotiations, and warned that it could set a “dangerous” precedent for the Committee’s future operations.

Also this morning, the Committee approved, without a vote, a text on implementation of the Programme of Action for the Least Developed Countries for the 1990s, by which the Assembly would decide to hold the Third United Nations Conference on the Least Developed Countries in Brussels. It would further decide to defray the cost of participation of two government representatives from each least developed country in the intergovernmental preparatory committee meetings and the Conference itself, through the use of unspent balances arising from the programme budget of the United Nations for the biennium 1998-1999.

The Committee also approved without a vote a draft decision which would have the Assembly take note of the report of the Secretary-General on the state of preparations for the Third United Nations Conference on the Least Developed Countries, and the report of the Secretary-General on progress in the implementation of the Programme of Action for the Least Developed Countries.

Statements were made by the Committee’s Chairman, Roble Olhaye (Djibouti) as well as the representatives of the United States, Guyana (on behalf of the Group of 77 developing countries and China), Mexico, Nigeria, Indonesia, Kenya, Costa Rica, Finland (on behalf of the European Union and associated States), Australia, Madagascar, Armenia and Djibouti.

The Committee will meet again on a date to be announced in the Journal. Committee Work Programme

The Second Committee (Economic and Financial) met this morning to take action on draft resolutions regarding macroeconomic policy questions and sustainable development and international economic cooperation.

Macroeconomic Policy Questions

With regard to the financing of development, the Committee had before it a draft text, submitted by the Vice-Chairman, Giovanni Brauzzi (Italy), based on informal consultations held on draft resolution A/C.2/54/L.38, entitled towards a stable and equitable international financial system, responsive to the challenges of development, especially in the developing countries (document A/C.2/54/L.72). It would have the Assembly call for the renewal of national, regional and international efforts to promote the greater involvement of the private sector in the prevention and resolution of financial crisis. In that context, it would underscore the importance of a more equitable distribution of the cost of adjustments between the public and private sectors, and between debtors, creditors and investors, and request the United Nations Conference on Trade and Development (UNCTAD) to inform the General Assembly at its fifty-fifth session on the work it has undertaken on this matter.

The Assembly would request the Secretary-General to support, the ongoing work on identification of measures that will contribute to a more stable and predictable international financial system responsive to the challenges of development, in particular of developing countries. It would request the Secretary-General to make available the results of those exercises to the General Assembly at its fifty-fifth session. Further, it would request the Assembly President to send a copy of the present resolution to the Boards of Directors of the World Bank and the International Monetary Fund (IMF), inviting them to consider it in their discussions of this matter.

Sustainable Development and International Economic Cooperation

Also before the Committee was a draft resolution, submitted by Vice- Chairman Alexandru Niculescu (Romania), based on informal consultations held on draft resolution A/C.2/54/L.39, on implementation of the Programme of Action for the Least Developed Countries for the 1990s (document A/C.2/54/L.73). By its terms, the Assembly would decide: that the Third United Nations Conference on the Least Developed Countries will be held in Brussels; that the meeting of the intergovernmental preparatory committee envisaged in paragraph 4 of its resolution 53/182 will be organized in New York in two parts, in the third quarter of 2000 and the first quarter of 2001, each for five working days; that the Secretary-General of the Conference will organize the three expert-level preparatory meetings provided in paragraph 4 of its resolution 53/182 at venues and for durations deemed most appropriate in consultation with Member States; and to defray the cost of participation of two government representatives from each least developed country in the intergovernmental preparatory committee meetings and the Conference itself, through the use of unspent balances arising from the programme budget of the United Nations for the biennium 1998-1999.

Further, the Assembly would decide that the Programme of Action will continue to provide the framework for national and international action for the least developed countries until the adoption by the Conference of the next programme of action. It would request the Secretary-General to continue to give high priority to the implementation of the Programme of Action on a system-wide basis and in the context of the follow-up of all major United Nations conferences and summits as well as in all forthcoming events, including the tenth session of UNCTAD, the event of a high-level international intergovernmental consideration of financing for development and its preparatory process, and the Millennium Assembly.

Also before the Committee was a report on programme budget implications of draft resolution A/C.2/54/L.73 (document A/C.2/54/L.74). According to this document, should the Assembly adopt the draft resolution, additional provisions would be required over and above the resources included in the proposed programme budget for the biennium 2000-20001, as follows: $616,400 under section 11.A, and $30,000 under section 26 of the proposed programme budget. These provisions would represent a charge against the contingency fund, and as such would require a related additional appropriation.

Action on drafts:

Macroeconomic Policy Questions

Committee Vice-Chairman, Giovanni Brauzzi (Italy) introduced the draft text, based on informal consultations held on draft resolution A/C.2/54/L.38, entitled "towards a stable and equitable international financial system, responsive to the challenges of development, especially in the developing countries” (document A/C.2/54/L.72).

The representative of the United States called for a recorded vote.

The Chairman, Rolbe Olhaye, expressed disappointment that the Committee had been forced into that position. The painstaking process of informal informals and formal informals had been duly followed, and as consensus had been reached, ad-referendum, in the formal informals, the draft resolution had become a Vice-Chairman’s text. The fact that a vote was requested on a Vice- Chairman’s text was setting a dangerous precedent which could seriously undermine the successful working methods of the Second Committee.

The representative of Guyana, on behalf of the Group of 77 developing countries, with China and Mexico, said that he shared the Chairman’s disappointment. Several weeks ago, he had introduced draft resolution L.38, inspired by two major considerations: first, the need to foster a greater sensitivity to the mentioned development, in particular the needs of developing countries; second, the conviction that the United Nations had an important role to play in consensus building at the international level. The draft had been presented with the sense that those parameters were shared by the Committee, in the expectation of securing a consensus on those issues.

He said that negotiations had been conducted in good faith, through an intense but constructive process of consultations, with full involvement of all interested delegations. The spirit of consensus had prevailed to the end, and agreement on the text had been reached. He regretted that the consensus was not sustained. That would indeed set a dangerous precedent for the work of the Second Committee. The Group of 77 would vote in favour of the draft resolution, and thereby honour the consensus.

The representative of Mexico said that the text had as its immediate background General Assembly resolution 53/172. After consultations with the Secretary-General, Mexico’s Government had convened a regional high-level meeting on the subject, held in Mexico in September. The results of that meeting had been submitted to the General Assembly as an official document, A/54/364. He had had the honour of co-sponsoring draft resolution A/C.2/54/L.38, and had worked closely with all delegations participating in the negotiations.

He said that draft resolution L.72 was the product of intensive negotiating effort. The purpose was to achieve the necessary consensus for achieving a stable international financial system which could respond to the needs of developing countries. The United Nations had to establish international consensus in a context of combined efforts with the Bretton Woods Institutions. Mexico would continue to support a wide-ranging consensus on an early warning system to prevent international financial crises.

The representative of Nigeria shared the disappointment expressed by the Chairman. He thanked everybody who had participated in the long and painstaking negotiations leading to the end result. He was also disappointed because of the effect today's vote could have for the future. The precedent could indeed be dangerous. Nigeria would vote honouring the consensus, but it would vote with a heavy heart. It would have been better had the vote been avoided.

The representative of Indonesia, facilitator of the informal informals, thanked all delegates who had participated in the negotiations leading to the Vice-Chairman’s consensus text, which had lasted almost two weeks. Those negotiations had been conducted in good faith with a spirit of cooperation and open-mindedness. The text on which consensus had been reached was a product of good will. Why, after such a long process, did a vote have to be requested? What was the meaning of all that dedicated consensual effort if the text had to be voted on in the end? What would the implications be? Could everything that had been agreed upon now be reopened, due to late advice from capitals, or had negotiations not been conducted in good faith? The action the Committee was about to take should not recur, she said, if the Committee’s future credibility was to be sustained.

The representative of Kenya supported the expressed sentiments. He asked whether the Committee might hear the grounds for requesting a vote before the vote took place.

Explanation of Vote before Vote

The representative of the United States said that he could not support the resolution because it exceeded the mandate of the General Assembly of the United Nations. He opposed a multitude of the recommendations which prejudged the work of the international financial institutions. The draft resolution constituted, at a minimum, interference in the normal course of business of the international financial institutions.

He said that the International Monetary Fund, the World Bank and the Financial Stability Forum remained the competent arenas for discussions of continuing reforms within the international financial system. The draft resolution placed an undue burden on the role of the international community, and lacked the needed balance of a call to all countries to take charge of their own policy regimes. The resolution therefore underplayed the extent to which individual nations’ actions determined their future.

The draft resolution was approved by vote of 120 delegations in favour, 1 delegation against (United States), and no abstentions.

Explanation of Vote after Vote

The representative of Costa Rica said that treaties existed so that they could be complied with. Everything had a procedure. When a definitive consensus had been reached, it was difficult to understand why the point of view expressed today had not been expressed previously. Costa Rica had voted with the Group of 77 and China, and expressed the support and recognition of the Vice-Chairman of the Second Committee.

The representative of Finland, speaking on behalf of the European Union, said the Union had voted in favour of the resolution. Cyprus, Bulgaria, Czech Republic, Hungary, Lithuania, Malta, Poland, Romania and Slovakia had aligned themselves with the vote. The draft resolution was an important one for the European Union. After extensive consultations a consensus had been reached. That did not mean, however, that everybody was happy with the results. Calling for a vote was a right of every State, but he hoped that in the Second Committee that right would be used as sparingly as possible.

The representative of Australia said that he had voted in favour of the draft, despite some shortcomings. The Committee should draw a lesson from today's events. He suggested a more expeditious start of proceedings, and an actual dialogue.

The representatives of Madagascar, Armenia and Djibouti said that they would have voted in favour of the draft text had they been present.

Draft resolution A/C.2/54/L.38 was withdrawn by its sponsors.

Sustainable Development and International Economic Cooperation

Speaking before the introduction of the draft resolution, the Chairman, ROBLE OLHAYE (Djibouti), said that the resources proposed in the programme budget implications in the statement contained in A/C.2/54/L.74 were additional to the resources in the proposed programme budget for the biennium 2000-2001. Should the additional resources prove to be insufficient to enable the United Nations Conference on Trade and Development (UNCTAD) to implement the resolution about to be approved, the Secretary-General might bring the subject to the attention of the Assembly at its fifty-fifth session.

The Vice-Chairman of the Committee, Alexandru Niculescu (Romania), introduced the draft resolution, based on informal consultations held on draft resolution A/C.2/54/L.39, entitled "implementation of the Programme of Action for the Least Developed Countries for the 1990s" (document A/C.2/54/L.73).

The draft resolution was approved without a vote.

In light of the approval of the draft, the text contained in A/C.2/54/L.39 was withdrawn by its sponsors.

The Chairman proposed the following draft decision: “The General Assembly takes note of the following documents: report of the Secretary- General on the state of preparations for the Third United Nations Conference on the Least Developed Countries (A/54/271); and report of the Secretary- General on the progress in the implementation of the Programme of Action for the Least Developed Countries (A/54/269 and Corr.1)".

The draft decision was approved without a vote.

The Chairman then said he had held a meeting with the Assembly President this morning. While the President was aware of the importance and relevance of the Committee’s work, he nonetheless informed the Chair that the Committee had gone over its deadline by 12 days. It was imperative for the Committee’s work to be finalized by Thursday, 16 December.

(ANNEX FOLLOWS)

ANNEX

Vote on Financing of development

The draft resolution entitled “towards a stable and equitable international financial system, responsive to the challenges of development, especially in the developing countries” (document A/C.2/54/L.72) was approved by a recorded vote of 120 in favour to 1 against, with no abstentions:

In Favour: Algeria, Angola, Antigua and Barbuda, Argentina, Australia, Austria, Bahamas, Bangladesh, Barbados, Belarus, Belgium, Benin, Bolivia, Botswana, Brazil, Brunei Darussalam, Bulgaria, Burkina Faso, Cambodia, Cameroon, Canada, Cape Verde, Chile, China, Colombia, Costa Rica, Côte d’Ivoire, Croatia, Cuba, Cyprus, Czech Republic, Denmark, Dominican Republic, Ecuador, Egypt, Equatorial Guinea, Eritrea, Ethiopia, Fiji, Finland, France, Gabon, Georgia, Germany, Ghana, Greece, Grenada, Guatemala, Guyana, Haiti, Hungary, Iceland, India, Indonesia, Ireland, Israel, Italy, Japan, Jordan, Kazakhstan, Kenya, Lao People’s Democratic Republic, Lesotho, Liechtenstein, Lithuania, Luxembourg, Malaysia, Maldives, Malta, Marshall Islands, Mexico, Monaco, Mongolia, Mozambique, Namibia, Nepal, Netherlands, New Zealand, Nigeria, Norway, Oman, Pakistan, Panama, Papua New Guinea, Paraguay, Peru, Poland, Portugal, Qatar, Republic of Korea, Romania, Russian Federation, Saint Lucia, San Marino, Senegal, Singapore, Slovakia, Solomon Islands, South Africa, Spain, Sri Lanka, Sudan, Suriname, Sweden, Syria, Thailand, Togo, Tunisia, Turkey, Uganda, Ukraine, United Arab Emirates, United Kingdom, United Republic of Tanzania, Uruguay, Venezuela, Viet Nam, Yemen, Zambia, Zimbabwe.

Against: United States.

Abstain: None.

Absent: Afghanistan, Albania, Andorra, Armenia, Azerbaijan, Bahrain, Belize, Bhutan, Bosnia and Herzegovina, Chad, Comoros, Congo, Democratic People’s Republic of Korea, Democratic Republic of the Congo, Djibouti, Dominica, El Salvador, Estonia, Federated States of Micronesia, Gambia, Guinea, Guinea-Bissau, Honduras, Iran, Jamaica, Kiribati, Kuwait, Latvia, Lebanon, Libya, Madagascar, Malawi, Mali, Mauritius, Morocco, Myanmar, Nauru, Nicaragua, Palau, Philippines, Republic of Moldova, Rwanda, Saint Kitts and Nevis, Saint Vincent and the Grenadines, Samoa, Saudi Arabia, Seychelles, Sierra Leone, Slovenia, Swaziland, Tajikistan, The former Yugoslav Republic of Macedonia, Tonga, Trinidad and Tobago, Turkmenistan, Uzbekistan.

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