Fifty-sixth General Assembly

Second Committee

7^th Meeting (AM)

CONCERN VOICED IN SECOND COMMITTEE OVER WIDENING

GLOBAL ECONOMIC DISPARITIES

Never before was the world so collectively rich, so politically democratic, so economically globalized and yet so widely divided between the rich and the poor, Nepal's representative told the Second Committee this morning as it continued its general debate.

Despite unprecedented wealth on the planet, he continued, half of the world was living on less than two dollars a day and one-fifth on less than one dollar a day, with adverse consequences for peace and development.  It was morally diminishing for all that some 66 countries were now poorer than they were a decade ago, despite the execution of United Nations-sponsored programmes.

That view was echoed by India’s representative, who said that despite increasing prosperity in some parts of the world and cheaper and quicker communications, the world continued to exist at two separate levels -- of riches and of squalor.  Globalization had generated anxieties among weaker participants in the global economic system, many of whom felt their priorities sidelined and vulnerabilities exacerbated.  The international community must work to promote confidence that the world economic system was being fashioned for the benefit of all nations and taking into account the needs of developing countries.  Globalization, he said, was a tide which must lift all boats.

The representative of the United Arab Emirates agreed that despite the relative improvement in some areas of the world thanks to globalization, economic liberalization and rapid technology transfer, the results of such progress had not reached the countries of the Third World.  In fact, those countries had seen a fall in growth rates as well as an increase in poverty, unemployment and capital flight.  That was the bitter reality imposed by the policies of some developed countries.  It was incumbent on the international community to create a global strategy to enable developing countries to benefit from the fruits of globalization.

If the new century was to be one of development and prosperity for all, stated the representative of the Democratic People's Republic of Korea, nations must promote equal access to the successful results achieved in the field of science and technology.  To achieve that, however, it was necessary to reorganize

current international economic relations.  As long as such unfair international economic relations -- which one-sidedly supported only the development of a handful of countries -- remained intact, the world could not escape instability.  In such a world, developed countries would suffer as well.

Statements were also made this morning by the representatives of Tunisia, Yugoslavia, Mexico, Burkina Faso, Jordan, Venezuela, Yemen, Israel, Iraq, Republic of Moldova, Kuwait and Sudan.  In addition, the representative of the Republic of Korea spoke on a point of order.

The Committee will meet again at 3 p.m. today to conclude its general debate and begin its consideration of science and technology for development.

Background

The Second Committee (Economic and Financial) met this morning to continue its general debate.

Statements

MOHAMED FADHEL AYARI (Tunisia) said that on the eve of important events, such as the Fourth World Trade Organization (WTO) Ministerial Meeting, the International Conference on Financing for Development and the World Summit on Sustainable Development, the Committee's discussions were particularly important, since they allowed for an assessment of the implementation of commitments already undertaken.  To achieve the objectives set out by the international community, several measures could be taken, including debt relief, increasing access to markets for developing countries and reversing the decline in official development assistance (ODA).  He was pleased that the link between financing, trade and development would be at the heart of next year’s Financing for Development Conference in Monterrey.

The universalization of the global economic system provided for greater integration but also brought with it challenges of new types, such as rising unemployment, he said.  The proposed world solidarity fund was based on the belief in solidarity through mutual assistance, and would include mechanisms financed by voluntary contributions.  In light of the recommendation to establish that fund, contained in the report of the Secretary-General, he invited all Member States and international institutions to contribute to the implementation of that project. 

He said that the second high-level dialogue on development partnership, held on 20 and 21 September, had emphasized the role of information and communications technology (ICT) in promoting economic and social development.  However, he noted, developing countries had not been able to benefit from such technology.  The persistent digital divide made it necessary to have a dialogue on the issue and to adopt measures to close that gap.  In that connection, he highlighted the World Summit on the subject, to be held in 2003 in Geneva and in 2005 in Tunisia in collaboration with the International Telecommunications Union (ITU).  Tunisia would submit a draft resolution to the Assembly whereby the Assembly would endorse the ITU's session establishing the preparatory process for that summit. 

DEJAN SAHOVIC (Yugoslavia) said that as economic integration increased so did the role of international institutions.  Their effectiveness was fundamental to a strong and stable global financial and economic system.  More emphasis should be placed on enhancing consistency, coherence and complementarities among different international bodies dealing with financial, trade and development issues.  In that regard, the March 2002 conference on Financing for Development could render a significant contribution towards that goal.

Debt relief, he said, was an integral part of a comprehensive concept of poverty reduction.  It should be considered as vital for creating the environment essential for integration into the world economy.  Debt relief initiatives, especially a fully implemented enhanced Heavily Indebted Poor Countries (HIPC) Initiative, should be complemented by other resources so as to help the beneficiaries accelerate the pace of feasible growth and reduce poverty.  Some highly indebted low and middle-income developing countries were facing serious difficulties in meeting their external debt-servicing obligations.

In order not to divert resources from financing for development, debt relief should be complemented by increased ODA, he added.  Foreign direct investment (FDI) and private flows still remained  indispensable elements for economic development.  In that regard, efforts must be intensified so as to reverse the declining trend in ODA worldwide and achieve the ODA target of 0.7 per cent of gross domestic product (GDP) for all donor countries.

JOSÉ RAMÓN LORENZO (Mexico) said the task before the United Nations -- achieving global development -- was enormous.  However, nations were not starting from nothing.  In recent years, nations had begun to build the structures needed to create sustainable economies.  In the next few months the international community would be able to give further momentum to those efforts at conferences in Mexico and in South Africa.

One of the features of the new global economy had been polarization between the rich and the dispossessed, he said.  Poverty led to problems not only in developing countries but in developed ones as well.  Poverty led to anarchy, migration and terrorism, which spilled over national borders.  The International Conference on Financing for Development was an occasion to examine a number of issues relating to global finance -– it should take an holistic approach and should lay down a path to be followed by nations in the future.  It should also lay out the scope and consequences of globalization.

He said that environmental deterioration contributed to extreme poverty around the world.  In that regard, stable handling of natural resources was crucial to sustainable development.  Extreme poverty and environmental deterioration impacted all countries.  Cooperation within the United Nations system was therefore needed to create a global environment for sustainable development.

KAMALESH SHARMA (India) said that in spite of increasing prosperity in parts of the world and cheaper and quicker communication, the world continued to exist at two separate levels -- of riches and of squalor.  Today, 75 per cent of the global population lived on less than 25 per cent of the global income.  Clearly, globalization was acquiring different meanings in different parts of the world.  It had generated anxieties among weaker participants in the global economic system, many of whom felt their priorities sidelined and vulnerabilities exacerbated.  The persistence of two worlds within one was the greatest possible moral hazard.

The challenge, he continued, was to make globalization a positive force for all.  Confidence must be generated that the world economic system was being fashioned for the benefit of all countries on democratic principles, and taking into account the needs of developing countries.  "Globalization is a tide which must lift all boats."  A world based on absence of equity in its transactions could only have a bleak future.  Trade, capital flows, development assistance, investment, global financial management and science and technology must all be harnessed to a collective positive sum project in which all global partners were beneficiaries.

Before the world economy could fully recover from the international financial crisis of 1997-1998, it was faced with another global slowdown, the first signs of which appeared towards the end of 2000, he said.  The current slowdown started with an almost synchronized downturn in economic activity in the major developed economies.  It was being transmitted to the developing countries in several ways, including reduced demand for exports, weakening commodity prices, stagnant capital flows and tighter credit conditions.  The World Bank projected that GDP growth for the developing countries was expected to slow from

5.5 per cent in 2000 to 2.9 per cent in 2001 -- far short of the growth rate required for any meaningful impact on efforts to eradicate poverty.

SIN SON HO (Democratic People’s Republic of Korea) said that economic development was ensured by science and technology, and sustainable development was unthinkable without them.  The gap between the developed and the developing countries was precisely the difference in the levels of science and technology. The development of technology had so far been achieved mainly by developed countries.  Meanwhile, developing countries had not been able to implement a programme for science and technology due to various factors, although they had mapped out their own methods suited to their actual conditions.

He said that if nations were to make the new century a century of development and prosperity for all, they must promote equal use of the successful results achieved in the field of science and technology.  To achieve that, however, it was necessary to reorganize current international economic relations. Artificial obstacles, such as the monopoly of science and technology by some developed countries, hindered the sustainable development of developing nations. Such obstacles also blocked their equal participation in the management and operation of the international economy.

       As long as such unfair international economic relations -- which one-sidedly supported only the development of a handful of countries -- remained intact, the world could not escape instability, he said.  In such a world, developed countries would suffer as well.  The developed countries must discard their selfish positions and work towards enhanced technology transfer.  Those countries should also play a key role in helping developing countries in their national development programmes.

MURARI RAJ SHARMA (Nepal) said that never before was the world so collectively rich, so politically democratic, so economically globalized and yet so widely divided between the rich and the poor.  Despite unprecedented wealth on the planet, half of the world was living on less than two dollars a day and one-fifth on less than one dollar a day, with adverse consequences for peace, development and harmony.  It was morally diminishing for all that some 66 countries were now poorer than they were a decade ago.  Though poverty was pervasive across the developing world, the least developed countries (LDCs) were the worst affected, despite the execution of United Nations-sponsored programmes.  Globalization had further marginalized them.  To reverse that, it was necessary to expedite economic growth and execute specific pro-poor programmes.

Nepal, he said, was one of the least developed and landlocked countries trying to strengthen democratic institutions and values, reduce poverty and implement reforms in the economic, education and other key sectors.  It was engaged in planned economic development and had, over the last decade, registered a steady annual growth of five per cent.  To boost development, it had deregulated, privatized and liberalized the economy, offered an attractive incentive package to the domestic private sector and foreign investors, and decentralized governance.

Despite the Government's commitment and best efforts, growth was still modest, he noted.  Trade was slow in picking up due to supply-side constraints, the domestic private sector was still small and FDI still paltry.  The best hope for overcoming its problems and ensuring speedy development lay in a favourable external climate, increased ODA, better access to markets and technology in the developed world and enhanced South-South cooperation, including regional cooperation.

MICHEL KAFANDO (Burkina Faso) said the globalization of the international economy and the liberalization of trade had aggravated economic disparities among peoples.  There was a need to integrate the social and human dimensions of development in the new globalized economy.  One response to globalization was financing for development, which was absolutely necessary for developing countries, and particularly in Africa.  The upcoming economic conferences should address that and many other issues.  There was also a need to remain committed to the goals of Agenda 21.

On operational activities, he expressed concern over the constant shrinking of resources for basic funds and programmes in the development field.  In that respect, he saluted the measures taken by the Secretary-General to include all stakeholders in decision making and discussions on development.  It was important that the world took into account the development of the LDCs, 34 of which were located in the African continent.

For that reason, he said, Africa faced a critical situation.  The debate on Africa no longer had any place for rhetoric.  It should lead to concrete measures for development and debt relief.  In that regard, the adoption of the New African Initiative should be taken into account in all international development efforts. It was also important to fulfill the goals of the Millennium Declaration, which focused on combating extreme poverty and building a world of justice, peace and security.

WALID A. AL-HADID (Jordan) said that next year’s International Conference on Financing for Development, to be held in Mexico, was particularly important because it was the first of its kind and because of the vital issues to be discussed.  It would also represent the resumption of North-South dialogue, crucial in facing the common challenges brought on by globalization.  In addition, it would be an opportunity to discuss the global economic system as well as reform of the international financial architecture.  Moreover, it was particularly significant due to the numerous and diversified participants that were expected, including the World Bank, the International Monetary Fund and the private sector. He hoped the Conference would lay down practical and specific steps so as to mobilize the necessary resources to finance development.

He said that the World Summit on Sustainable Development, to be held in South Africa next year, would constitute a real turning point in the full implementation of the objectives of Agenda 21.  It would also be an opportunity to review progress achieved thus far and to identify the obstacles hindering implementation.  He hoped that the Summit would discuss ways to manage globalization and the distribution of its benefits to developing countries in a broader and fairer way.

The problem of indebtedness, he said, was still the main obstacle to achieving development in developing countries, since it depleted precious resources needed to finance development projects.  He particularly highlighted the indebtedness of middle-income countries, such as his own.  The international community must adopt measures and policies to tackle that problem, including ensuring the specified flow of ODA.  It must also open the markets of developed countries for products from the developing countries and improve the terms of trade, which were strongly tilted towards the products of the developed countries.  He looked forward to the WTO Ministerial Meeting in Doha, and hoped that development would be the backbone of that gathering and its conclusions.

MILOS ALCALAY (Venezuela) said the United Nations had a mandate to promote higher living standards and to solve international economic problems.  Today the United Nations should respond to the actual needs, problems and challenges of the world.  Those included hunger, HIV/AIDS and environmental degradation.  There was a need to achieve primary education for all to combat such problems.  Nations must look for sustainable economic growth and social justice by working towards a stable financial system, the elimination of commercial protectionism and the opening of markets to developing countries.

In that regard, today’s levels of cooperation were not sufficient to combat problems such as poverty, he added.  One example of that was ODA, which had been decreasing steadily in recent years.  More than ever, there was a need to find other sources of development financing.  In order to face all those challenges, there must be enhanced dialogue and communication with global financial institutions.

The United Nations should seek not only to fulfill its mandate, but to meet the needs of the global community, he said.  His country assigned great importance to the Conference on International Financing for Development in 2002.  It should promote the cause of all countries of the world, including developing countries. It should lay down a new international financial architecture, concentrated more on the social and economic development of countries most in need.  The Conference should also focus on a definitive solution to the problems of external debt, which hindered the development of many nations around the world.

AHMED AL-HADDAD (Yemen) said that the slowing of economic activity since early 2000 had already been mentioned earlier in the week by the Under-Secretary-General for Economic and Social Affairs.  The international community should focus on that slowing, which was already manifested in the fall in direct investment.  Due to the attacks of 11 September, the international economic context would suffer even more, since the United States economy influenced the global economic situation and because of the close links between economies.  The effects of the slowdown on developing countries could already be seen in the fall in commodity prices and difficulties in obtaining loans.  According to economic indicators, national incomes in developing countries would fall by 4.1 per cent by the end of the year.

It was only fair that wealth be shared, he said.  To deprive the majority of the world of the benefits of globalization would lead to widening the gap between the rich and the poor.  The international community's efforts should focus on adopting effective measures to help developing countries eradicate poverty. Moreover, those countries could not achieve economic growth without settling the external debt problem.  Policies should also be adopted to increase ODA flows, which were crucial to the efforts of developing countries.

Turning to the international trading system, he said that developing countries had introduced various reforms in order to participate in the international market.  However, those efforts would not yield any results if protectionist measures imposed by developed countries were not removed.  He hoped that the Monterrey Conference would eliminate a number of obstacles in the area of financing for development, and contribute to the efforts of developing countries to achieve their aspirations.

DANIEL MEGIDDO (Israel) said the issues confronting the Committee affected the well-being of the human race and the future of the planet.  Hunger, malnutrition, poverty and economic deprivation threatened the security of nations, regions and the global community.  In addition, some practices had already caused irreversible harm to the world environment.  The dilemmas were difficult, the solutions expensive and the time limited.  Fortunately, there was a consensus on the basic goals of international cooperation with regard to sustained development.  They included:  eliminating poverty, securing food supplies, eradicating diseases, finding global solutions to climatic change, desertification and deforestation, and providing aid to developing countries.

Underlying all those needs was the shared conviction that only sustainable development could provide a resource large enough to support future generations, he said.  Only through concentrated international effort could nations hope to reach millions of people who had not yet been included in the growing global prosperity.  His country was convinced that an integrated, people-centred approach could pave the way for real sustainable development.

Since its beginning, he said, Israel’s Centre for International Cooperation, known as MASHAV, had trained approximately 176,000 trainees from 140 countries in the developing world in courses in Israel and abroad.  It also developed dozens of projects in fields of Israeli expertise worldwide.  The MASHAV’s message to partner governments and international agencies was to introduce innovations, learn by using the “trial and error” process and stick to the bottom-up approach

ABDUL RAHMAN SAAD (Iraq) said globalization in the world today continued to widen the gap between the rich and the poor.  There was need for a real partnership to establish economic justice internationally and nationally.  Rich States should not use the economic global environment to exploit other nations. Nor should science and technology be used as a tool for global domination.  With the current economic slowdown, there might now be an ever-widening gap because of the drop in investment and development aid. In that regard, the two conferences next year would make it possible to devise solutions to help developing countries integrate into the global economic system.

His country had encouraged the private sector to increase investment in Iraq and improve development, he said.  Due to sanctions, however, Iraq’s GDP had decreased by two thirds since 1991.  Also, due to sanctions, agriculture was stagnating and industrial production had stopped.  The general sanctions had been in place for 11 years.  That was certainly a form of genocide and of collective punishment on an entire people -- and a flagrant violation of the United Nations Charter, which was dedicated to promoting human rights.  The Committee should study the economic and social effects of the sanctions and develop an appropriate resolution on that subject.

YASER KHAMIS SULAIMAN AL-SAGHEER (United Arab Emirates) said that despite the relative improvement in some areas of the world thanks to globalization, economic liberalization and rapid technology transfer, the results of such progress had not reached the countries of the third world.  In fact, the developing countries had seen a fall in growth rates and increased poverty, unemployment and environmental degradation, as well as capital flight and a constant fall in GDP levels.  That was the bitter reality imposed by the policies of some developed countries.  It was incumbent on the international community to create a global strategy to enable developing countries to benefit from the fruits of globalization.  He appealed to donor countries and developed countries to shoulder their responsibilities, especially vis-à-vis increasing ODA without conditions and barriers.

He invited the WTO, the United Nations Conference on Trade and Development (UNCTAD) and other financial institutions to play a more dynamic role in order to achieve sustainable development throughout the world.  His country believed in the principle of free trade to ensure complementarity among States, had adopted national measures to open up its markets and had decided to participate in the liberalization of trade arrangements.

He expressed concern over the economic and social crisis faced by the Palestinian people on a daily basis due to the continued Israeli occupation.  He invited the international community to exert greater pressure on Israel to terminate their dangerous practices and no longer exploit the natural resources of the occupied Palestinian territories, in accordance with the resolutions adopted at the international level and the peace accords concluded with the Palestinians.

ION BOTNARU (Republic of Moldova) said the reform of the global financial architecture was an urgent priority for the international community.  There was a need for financial investment, orderly debt workouts and full debt relief for poor countries.  Those actions could be focused within the framework of the WTO, UNCTAD and others.  Certainly that process required a collective effort on the part of all countries.  It was imperative that countries with economies in transition also benefited, along with the developing countries, from additional assistance, which should not replace foreign direct investment.  Enabling countries with economies in transition to integrate into the globalized world economy was in everyone’s interest.  Nobody would benefit from the marginalization of that particular group of States in the global economy.

He said the slowdown of the world economy appeared to be generating negative effects, such as marginalization of the developing countries, and, at the same time, tightening the investment climate both in the developed and developing countries.  Unfortunately, those effects of globalization had had a negative spillover into some States with economies in transition, including his own. Nevertheless, his country was committed to continuing active implementation of economic reforms to ensure economic growth and justice.

He said his Government had taken different measures to restore budgetary discipline, stimulate industry and exports, overhaul the social protection system, reduce expenditures and better manage foreign financial assistance.  It had also

developed a strategy to encourage production by restructuring enterprises, privatizing State property, increasing the effectiveness of the social programmes and improving the living standards of the population.  In addition, his country was actively involved in regional and international cooperation efforts, such as the Stability and Cooperation Pact of Southern and Eastern Europe.

TAREQ AL-BANAI (Kuwait) said the international community should focus its efforts on poverty eradication and commit to reducing by half the population of those whose income was less than $1 per day by 2015.  Eliminating hunger and restoring human rights must also be a priority.  All countries of the South should continue in their development efforts, and there must be a new spirit of coexistence among developing countries.  In that regard, providing development assistance was a duty for all those that could afford it.

He said that there was a need to translate globalization into real cooperation.  Nations should ensure the just distribution of the fruits of globalization.  Protection of the environment should remain an important part of sustainable development.  Leaders around the world should take action to preserve the environment for future generations.  In that regard, he supported the adoption of a resolution prohibiting the use of the environment in the context of war and military conflicts.

OMER BASHIR MOHAMED MANIS (Sudan) said the Committee’s debate was taking place during the first General Assembly of the new millennium, and therefore had special importance and responsibilities.  Last year the Millennium Declaration placed special stress on freeing the world from hunger, poverty and need.  There had been some fatigue on the part of donor countries in meeting those goals.  That required greater partnership and collective action between countries in the North and South.  The goals of development, such as reducing poverty by half by 2015 and ending the disparity between North and South, also required international cooperation.

He said there was also a need to examine the problem of external debt and find global solutions to the mobilization of public assistance for development.  Lifting obstacles to trade and ensuring access to the global market should also be addressed by the international community.  Management of globalization for the service of humanity would require an integrated review of trade, development and financial structures.  Those structures must be reformed in order to prevent the marginalization of developing countries.  The upcoming conferences in Doha and Monterrey could prove useful in finding solutions to all those concerns.

Point of Order

On a point of order, the representative of the Republic of Korea wanted to clarify something said in the statement by the Democratic People's Republic of Korea earlier in the morning.  The representative of the Democratic People's Republic had stated, "Today, the entire Korean people have turned out as one to carry into effect the idea of the Great Leader General Kim Jong Il for building a powerful nation."  He wanted to clarify that the phrase "entire Korean people" should be interpreted to mean the people of the Democratic People's Republic and asked that it be reflected in the report of the Committee.

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