UNITED STATES TREASURY SECRETARY TELLS ECONOMIC AND SOCIAL COUNCIL GLOBAL DEVELOPMENT GREATEST CHALLENGE FACING HUMANITY

Press Release
ECOSOC/5893

UNITED STATES TREASURY SECRETARY TELLS ECONOMIC AND SOCIAL COUNCIL GLOBAL DEVELOPMENT GREATEST CHALLENGE FACING HUMANITY

Council Opens 2000 Session, High-level Segment, With Focus on Role of Information Technology in Global Economy

Global development was the greatest challenge facing humanity and it required global consensus with everyone doing their part, the Treasury Secretary of the United States told the Economic and Social Council this morning, as it began its substantive session for 2000.

Secretary Lawrence H. Summers told the Council that without strong policies in developing countries and the right approaches from the industrial world, there would be no effective development and no progress. The importance of the development challenge and the challenges posed by new technologies, including information and communication technology, mandated consensus. Effective implementation was central, he said.

Deputy Secretary-General Louise Frechette said the coming together of government representatives, heads of financial and trade organizations, and business leaders showed the United Nations was making real progress in creating new partnerships. It also underlined the relevance of the Council as a universal forum for discussing current economic and social issues. She added that with strong partnerships, appropriate resources and political will, the digital divide could and would be bridged.

The President of the Council, Makarim Wibisono (Indonesia) in his opening statement, said that to overcome constraints blocking technological access and connectivity for developing countries, national, regional and global strategies were needed to effectively harness the technological revolution. The crucial role of information and communication technologies in promoting development and eradicating poverty had been chosen as the major theme for the high-level segment.

After the opening of the session, a short video presentation conveyed the opportunities and challenges of information and communication technology. Also, an information and communication technology exhibition, running concurrently with the Council’s high-level segment, was opened by the Deputy Secretary-General and the Council President.

The high-level segment then began with a policy dialogue and discussion on developments in the world economy and international economic cooperation. The

Economic and Social Council - 1a - Press Release ECOSOC/5893 11th Meeting (AM) 5 July 2000

heads of United Nations multilateral financial and trade institutions participated.

The President of the World Bank, James Wolfensohn, said putting information and communication technology at the centre of the development agenda would improve markets and enhance the quality of life throughout the world. He said a “digital divide” did exist. If it were overcome, the “digital revolution” would finally give the equity to the world’s poor people that the industrial revolution had not.

The Deputy Managing Director of the International Monetary Fund (IMF), Eduardo Aninat, said bridging the digital divide raised the critical issue of connectivity. Some were connected to the latest high-tech communications and others were not. Not surprisingly, the disconnected happened to be the world's poor. Being disconnected carried the high cost of isolation and marginalization, when there was already a growing gap between the rich and poor nations. It was urgent to achieve a balanced pattern of global growth to ensure needed adjustments in financial markets.

Also participating in the policy dialogue were: the Director-General of the World Trade Organization, Mike Moore; the Secretary-General of the United Nations Conference on Trade and Development, Rubens Ricupero; the Executive Secretary of the Economic Commission for Latin America and the Caribbean (ECLAC), Jose Antonio Ocampo, speaking on behalf of the United Nations Economic Commission for Europe (ECE), the United Nations Economic Commission for Africa (ECA), the United Nations Economic Commission for Asia and the Pacific (ESCAP), and the United Nations Economic and Social Commission for Western Asia (ESCWA); and the Administrator of the United Nations Development Programme (UNDP), Mark Malloch Brown.

The Council will meet again this afternoon to continue the high-level segment of its substantive session for 2000.

Economic and Social Council - 3 - Press Release ECOSOC/5893 11th Meeting (AM) 5 July 2000

Economic and Social Council Work Programme

The Economic and Social Council met this morning to begin its 2000 substantive session. As the Council begins its high-level segment for 5 to 7 July, it will address its main theme, "Development and international cooperation in the twenty-first century; the role of information technology in the context of a knowledge-based global economy".

During the opening session this morning, in addition to ministers and heads of delegation of both the Council's member countries and observer States, participants will include Presidents and Director Generals of the International Monetary Fund (IMF), World Bank, the United Nations Conference on Trade and Development (UNCTAD), the World Trade Organization (WTO), the heads of the main United Nations funds, programmes and specialized agencies and representatives of non-governmental organizations and the media.

The opening statement will be made by the Council President, Makarim Wibisono (Indonesia), followed by a video presentation on information and communication technology (ICT) and development. That will be followed by addresses from Deputy Secretary-General Louise Fréchette, and Secretary of the Treasury of the United States Lawrence H. Summers. A high-level policy dialogue with the international financial and trade organizations will then take place, with the participation of James Wolfenson, President of the World Bank, Mike Moore, Director-General of the WTO, and Rubens Ricupero, Secretary-General of UNCTAD.

Also this morning at 10:15 a.m., the President of the Council and the Deputy Secretary-General will open an unprecedented ICT public exhibit, which will be staged concurrently with the high-level Council meeting. The exhibit will bring together educational displays by private sector firms from all over the globe, international agencies and governments.

The Council will have before it a report of the Secretary-General on the role of ICT in development (document S/2000/52). It will also have before it a report of a high-level panel of experts on ICT (document A/55/75-E/2000/55). (For a summary of these two reports, see Press Release ECOSOC/5892 of 28 June.)

In addition, the Council will have before it, the following reports by its regional commissions on the theme of the high-level segment: Contribution of the Economic Commission for Africa (ECA)(document E/2000/70); Contribution of the Economic and Social Commission for Western Asia (ESCWA) (document E/2000/71); and Contribution of the Economic Commission for Europe (ECE) (E/2000/72). Also before the Council is a report of the Committee for Development Policy on its second session for the year 2000 (document E/2000/33).

The following reports on the high-level theme are also before the Council but are yet to be issued: Contribution of the Economic and Social Commission for Asia and the Pacific (ESCAP) (document E/2000/73); Contribution of the Economic and Social Commission for Latin America and the Caribbean (ECLAC) (document E/2000/74); and the World Economic and Social Survey 2000: the world economy in 2000 (document E/2000/50 (Chapter 1)).

The report on the contribution of ECA (document E/2000/70) states that the Commission held a first African Development Forum from 24 to 28 October 1999 on the theme of the challenge presented to Africa by globalization and the information age. The purpose was to define African-owned and African-led strategies for engaging with the global information economy. A major goal was to develop and support African initiatives to shape the African information age.

Over 950 participants from all regions of the world took part, the report continues. Governments, the private sector, civil society and organizations were represented. It was decided to hold a post-Forum Summit to present the most promising strategies at the highest levels of leadership. The summit would accelerate African development by examining the increased use of information and communication technologies within an overall strategy targeted at key development sectors, such as education and governmental policy change.

The Forum based its recommendations on four themes and the views of its stakeholder groups, including youth and the Africa diaspora group, the report states. On the theme of globalization and the information economy, it outlined steps for Africa to take to join the information economy and address barriers to e-commerce through such initiatives as sub-regional cooperation and developing the capacity to defend African positions in global forums. On the use of ICT for improved governance, the Forum recommended that ICT support the four basic areas of poverty reduction, meeting basic human needs, improving public administration and enhancing democratization.

To strengthen Africa's information infrastructure, the report continues, specific recommendations centre on creating an environment conducive to innovation, competition and investment. A strengthening of regulatory bodies to involve all stakeholders and balance diverse interests was also called for. Finally, on the theme of democratizing access to the information society, the forum stressed the importance of school networking and distance learning. It also suggested measures to broaden access, such as the use of intermediaries including information brokers.

According to the report on the contribution of ESCWA (document E/2000/71), on 15 and 16 May, about 30 experts, including 20 from that Commission, took part in a panel to discuss the overall theme: information technology and development priorities -- competing in a knowledge-based global economy.

The report says that in four sessions the following areas were addressed: information technology and the knowledge-based global economy; the status of information and communications technologies in selected ESCWA countries; capacity- building in priority areas of information and communication technologies; and emerging issues in information and communication technologies and their applications. Those themes were adopted with a view to generating an expert perspective from the ESCWA region for the Council's substantive session. A considerable number of important recommendations were put forward by experts both directly and indirectly related to the those raised by the Secretary-General on the theme under consideration.

Among the key recommendations raised by the experts is the convening under United Nations auspices of an international conference devoted to deliberating current trends in the merging global knowledge-based economy, ICT capacity- building and development priorities in the twenty-first century. The proposed conference would be designed along the lines adopted in other international conferences convened during the past decade. The upcoming Millennium Assembly would also be a suitable juncture for conducting preliminary preparations for such a conference.

Other recommendations address: capacity-building; ICT infrastructures; policies, strategies and action plans; legislation, regulations and standards; resources for ICT capacity-building; human resource development; new institutional forms; and special initiatives. The report also look at specific ICT applications including: distance education; telemedicine; e-commerce; governance; employment; gender and capacity-building; and new organizational roles and cooperation modalities in capacity-building, including the roles of governments, private enterprise and the United Nations system.

The report on the contribution of the ECE (document E/2000/72) gives a brief overview of the implications of ICT for economic and social development in ECE member countries and suggests appropriate policy responses.

The summary paper argues that specific policy actions are needed at the national and regional levels to: prevent the “digital divide”, contain possible negative effects of ICT; and help the less advanced countries to benefit fully from the ICT revolution. Those actions would include measures aimed at expanding “digital connectivity” across societies and upgrading the skills and knowledge levels of less advanced countries and social groups in the ECE region.

The paper states that over the years, the ECE has accumulated considerable expertise in many ICT-related areas. It can be the forum for discussing region- wide initiatives to address various aspects of ICT development. Bringing together national governments, business leaders, the media, representatives of consumer groups and international organizations, ECE could act as a platform for sharing good policy practices and experiences between more developed and less developed member countries and raise public awareness of the opportunities and risks connected with ICT.

The report of the Committee for Development Policy (document E/2000/33) gives an overview of developments at its second session, which was held from 3 to 7 April. During that session, the Committee deliberated on the role of information technology in development and made suggestions regarding a draft of a new international development strategy to be submitted by the Secretary-General to the Economic and Social Council and the General Assembly. The Committee also conducted its triennial review of the least developed countries.

The report notes that as a result of information technology, a new kind of economy is emerging that is based on information. Along with capital and labour, information is a critical resource for the creation of income and wealth. While a few developing countries are taking advantage of the opportunities offered and have already reaped tangible benefits, the impact of the information technology revolution on overall development remains uncertain. Recent experience, as well as projections for the future, show widening gaps in income, wealth and welfare both within and among countries. The evolving digital divide is both a cause and a consequence of such growing inequalities.

The report also notes that in many developing countries, particularly the least developed countries, the educational and other preconditions for effective participation in the information technology revolution are weak. There are also growing concerns about the accessibility of information technology, intellectual property protection, fair competition, content regulation and cultural preservation. Furthermore, the power of information technology, which has so much potential for social good, can also be harnessed for selfish, dangerous or even destructive ends. That raises legal and ethical questions at all levels. Effective and binding mechanisms have yet to be formulated. adopted and implemented both nationally and internationally.

The Committee recognizes that, for a new international development strategy to mobilize and sustain the political support necessary for it to be an effective framework for action, it must have a clear and convincing thrust. It must also be formulated to ensure that implementation can be readily monitored and progress measured. Where progress is found wanting, the needs for change and supplementary action must be identified.

The Committee, therefore, stresses the need to ensure that the formulation of a new international development strategy is informed by a thorough review of what was attempted in previous development decades and what was and was not achieved. It recommends that economic and social developments and policies affecting the achievement of the objectives of the previous development decades should be reviewed, not only for developing countries, but also for developed countries and for the international economic system in general. Without such a balanced review, the analysis of past and current potential and constraints, as well as the establishment of targets and commitments for the future, would be incomplete. Neither the review nor a new international development strategy would reflect the joint and shared international commitments of an effective strategy.

The report also reviews the list of least developed countries, the role of information technology in development and makes a number of recommendations at both national and international levels. The Committee urges governments to create or enhance the information infrastructure and the productive side of information technology in all sectors of the economy. It also highlights a number of critical areas to which the United Nations and bilateral donors should lend support. One such area is widespread and equitable access to communication and information services through the accelerated deployment of a national information infrastructure and its integration into international communication and information networks.

In its review of the least developed countries, the Committee recommends that the list of countries now be composed of the same countries as are already included, but the with the deletion of Maldives and the addition of Senegal, subject to that Government's acceptance. The list currently has 49 countries on it. Annexed to the report is also a report of the Expert Group Meeting on Testing and Simulations of the Economic Vulnerability Index, which took place in Paris from 29 February to 2 March.

Opening of Session

MAKARIM WIBISONO (Indonesia), President of the Economic and Social Council, opened the Council’s substantive session. The Council then adopted its provisional agenda and proposed programme of work.

In his opening statement, Mr. Wibisono referred to the splendid vision of a bygone era in yesterday’s celebration of the fourth of July with the armada of tall ships. It was a vision of yesteryear’s international commerce and communication, which stood out in stark contrast with today’s digital superhighway. The industrial revolution replaced the tall ships and their pivotal role in the world’s economy at that time. Today, the information and communications revolution was making inroads into the industrial era and creating a new global economic system.

Thus, he said, watching the tall ships held a salient lesson for all, particularly the developing countries. Those countries had largely missed out on tapping into the industrial revolution. “That should not happen again”, he said. They should not miss the opportunities this time around. That was why the Council had chosen the crucial issue of the role of information and communication technologies in promoting development and eradicating poverty as its major theme for the high-level segment. Beyond that, the agenda spanned the whole landscape of the Council’s mandate to promote higher standards of living, full employment and conditions of economic and social progress and development for all.

He then reviewed the major segments of the session. He said the high-level segment would seek to harness the power and promise of information and communications technology. The operational activities segment would address the topics of resourcing operational activities and harmonizing procedures. The coordination segment would deal with, first, assessing progress and second, implementation of the United Nations Centre for Human Settlements (Habitat) agenda. The humanitarian affairs segment would address the delivery of assistance. Finally, the general segment would address issues arising from commissions and subsidiary United Nations organs.

The session was opening at a defining moment of history, he said. Globalization and information technologies had many subtexts. They posed numerous challenges and opportunities to benefit development. Yet, an increasing proportion of the world’s wealth was shuttling in digital form between the most electronically advanced countries. That was resulting in a widening digital divide. Developed economies were being propelled to newly staggering heights, but the majority of developing countries were being bypassed. The Council challenge was to find ways to: overcome the broad spectrum of constraints blocking access and connectivity for the developing countries; facilitate information dissemination; and explore strategies at national, regional and global levels to effectively harness the technological revolution.

Video Segment

A short video on information and communication technology and development was shown, featuring the Secretary-General of the United Nations, Kofi Annan. The video stated that the Internet revolution had been likened to the Industrial Revolution, but the question was whether it would benefit the developing world. The technology could play a crucial role in development. The most up-to-date information could be brought to the most remote areas. In partnership with the private sector, the United Nations had launched some projects to that end. It was the responsibility of all to close the digital gap. The industrialized world had a vital part to play, by opening its markets to products of the developing countries and providing more and better assistance.

Address by Deputy Secretary-General

Deputy Secretary-General LOUISE FRECHETTE said that the coming together of government representatives, heads of financial and trade organizations, and business leaders showed the United Nations was making real progress in creating new partnerships and underlined the relevance of the Council as a universal forum for discussion on current economic and social issues.

After several years of financial turbulence, the world economy was at an advanced stage of recovery. In many countries, though, those gains had not yet been sufficient to compensate for the losses suffered by the poorest people and most vulnerable groups. Many developing countries, especially in Africa, were not sharing in the gains at all. Therefore, efforts must continue to make globalization work for all, she said, a task in which the United Nations could play a leading role.

The digital revolution held great promise for economic growth, poverty eradication and development. It could improve the chances for poor countries to leapfrog some stages in the development process. Access to the Internet provided more than economic opportunities. Its major impact in poor countries would be in the area of social development. Information technology could facilitate distance learning at low cost. Telemedicine could provide access to up-to-date health and medical information throughout the world, which was the aim of the Health InterNetwork. Information technology could also help empower civil society, she said.

Bringing the benefits of the information technology revolution to the developing world was a formidable task, she continued. Connectivity, capacity and content were three key areas. There were no simple solutions to connectivity. With an appropriate regulatory environment, the private sector could provide efficient services in the major cities of the developing world, but for the countryside one could not rely on market forces alone. The near-term information technology goal for the rural poor in the developing world must be to connect communities, rather than individuals. By providing the resources needed to invest in digital infrastructure, the donor community could make a vital difference, she said.

Capacity was not just connecting computers to the Internet, she continued, but also the technological skills needed to use information technology facilities. There was no leapfrogging when it came to education. Traditional literacy remained a prerequisite for development. Technical assistance could make a difference in developing the human capital needed to capitalize on the information technology revolution. The Secretary-General had, therefore, announced the creation of a United Nations information technology volunteer corps -– UNITeS -- that would train groups in developing countries in how to use and apply information technology. She appealed for a positive response to that initiative.

Content must be relevant to local needs, she said. Eighty per cent of the material currently on the Internet was in English, a language that 75 per cent of the world’s people did not speak. The creation of both local content and automatic translation technologies must be encouraged.

Bridging the digital divide would require global leadership and a major commitment of resources, she added. Only the developed nations had the influence, resources and expertise necessary to play that role, but if it was to succeed, the process must engage all stakeholders -- donors, the private sector, civil society organizations and governments, not least those in the developing world, she said.

The international community as a whole must come up with concerted strategies, she said. With its universal membership and its ability to act as a global interlocutor, the United Nations was uniquely placed to help forge the coalitions that were needed. The Secretary-General had proposed to set up a task force of experts who would provide practical advice on the role of information technology in development. Innovative approaches to resource mobilization were also needed. To that end, establishing a digital bridge fund might be considered. ”With strong partnerships, appropriate resources and political will, the digital divide can and will be bridged”, she said.

Keynote Address

RICHARD HOLBROOKE (United States), introducing LAWRENCE H. SUMMERS, Treasury Secretary of the United States, said that it was the first time in United Nations history that the Treasury Secretary had come to the United Nations. As his country’s President would visit the building the same day, that dual appearance signalled the United States’ continuing commitment to the United Nations.

LAWRENCE H. SUMMERS, Treasury Secretary of the United States, said there was no greater challenge facing humanity than the challenge of global development. There would be no effective development without everyone doing their part. Without strong policies in developing countries and the right approaches from the industrial world, there would be no progress. A new global consensus was needed.

The need for that consensus was suggested by the importance of the development challenge and also by the challenge represented by new technology, not only information technology, but also progress in the biological sciences, which could make a difference in fighting diseases. The elements of such consensus were becoming increasingly commonplace in discussions here. What was central was, however, its effective implementation.

He said the new global consensus could be defined in 10 elements, five of which were related to what countries did and five to the actions of the international community.

First, market-oriented policies were important, he said. It was no accident that Soviet-style communism, planning ministries in the developing world and large corporations run by command all ran into a brick wall in the same decade and had to be restructured. In an increasingly competitive world, countries whose policies did not have the support of their own citizens had little prospect for success in the world. Those policies relied on free markets.

A second element learned was the need for effective institutions and the rule of law, he continued. Whether it was the transparency of a nation’s budget or the independence of its judges, the integrity of its public servants or the health of its civil society -– strong institutions, good governance and a functioning rule of law could make all the difference on whether a country moved forward in a global economy, or ever further behind. As Amartya Sen had pointed out, no democratic nation had ever had a major famine.

Integration with the rest of the world was important as well, he said. Growth was central to development, and integration was central to growth. No country had achieved rapid economic growth without rapid growth in manufacturing exports. Multilateral trade liberalization through the General Agreement on Tariffs and Trade had brought enormous global benefits.

The greatest global barrier to the spread of information technology was the inability to read, he said. There was no higher return on investment for a developing country than an investment in the education of young girls. The result was not just more productive workers, but smaller and healthier families.

Investing in basic health was also crucial, he continued. Life expectancy in southern Africa was expected to drop to less than 45 years. In some countries, more than one in four adults might be HIV positive. Ninety per cent of the illness and death that HIV would bring to Africa was still to come, according to estimates. The world’s response had been inadequate.

A rule-based global economic system was essential to success, he said. President Clinton had said that “a legal framework of mutual responsibility and social safety is not destructive to the market; it is essential to its success”. In that sense, the actions of the Financial Action Task Force and other groups to name and shame jurisdictions that encouraged the dark side of capital mobility -- money laundering, tax evasion and so forth -– were examples of something one should see more of in the future.

At a time when the cost of a large American mall exceeds the private capital flow to many developing countries, a strong and stable flow of capital from the industrial world to the developing world would be essential to a successfully integrated global economy, he continued. Capital flows needed to be deepened and better utilized to ensure their stability. That was the central objective of the international community’s approach to the ongoing reform of the international financial architecture, which had emphasized transparency, the improvement of domestic financial infrastructures and the monitoring and reduction of financial vulnerabilities that were associated with leveraged national balance sheets.

The reality that not all loans would be repaid was central to any properly functioning financial system, he said. Beyond good financial practice, writing off bad loans was a moral imperative. The power of compound interest should not ever be the power to stop children from going to school or from getting necessary health care. His country was committed to ensuring that unsustainable debt burdens did not stop poor countries from realizing their economic potential.

He said that there would be no Internet, no sequenced human genome and no eradication of any major disease without strong public sector action. Global public goods needed a much more prominent place on the development agenda than they had had to date. If the potential of modern science was to be realized, there was no alternative to global public institutions and actions of a kind very different from the standard country-by-country programmes, he said.

There was no substitute for more and more effective official external assistance. The development challenge was not simply providing more resources. All too often, natural resource windfalls had flowed into palaces and corruption, producing little or no tangible benefit for a nation’s people. The lesson was that support needed to be targeted to countries and policies with a proven capacity to deliver results, and that conditions were appropriate when assistance was provided.

The global stake in successful economic development had never been greater, he said. There had never been greater technological opportunities to promote convergence than there were today. And for all the arguments that raged, there was probably more agreement on the right way forward, both nationally and internationally, than ever before. The question was whether internationally the will exists to do what could be done, he said.

The meeting was then suspended for the opening, by Mr. Wibisono and Ms. Frechette, of an information technology exhibit running concurrently with the high-level segment.

High-level Segment

The meeting resumed with the high-level segment, a policy dialogue and discussion on developments in the world economy and international economic cooperation with heads of multilateral financial and trade institutions of the United Nations system.

Opening the meeting, the Council President, Mr. WIBISONO (Indonesia) mentioned the dialogue the Council had held with the Bretton Wood institutions in April. The dialogue had indicated that the international economic environment was improving, yet the challenge of development and of eradicating poverty remained as pressing as ever. The various gaps separating rich and poor included an income gap, opportunity gap, a knowledge gap and a technological gap. All had to be bridged immediately if the benefits of growth were to reach all countries and people.

The great challenge in the period of unprecedented growth and prosperity was to help the over 2 billion living in poverty to get their share of development and growth, he said. The overarching task of the United Nations systems was to tap the benefits of globalization for all people of all countries. Information and communication technology could speed up and strengthen efforts to meet the challenge. Spreading the benefits of globalization to where they were needed required conducive national policies and international supports.

JAMES WOLFENSOHN, President of the World Bank, said it was important to recognize that ICT was not a magic bullet against poverty. The question was: to what extent did the Internet impact on poverty? The answer was to remember that poverty was not just a matter of money, but also of knowledge and opportunity. The World Bank was both a money and a knowledge institution in a world becoming increasingly based on a “knowledge economy”.

The so-called digital divide did exist and the question was what to do about it, he continued. New York had more Internet hosts than all of Africa. It seemed that poor people had to choose between getting bread or getting computers. In fact, people wanted both. The central issue for the current meeting of the Council was to determine how technology could be harnessed to combat poverty.

There was no past paradigm for using information technology to combat poverty, he said. In fact, development paradigms of the past were opposite the cooperation that information technology required. Bilateral organizations often did not want to work with multilateral ones. For Internet technology to work, cooperation was essential. Reviewing a number of new organizations combining private and public sector involvement for introducing computers to people around the world, he mentioned the World Bank’s InfoDev, a venture fund bringing public and private donors together for ICT development. He said the evolution of the Internet in developing countries could not be predicted. The opportunities, however, had to be extended so that knowledge would increase.

It was vital to make Internet access available to all people, he said. Most importantly, to that end, existing technological knowledge needed to be pooled, so that the benefits of technology could reach everyone. A common information base was imperative, so people could be aware of what others were doing in every part of the world. A new World Bank initiative was a global development gateway, by which each country could have gateway access to information. Putting ICT at the centre of the development agenda would improve market functions worldwide, while enhancing the quality of life throughout the world. Leadership was needed so that the “digital revolution” finally gave equity to the poor people of the world, in a way that the industrial revolution had not.

MIKE MOORE, Director-General of the World Trade Organization (WTO), said information technology offered enormous hope to all citizens, while at the same time provoking a fear of being marginalized. The technological revolution had driven down prices in every area of economic endeavour. Information technology was an important part of globalization and was not threatening. It was an important tool for assisting distant and local cultures.

Institutional arrangements to ensure that developing countries were able to enjoy the benefits were necessary, he said. On the other hand, progress could be slowed down by regulations and taxes. Open economies and the import and export of ideas were extremely important.

The new technology could also change the nature of diplomacy, among other things, he said. As an example, he mentioned the fact that some member countries could not afford residency in Geneva. New technologies could offer an opportunity for those countries to participate better within the WTO organization.

E-commerce was just another way of doing business, he said, and covered by WTO agreements. The moratorium on electronic commerce was up for review. The absence of expensive regulations was the Internet’s big strength and it should be kept that way. The development of e-commerce should not be impeded. The WTO’s information technology agreement of 1997 had helped to promote e-commerce by liberalizing telecommunication services on which the Internet depended. Closing some of those telecommunication services was a threat to further development. Its liberalization was now being negotiated within the organization, and he hoped that a second information technology agreement could move forward soon. The key for the new economy was not to get in the way of the obvious. The WTO should offer the gift of opportunities, and the gift of the opportunity in trade was there for everyone.

EDUARDO ANINAT, Deputy Managing Director, International Monetary Fund (IMF), said the theme of the high-level segment -- in shorthand, bridging the digital divide -- raised the critical issue of connectivity. Some were connected to the Internet and the latest high-tech communications, while others were not. Not surprisingly, the disconnected happened to be the world's poor -- those who did not share the benefits of global growth, because they lacked access to social services, essential infrastructure and income and employment opportunities -- let alone access to the Web. Being disconnected carried an even higher cost; isolation and marginalization at a time when there was already a growing gap between the rich and poor nations.

He said even though the global economy had recovered remarkably quickly from the financial crises of 1997-1998, there was no room for complacency. In that respect, three key concerns came to mind. Was enough being done to ensure a gradual balancing of global growth among the principal currency areas -- the United States, Japan and Europe? Were the values of the key currencies in line with their medium-term fundamentals, notably the euro against the dollar? Was enough being done to ensure that any needed adjustments in financial markets occurred in as orderly a manner as possible? It was, therefore, more urgent than ever that a smooth transition to a more balanced pattern of global growth be secured, he added.

In the United States, he continued, that meant containing excess demand pressures and being careful not to unduly loosen the fiscal stance. In Japan and Europe, it meant tackling structural rigidities, including intelligent deregulation of key sectors. In Latin America, it meant continuing to reduce fiscal deficits to build investor confidence and containing the risks associated with high external financing requirements. In Asia, it meant persevering with bank and corporate restructuring. And, in Africa, it meant stepping up economic and institutional reforms to broaden the economic base and create a welcoming atmosphere for the private sector.

The question to be asked was what could the United Nations family, particular the IMF, do to create a fair global environment? Policy makers in developed and developing countries should now tackle the critical structural adjustments that had in too many cases been delayed. In support of that, the Fund should strengthen its focus on core activities -- macroeconomic stability; monetary, fiscal and exchange rate policies; and financial sector issues -- while stepping up its work with its development partners in other areas, such as the social realm. In the past year the Fund, working closely with the international community, had continued to explore ways to better prevent crises and better manage those that did inevitably occur. Ways had also been explored to make the institution more focused and more effective, with serious consideration being given to the many reform recommendations by governments.

What did the push for a safer global economic environment mean for the world's poor? he asked. It meant that the international community was trying to ensure that the benefits of globalization were shared by all. It meant that the IMF, working closely with the World Bank and the United Nations and other partners, would continue to place a high priority on poverty reduction. The best hope now lay with a new approach to that issue endorsed by the international community last September The main innovation was deriving programmes from comprehensive strategies for poverty reduction drawn up by individual governments, with the involvement of a broad range of stakeholders. The IMF was doing its part by supporting economic policies that provided an environment conducive for sustainable, inclusive growth. Its key instrument was its new concessional lending facility -- the Poverty Reduction and Growth Facility.

He said that the international community must tackle head on the more intractable areas of reform that are turning out to be so critical in a era of globalized markets -- and globalization is here to stay. Ultimately, the goal is higher living standards, the elimination of poverty and shared global prosperity. To accomplish that, all nations must be fully connected to the global economy -- “We have not a moment to waste”, he said.

RUBENS RICUPERO, Secretary-General, United Nations Conference on Trade and Development (UNCTAD), said the information revolution could go right or wrong, depending on the way the process of change was steered. It was not the mechanical innovations that posed the difficulty, but the change of attitude that the advent of those new technologies required. Traditional ways of doing business must be modified, and appropriate policies at the international and domestic level must be adopted to take full advantage of technological progress.

The basic question for UNCTAD was whether the global environment was in a sufficiently balanced and healthy state to support a pattern of information technology-led growth that would bring significant benefits to poorer countries, he said.

Information technology had triggered a surge of cross-border mergers and acquisitions in new technology sectors, but most firms from developing countries were excluded from playing the merger and acquisition game, except as victims, he said. There were worrisome developments arising from the technological disruption. New, knowledge-centred activities tended to use fewer natural resources, thus compounding already unfavourable trends in commodity prices. Overprotection of intellectual property rights was another matter of concern.

For developing countries, he continued, the emergence of a global knowledge- based economy should be good news. As the ratio between power and price of information equipment continued to rise, and as the cost of transferring information across borders kept diminishing, opportunities to catch up became unprecedented. The portability, flexibility and affordability of such technologies allowed smaller players to become competitors worldwide, he said.

Responding effectively to those challenges would require strengthening the resource base through education, research and development and training, he said. Favourable treatment would prove indispensable for both users and potential producers of new technologies in developing countries. Investment remained the key to growth in the digital age. Because investing in phone lines, satellites or computers involved the new technology through capital goods and licensing arrangements, technological catching up required increased foreign exchange earnings to pay for the needed imports, he said.

Policy makers in the industrial countries must take seriously the global imbalances and asymmetries that were damaging the economic prospects of developing countries, he said. New technologies were not a fast track to economic prosperity for all, but were an integral part of a global structure that remained heavily biased against the poor and underprivileged. Regional cooperation could be one way for developing countries to challenge those biases by establishing the larger markets needed to support their technological efforts.

JOSE ANTONIO OCAMPO, Executive Secretary, United Nations Economic Commission for Latin America and the Caribbean (ECLAC) (on behalf of the ECE, ECA, ESCAP and ESCWA) said the world economy had been strengthening over the past two years. Information and communication technology could help bring balance to the regionally varying rate of economic growth and help achieve the goal of reducing world poverty by half by the year 2015.

Government intervention could facilitate the bridging of the present digital divide in a number of areas, he said. Policies could increase opportunities for education and governments could create conditions conducive to equitable access. Governments could also institute measures that would extend ICT benefits to social services. They could generate incentives for development in numerous ways, such as through providing seed capital. A world class telecommunication service for

every country was a prerequisite for overcoming the divide, as were strong legal infrastructures to protect ICT. Those were all areas in which the international community could lend support to the developing world.

MARK MALLOCH BROWN, Administrator, United Nations Development Programme (UNDP), said the steady spread of new technology and new markets over the past few years had generated unprecedented wealth in some corners of the world. Some of those dramatic changes had also carried heavy social costs, which helped explain the legitimacy crisis about globalization.

He said one critically important mission of UNDP was trying to provide an alternative voice in the debate on globalization, in order to explore how it could be managed in a way that ensured the rewards were spread more equitably. One key area where that could be done was through the smart use and application of information technology. In that regard, UNDP planned to set up a trust fund to support and monitor "e-readiness" at a country level. Comprehensive country assessments would be carried out of existing connectivity, policy frameworks and skill levels. Then, policy support on reform and deregulation that accelerated equitable infrastructure development would be provided.

That could not be done in isolation, he said. Appropriate policy responses in other key areas, from trade to budgets, must also be strengthened. That must be done in partnership with sister agencies in the United Nations system, the Bretton Woods institutions and WTO, he said.

It must be stressed that providing real evidence of the potential benefits of globalization required real commitment from developed countries, not just in terms of reversing the downward trend in official development assistance, but also by opening their own markets fully in areas where developing countries had real comparative advantages, providing comprehensive debt relief, and matching goodwill with real expertise and resources in critical areas like information technology, he said.

* *** *