ECONOMIC AND SOCIAL COUNCIL HOLDS DIALOGUE ON GLOBALIZATION WITH EXECUTIVE SECRETARIES OF UN REGIONAL COMMISSIONS

ECONOMIC AND SOCIAL COUNCIL HOLDS DIALOGUE ON GLOBALIZATION

WITH EXECUTIVE SECRETARIES OF UN REGIONAL COMMISSIONS

GENEVA, 20 July (UN Information Service) -- The Economic and Social Council this morning began consideration of regional cooperation efforts, holding a panel discussion on globalization with the Executive Secretaries of the five United Nations regional commissions who contended that the opportunities presented by expanding global markets came with risks and costs, including growing inequality and lowered Government control over domestic vulnerability to worldwide economic fluctuations.

In opening remarks, Danuta Huebner, Executive Secretary of the Economic Commission for Europe (ECE), said that in the European continent, integration and international cooperation were guarantors of peace and stability.  The best response from the continent to global challenges was its European integration.  The international community had a specific role to play, and that was where the work of the ECE came in.  The regional character of this Commission was its main asset.

Kim Hak-Su, Executive Secretary of the Economic and Social Commission for Asia and the Pacific (ESCAP), told the meeting that the Asian economic crisis of the mid-1990s had amply demonstrated that participation in global markets was by no means a smooth or equitable process.

Jose Antonio Ocampo, Executive Secretary of the Economic Commission for Latin America and the Caribbean (ECLAC), noted some of the concerns about globalization in his region.  There seemed to be an ever-growing group of enterprises and workers left in a technological gap, job generation was limited, under-employment had grown significantly, and overall growth was slow -- 3.3 per cent in the 1990s, compared with an average of 5.5 per cent from 1945 to 1980. 

K. Y. Amoako, Executive Secretary of the Economic Commission for Africa (ECA), said that along with providing opportunities, globalization had fuelled certain anxieties:  concerns were felt about growing inequality; volatile short-term capital flows threatened financial crisis and instability; workers felt threatened by low-wage competition and new technology; Governments seemed less able to offer social protection; and competitive pressures could create the temptation to lower labour and environmental standards.

Mervat Tallawy, Executive Secretary of the Economic and Social Commission for Western Asia (ESCWA), said problems of peace and stability affected the region and had discouraged foreign direct investment.  Only 1 per cent of world foreign

direct investment (FDI) came to the region and all of it involved the oil business.  Such difficulties also had distorted the allocation of resources in the Arab countries.  Nonetheless, she said, many countries were privatizing and carrying out infrastructure reforms.

Among questions asked from the floor were how the regional commissions themselves were responding to the issues raised by globalization, and whether those commissions representing more economically healthy regions of the world intended to focus on the contributions they might make to African development efforts.

Statements by Panellists

DANUTA HUEBNER, Executive Secretary of the Economic Commission for Europe (ECE), said that when one thought about Europe today, one immediately thought of diversity.  In countries with economies in transition, the strengthening of democracy was accompanied by a strengthening of their capacities.  In the European continent, European integration and international cooperation were guarantors of peace and stability.  The best response from the continent to global challenges was its European integration.  The international community had a specific role to play, and that was where the work of the ECE came in.  The regional character of this Commission was its main asset.

Mrs. Huebner said that in coming years, energy would be the principal issue on the programme of work for development policies in Europe.  The ECE was doing its best so that the countries in transition had the necessary infrastructure which would allow them to save as much energy as possible.

KIM HAK-SU, Executive Secretary of the Economic and Social Commission for Asia and the Pacific (ESCAP), said the more industrialized East Asian economies had almost fully integrated into the world economy and had benefited enormously from globalization.  The countries of South-East Asia had had a more mixed outcome.  South Asian countries were relative newcomers to globalization and were not so far advanced in the process as was south-east Asia.  The least-developed nations, Pacific island countries and economies in transition of the region remained largely marginalized.

There had been substantial increases in intra regional trade flows, Mr. Hak-Su said.  These had grown as a percentage of total ESCAP trade from about 25 per cent in 1980 to about 45 per cent in 2000.  Transnational corporations of developed countries remained the major source of foreign direct investment.  Within the region there were significant transfers of technology and modernization of economies.  Globalization had widened the opportunities for national development but also had brought risks, and the Asian crisis had amply demonstrated that participation in global markets was by no means a smooth or equitable process.  Currently the economic downturn in the United States and Japan was a concern.

He said ESCAP helped to identify and consider various trade and investment policy options and strategies relating to the integration of developing countries of the region into international and regional trading systems.  It also promoted a thorough understanding of the issues involved among senior policy makers of the region.  In the context of regional trading arrangements, the Bangkok Agreement remained the first and only ESCAP region-wide trade agreement, and it recently had been acceded to by China.  There also was a fairly recent Bangladesh-India-Myanmar-Sri Lanka-Thailand Economic Cooperation pact.  Among its other work, ESCAP helped implement investment projects and provincial and regional levels with particular attention to attitudinal and procedural changes.

JOSE ANTONIO OCAMPO, Executive Secretary of the Economic Commission for Latin America and the Caribbean (ECLAC), said in recent years there had been intense debate about the benefits the new international order could bring to developing countries.  The Asian crisis had dealt what was probably the most severe blow to expectations, as it was clearly demonstrated that globalization in the financial sphere, which was where it was most advanced, could be a source of profound macroeconomic instability unless an appropriate institutional framework was in place.  The strong reaction of "global civil society" since Seattle revealed how much dissatisfaction there was with globalization in the industrialized world.  There was increasing disenchantment with the process in developing countries as well, although the political manifestations of this were less organized, and the agenda had yet to be defined.

During the 1990s, the region had enjoyed its best decade for export growth, exceeding all previous rates in the history of the region.  There had also been an increase in foreign enterprises and foreign direct investment.  But at the same time, there were structures that were less sophisticated than they were at previous stages of development.  There was an ever-growing group of enterprises and workers in a technological gap.  Job generation was limited, and under-employment had grown significantly.  Overall growth was slow. 

There was a need for an international agenda which paid attention to correcting the asymmetries of the world's economies.  There was a need for regional and subregional players on the global stage.  The smallest countries also needed alternatives to international financial assistance.  They needed help from regional and subregional financial operations. 

K. Y. AMOAKO, Executive Secretary of the Economic Commission for Africa (ECA), said African countries had not benefited from these gains of globalization and had been marginalized from the process.  In addition to concerns about growing inequality, globalization had fuelled other anxieties.  Volatile short-term capital flows threatened financial crisis and instability.  Workers felt threatened by low-wage competition and new technology.  Governments seemed less able to offer social protection.  And competitive pressures could create the temptation to lower labour and environmental standards.  Those countries that had not benefited from globalization tended not to have the structural and policy foundations in place to take advantage of more open trade, investment and financial flows.

The key for African countries, he said, was to design strategies and policies to maximize the benefits of globalization while avoiding or minimizing the disruptive consequences to their societies and economies.  African Governments had to deepen and enhance reforms in the financial sector to mobilize savings, attract foreign capital and increase the efficiency of financial intermediation.  There was a need to promote coordinated trade and industrial development.  To ensure the success of Africa's integration into the global economy, countries there needed to intensify efforts at mainstreaming regionalism into the development process.  By moving ahead with the creation of an "African Union", the continent was taking a historic step to that end.

Mr. Amoako said future rounds of negotiations on international trade needed to go beyond liberalization to address the broad development needs of Africa.  Official development assistance (ODA) needed to follow such principles as African ownership of visions and goals for development, provision of long-term and stable resource flows, and recognition of Africa's diversity.  The matter of debt relief needed to be further explored as a potential non-conventional source of financing public investment and poverty programmes, which also could improve business confidence for private-sector financial flows.

MERVAT TALLAWY, Executive Secretary of the Economic and Social Commission for Western Asia (ESCWA), said only 1 per cent of the world’s foreign direct investment came into the region.  All of this investment was only in the area of oil.  It had also affected the allocation of resources in the Arab countries. 

Many countries were privatizing and undergoing infrastructure reforms.  Seven countries had joined the World Trade Organization.  The annual growth of domestic product in the region was 4.7 per cent, due solely to the rise in oil prices.  There were indications that education and literacy had improved in the region.

During its last session in May of this year, the Commission adopted a number of important resolutions in the areas of water management, energy conservation and renewable sources of energy and the creation of a consultative committee on technology.  The Commission was preparing a series of publications and organizing a number of workshops in preparation for the fourth Ministerial meeting of the World Trade Organization in Doha, Qatar, in cooperation with the United Nations Conference on Trade and Development, the Arab League and the Union of Arab Banks.  In view of the social, economic and political changes occurring worldwide, the regional perspective was becoming all the more important. 

Discussion

Among questions put to the panellists by national delegations participating in the debate were how the regional commissions were reacting to globalization; how they were modifying their roles to reflect globalization within their operations in the United Nations; how the regional commissions were relating "North-South" and regional economic questions; how the ECA was going to assist African countries to implement the United Nations Human Settlements (Habitat) Agenda and what the other regional commissions could do to aid Africa with its problem in finding sufficient resources for development.  There were also questions on how the regional commissions coordinated with each other and how they managed coordination within their own subregions; how "results-focused" United Nations reforms had filtered down to the regional commissions; whether the ECA had plans to help improve African road transport, including through trans-Sahara roads; whether regional trade arrangements, if overemphasized, could exclude developing countries from arrangements involving more prosperous regions of the world, and whether if there were any specifics yet to an ECLAC intention to promote "public goods" and better governance in the region.

Responding to the debate, Ms. Huebner, ECE Executive Secretary, said the regional commissions did need to think about the world as a whole and how to respond to worldwide challenges.  Each region was unique in terms of strengths and weaknesses and in terms of how it could respond to global forces.  That the regional frameworks should be seen as a way of helping nations to respond to the

negative forces of globalization but also, and just as important, to respond to globalization's positive effects and to the opportunities it presented.

Mr. Hak-Su, Executive Secretary of ESCAP, said ESCAP was a large regional commission and paid a great deal of attention to subregions.  The Commission was studying the results-oriented approach adopted by United Nations Headquarters and was intending to apply it regionally.

The ECLAC Executive Secretary, Mr. Ocampo, said was concerned about the vulnerability of small States to the forces of globalization.  The region had a significant number of small countries and the archipelagic character of many of them raised special concerns relating to infrastructure, transportation, and vulnerability to natural disasters.  Negotiations were ongoing with regard to the integration of other economic groupings in the region.  Such negotiations had to go beyond mere trade in goods and services to cover greater issues of cooperation such as those carried out by the European Union.

Mr. Amoako, ECA Executive Secretary, said the ECA collaborated with all United Nations agencies, but always respected the mandates involved.  Discussions had been held with Habitat about joint activities and were expected to continue and to lead to specific results.

On the question of foreign investments, he said they went disproportionately to a few African countries and tended to focus on resource extraction, mainly oil and diamonds.  The private sector ultimately would be the economic salvation of Africa, but it was clear that a great deal had to be done to set the conditions that would attract private sector financial flows.  A number of these conditions could only be dealt with regionally.  The ECA took transportation matters seriously and a meeting of African transportation ministers was scheduled for next year to discuss, among other things, the low rate of implementation of previous transportation agendas.  The World Bank, the European Commission and other partners were helping with a sub-Saharan transport programme.

The ESCWA Executive Secretary, Ms. Tallawy, said the regional commissions were perhaps doing more than was generally known, related to globalization and other matters.  There could and should expand their efforts.  Perhaps in future the regional commissions could provide the Economic and Social Council with statistics and related information on success stories from their regions.  Locating additional resources, including extra-budgetary resources, was a good idea and could lead to the regional commissions doing more than they could with their existing resources.  The ESCWA cooperated with the Arab League and other groups of countries within the region, in formulating policies or helping in such matters as negotiations for joining the World Trade Organization.

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