Fifty-Ninth General Assembly

Second Committee

19^th & 20^th Meetings (AM & PM)

second committee hears call for developing countries to make

‘mixed blessing’ of globalization work to their advantage

In Earlier Session, Nobel Laureate Urges

More Attention to Millennium Declaration, Rather than Goals

Globalization could be a mixed blessing, fostering rapid growth while exacerbating inequalities in income and resources, and the greatest challenge for developing countries, therefore, was to make it work to their social, economic and environmental advantage, the Second Committee (Economic and Financial) heard this afternoon as it took up its agenda item on globalization and interdependence.

Introducing the Secretary-General’s report on globalization and interdependence, Sarbuland Khan, Director of the Division for Economic and Social Council Support and Coordination in the Department of Economic and Social Affairs, told the Committee that new technologies, markets and capital flows had created new opportunities but had also brought unexpected risks.  The net impact of globalization on the environment was mixed, leading in some cases to unsustainable patterns of production and consumption.  The international community must focus primarily on developing policy coherence that would lead to mutually supportive outcomes rather than contradictory results.

The representative of the Netherlands, speaking on behalf of the European Union, agreed, saying that globalization was an unstoppable process that would only succeed if based on global social standards.  The task at hand was to make good use of it so that economic interaction and technological progress adequately benefited the poor.  That required policy reform, institutional development and global cooperation.  Making the Millennium Development Goals a reality required progress in implementing the Monterrey Consensus, particularly as it concerned trade and debt relief, and helping developing countries to participate fully in international trade and channelling more funds into development.

Qatar’s delegate, speaking on behalf of the “Group of 77” developing countries and China, said the international community must create an enabling economic environment through concerted action on trade, debt relief and development assistance to facilitate greater integration of developing countries into the world economy.  It was also vitally important to increase developing-country participation in international economic decision-making and norm-setting.  The outcomes of major United Nations conferences and summits had already created a significant shared vision towards globalization, but the international community must build upon that through collective political resolve.

Earlier in the day, Amartya Sen, Lamont University Professor at Harvard and 1998 Nobel Laureate in Economics, said during a keynote address on “Forging coherence to achieve the Millennium Development Goals in the Context of Globalization”, that while economic globalization had brought prosperity to many, the challenge ahead was to ensure that the poor received fair and acceptable gains, including modern technologies, cost-effective drugs to treat epidemics, better market access and a greater say in international decision-making.  Demolishing the market economy and turning inward, which some anti-globalization forces favoured, was not the solution.  Rather, strong public policy reform to improve and expand basic education, land rights and usage, microcredit services and health care services would more effectively correct imbalances.  Too much attention had been focused specifically on attaining the Millennium Development Goals rather than on the Millennium Declaration itself.

Agreeing with that sentiment, Martin Wolf, Associate Editor and Chief Financial Commentator of the Financial Times newspaper, said that while the Millennium targets were a good yardstick to measure the efforts of developed countries to make a contribution to development the focus should be on improving the investment climate in order to help them exploit globalization’s opportunities.  The market economy had been proven over the past century to be the only arrangement capable of sustained increases in prosperity.  It depended for its existence on strong and effective, but limited, States that underpinned property rights, intervened along the line of market forces, and operated with a light touch.

Research by the World Bank had shown that developing countries regulated their economies much more than developed nations, and were frequently more vulnerable to corruption, he said.  However, it was important for States to make their own mistakes, even if their citizens suffered or their economies failed as a consequence.  In addition, global institutions could play a useful role and should be protected.  But their very legitimacy should arise from Member States.  The World Trade Organization (WTO), though successful, had strayed too far from its primary function of promoting trade liberalization.  It was now meddling with labour and environmental standards, which could lead to potentially serious complications.

Following Mr. Wolf’s remarks, Hilde Johnson, Norway’s Minister for International Development, presented the Norwegian Millennium Report (MDG 8).

Other speakers this afternoon included representatives of India, Russian Federation, China, Viet Nam, Nigeria, Belarus and San Marino.

Anwarul K. Chowdhury, High Representative for the Least Developed Countries, Landlocked Developing Countries and Small Island Developing States, also made a statement.

Presenting reports before the Committee were officials from the United Nations Educational, Scientific and Cultural Organization (UNESCO); the Department of Economic and Social Affairs; and the New York Office of the United Nations Office on Drugs and Crime.

The Second Committee will meet again at 9:30 a.m. on Monday, 1 November, for a dialogue on the 2004 Triennial Comprehensive Policy Review of Operational Activities for Development of the United Nations System.  The theme will be “United Nations development cooperation:  Reforms, resources, results”.

Background

The Second Committee (Economic and Financial) met this morning to hear a keynote address by Amartya Sen, Lamont University Professor at Harvard and 1998 Nobel Laureate in Economics, on the theme “Forging coherence to achieve the Millennium Development Goals in the context of globalization”.  It was also expected to begin its consideration of globalization and interdependence.

Before the Committee was a report of the Secretary-General on globalization and interdependence (document A/59/312), which focuses on the institutional and policy coherence needed to achieve the Millennium Development Goals in a globalizing world economy.  Examining the impact of globalization on economic growth, it notes the uneven development across countries and among both industrialized and developing nations.  China, for example, has grown rapidly over the past two decades, and many Asian countries have benefited from globalization, while several countries with economies in transition, as well as African and Latin American nations have progressed slowly or even declined.

The challenge is to create economic conditions that would allow all countries to gain from globalization and attain their development goals, the report says.  Although developed nations pledged to open up their markets, provide long-term debt relief and increase official development assistance (ODA), policy coherence is sadly lacking on the question of market access for agricultural products, manufactured goods and services of special interest to developing countries.  Greater consistency is needed in the aid, trade, investment, debt and development cooperation policies of developed nations, while developing countries must harmonize their trade and financial policies with their development goals.

Socially, globalization has affected people’s lives through trade and financial policies, which have been linked to rising wage inequality and increasing poverty, the report states.  The importation of world class technology, for instance, or the shift to high-technology exports, requires highly educated labour, reducing the demand for unskilled workers.  At the same time, opening up the financial sector has contributed to large-scale speculative capital flows, leading to serious financial crises with large social costs.  Some degree of coherence is needed in pursuing development goals and liberalization policies.

According to the report, rapid globalization has also led to environmental degradation, as unsustainable consumption and production patterns in the developed world seep through to developing countries owing to the increasing integration of global markets.  Growing demand has resulted in over-consumption, putting greater pressures on natural resources, climate and ecosystems.  A global strategy is needed to conserve biodiversity and mitigate climate change.  Sustainable development policy coherence is needed at the local, national and global levels, as is a long-term horizon to tackle global issues without boundaries.

The report recommends national efforts to improve policy coherence, increased investment in health and education and education policies focusing on universal coverage for girls and boys, improved school retention and completion rates, new technological resources and sufficient public funds for formal education and training programmes.  Jobs with incomes above the poverty line should also be increased, as should programmes designed to give informal workers training and access to formal financial sources and social protection.

Regionally, measures should be taken to include social and environmental issues in regional cooperation, deepen policy integration and promote institutional coherence, the report says.  Regional commission meetings should contribute to bridging institutional gaps among the national, regional and global processes in response to globalization.  At the global level, coherence is needed in trade, aid and macroeconomic policies.  Enhanced coordination among global institutions dealing with development, finance and trade is also necessary.  There is a need to promote an international dialogue on measures to give developing countries policy space and flexibility in managing the risks of integrating into the global economy.  Enhanced participation by developing countries in international economic decision-making would help make decisions more balanced and supportive of development goals.

The Committee also had before it a report of the Secretary-General on integration of the economies in transition into the world economy (document A/59/301), which reviews macroeconomic progress in transition countries, trade in goods and services, direct investment, external debt, and capital as well as labour flows.  There has been considerable progress in transition-country economic integration, although the degree varies by transition aspect and country.  Domestic policies and international assistance have helped foster growth, but integration must be expanded to sustain growth and reduce poverty in some countries, particularly in the Commonwealth of Independent States (CIS).

While integration has speeded up transition-country conversion from planned to market economies, especially in market liberalization, institution building, industrial capacity, knowledge and technology, progress has been mixed, the report notes.  The eight Central European and Baltic countries that recently joined the European Union have advanced, but many others in South-eastern Europe and smaller, low-income CIS countries still face difficulties in supporting growth and balancing their resources to achieve functioning structures.  Moreover, integrating into the global economy poses several risks to transition countries as they depend increasingly on trade partners and products, making further trade diversification and market penetration crucial.  Maintaining sustainable domestic demand requires the strengthening of small and medium-sized enterprises in South-eastern Europe and the CIS as well as greater access to better infrastructure banking services.

Before entering the euro zone, new European Union member countries need strong financial market supervision and competition to avoid misalignment of the exchange rate, the report says.  Strengthening banking supervision will also reduce the risks of a credit boom, which may follow after joining.  While transition economies need better access to international capital markets to replace obsolete capital and foster investment-oriented growth, greater capital mobility also poses risks.  Premature liberalized capital flows and trade can cause instability if economic fundamentals and policies are weak, as was the case in the Russian Federation in 1998.  Certain macroeconomic policies, such as shifting to more flexible exchange rates, could reduce vulnerability to external shocks.

Also before the Committee was a report of the Secretary-General on preventing and combating corrupt practices and transfer of funds of illicit origin and returning such assets to the countries of origin (document A/59/203), which highlights initiatives within the legal framework of the United Nations Convention against Corruption to recover assets in Croatia, Nigeria, Norway, Pakistan, Slovakia, Slovenia and Turkey.

The Committee also had before it a report of the Secretary-General on international migration and development (document A/59/325), which updates the United Nations activities as well as the Organization’s cooperation with relevant intergovernmental organizations in the area of migration and development.  It also reviews major initiatives by Member States to create a multilateral cooperation framework for improving migration management.

The Committee also had before it notes by the Secretary-General on culture and development (document A/59/202), and on industrial development cooperation (document A/59/138).  Another note transmits the report of the Director-General of the United Nations Industrial Development Organization (UNIDO) on industrial development cooperation (document A/59/138), which reviews the Agency’s activities over the past two years in the context of the Millennium Development Goals.

Keynote Address

AMARTYA SEN, Lamont University Professor at Harvard and 1998 Nobel Laureate in Economics, said that while economic globalization was an excellent overall goal and was making a positive contribution in the contemporary world, it was hard to deny the difficulty of persuading many people that globalization was a blessing for all, including the poorest.  Globalization’s goals could not focus only on commodity relations while shunning the relations of minds.  The consequences of globalization must be assessed in an understandable way.

Globalization had brought prosperity to many parts of the world, such as in East Asia, he said. Whereas pervasive poverty and small pockets of affluence had characterized the world a few centuries ago, the advent of modern technology, international trade and open societies were changing that. Very poor countries clamoured for modern technologies. They wanted access to good drugs, market access for their products, a greater voice in and attention from the rest of the world. The issue was not that globalization was a bad thing that should be stopped, but that its benefits must be more fairly distributed.

The anti- and pro-globalization argument had suffered from somewhat unfocused questions, he continued.  It was not true that the poor were getting poorer; quite the contrary, much depended on the indicators used to measure economic prosperity.  Nor were failures largely a result of global relations, they related more to domestic policies.  Expanding basic education, health care, land reform and credit facilities, including microcredit, was important for correcting imbalances. Nor was it accurate to say globalization posed no problems because the poor also benefited from it. The real question was whether the poor were getting fair and acceptable gains from globalization, whether they could feasibly have a fairer deal and if so, through what international and domestic arrangements.

Anti-globalization forces must ultimately seek a global solution, not just local withdrawals, he said, stressing that the point was not to demolish the market economy, but to alter it in order to create enabling conditions.  Market outcomes were massively influenced by public policies in education, epidemiology, land reform, microcredit facilities, legal reform, protection and so on.  More must be done to achieve security and equality in those areas.  While global policies had a role in defending democracy, they needed to re-examine the adequacy of global institutional arrangements in such areas as trade, medicine and arms.

While more participation was needed to forge greater coherence to advance the Millennium Development Goals, too much attention had been focused specifically on the goals rather than on the Millennium Declaration itself.

Remarks on Keynote Address

MARTIN WOLF, Associate Editor and Chief Financial Commentator of the Financial Times, noted that the Secretary-General’s report seemed to envisage globalization as a process to be managed and overseen by complex political machinations, rather than economic forces.  Its expectations were far too ambitious, and fell short on the needed political and economic reforms.

One description of globalization saw it as the integration of economic activities across borders through markets, spurred on by technological and policy integration as well as a greater reliance on market forces, he said.  Nations failing to obtain what they needed from the world economy may have been barred from doing so by barriers at home or abroad.  Anther description of globalization said that its success depended on the interaction between domestic resources and policies on the one hand, and the global market on the other.

Entirely too much attention had been focused on the Millennium Development Goals in discussions of globalization, he said.  They were inherently arbitrary, serving better as a yardstick to measure the efforts of developed countries to contribute to development.  Developing a successful market economy today often went hand in hand with the phrase “investment climate”.  In helping developing countries to exploit the opportunities offered by globalization, it would be better to focus on that.

He said the market economy had been proven over the past century to be the only arrangement capable of sustained increases in prosperity.  The market economy depended for its existence on strong and effective, but limited States, which underpinned property rights, intervened along the line of market forces, and operated with a light touch.  Research by the World Bank had shown that developing countries regulated their economies much more than developed nations, and were frequently more vulnerable to corruption.  However, it was important for States to make their own mistakes, even if their citizens suffered or their economies failed as a consequence.

Global institutions could play a useful role and should be protected, but their very legitimacy should arise from their member States, he said.  The World Trade Organization (WTO), though successful, had strayed too far from its primary function of promoting trade liberalization.  It was now meddling with labour and environmental standards, which could lead to potentially serious complications. The biggest priority of a global trading system should be to bring the world’s massive preferential and bilateral trade agreements under control.

As for international development assistance, he said, the ODA was far from a guarantee of successful development.  It was set at too low a level, and the case for increasing it was overwhelming, but aid should never be so large that it freed governments from the need to raise money from their own people.  While countries should learn from their own mistakes, there was also a need for some form of global capacity to intervene when States had failed or were failing.

Questions and Answers

Mr. WOLF, responding to representatives’ questions about the environmental impact of globalization, said it was wrong to describe globalization as environmentally neutral.  The fundamental problem arose from the failure to internalize the relevant costs to decision makers.  Things could get better or worse.  For example, there was great evidence that the protectionist agricultural policies of many high-income countries that resulted in intensive farming were extremely damaging environmentally.  Some of the world’s greatest environmental catastrophes had occurred after the collapse of the communist system in Eastern Europe.  There was no substitute for a proper global environmental regime.

If environmental damage was local, it was reasonable for different countries to have different views about the level of tolerability of such damage depending on local physical conditions, he said.  A densely populated country would have far lower tolerance of industrial pollution than a less populated country, which could build plants in unpopulated areas.  It was necessary to have an intrusive view of the way in which States treated their citizens. At present the world must do things at a global level in order to move toward a more just, equal world.

Regarding the issue of trade preferences, he said he supported the Generalized System of Preferences (GSP) mechanism for developing countries and the European Union’s proposed changes in that regard, but he disapproved of the proliferation of bilateral agreements centred on major developed countries, which were not entirely free-trade accords.  The business community had difficulty in coping with many such agreements.  A multilateral system approach with a broad range of countries was a better arrangement.

Mr. SEN agreed, saying that the bilateral and multilateral approaches to trade could be radically different and that a multilateral, broad-based approach was necessary.

Responding to a question on the danger of failing to institute timely and complete democratic reforms in developing countries desperately needed such changes, he emphasized the urgency of pushing the reform process forward.  If reforms were too small and democracy did not advance fast enough, those countries were indeed at risk of regressing.

Launching of Norwegian Millennium Report

HILDE JOHNSON, Minister for International Development of Norway, said that her country’s Millennium report (MDG 8) showed commitment, updates on policy coherence and delivery on framework conditions.  In 2003, Norway had abolished duties and quotas for products from least developed countries, improved access for imports from other developing countries, and prepared to abolish export subsidies as part of a negotiated solution.  The country still had a long way to go in market access for developing countries, but would engage in the WTO negotiations to ensure a result that benefited developing countries.  It would also continue its policy of forgiving debt without borrowing from the development budget.

In addition, Norway aimed to increase development assistance by 2005 to 1 per cent of gross national income (GNI) –- an increase of more than 10 per cent over 2004, she said the country was also ensuring that investments were not made in companies that violated human rights or basic humanitarian principles, or in companies engaging in gross corruption or activities contributing to severe environmental degradation.  Norway was actively supporting international initiatives against corruption and money laundering; applying its own anti-corruption legislation to the activities of Norwegian companies abroad; and helping partner countries to help fight corruption, build capacity and improve governance.

As for environmental problems, she noted that Norway was a major producer of oil and natural gas, which generated significant emissions of greenhouse gases. The country was working to reduce those emissions and helping developing countries in their efforts, by supporting emissions trading, for example, and other measures to reduce emissions worldwide.

The Committee then turned to its agenda item on globalization and interdependence.

Introduction of Reports

HANS D’ORVILLE, Director of the Bureau of Strategic Planning for the United Nations Educational, Scientific and Cultural Organization (UNESCO), introduced a note by the Secretary-General on culture and development (document A/59/202), transmitting the report of the Agency’s Director-General on the implementation of General Assembly resolution 57/249 of 20 December 2002.

Development and culture were intricately linked and creativity was essential to the development process, he said.  The preservation of cultural diversity within the context of globalization had been highlighted during a string of events in the past several years, including the 2002 Johannesburg World Summit, the 1998 Stockholm Intergovernmental Conference on Cultural Policies for Development and the 1988-1997 World Decade on Cultural Development, as well as in the 1996 report of the World Commission on Culture and Development and the UNESCO Universal Declaration on Cultural Diversity.

He stressed the need for Member States to support the principle of diversity based on constructive dialogue, noting that the concept of diversity reaffirmed that cultural pluralism was inseparable from the democratic framework.  International solidarity was needed to support countries whose cultural expressions were threatened in view of the current imbalance in the flow and exchange of cultural goods and services.  The dual cultural and economic nature of goods and services would be covered by a draft convention aimed at implementing the UNESCO Declaration.  In September, UNESCO had met with Member States to seek their views on that text.

Questions and Answers

Responding to a question on intellectual property rights, Mr. D’ORVILLE said UNESCO was committed to upholding the intellectual property rights of crafts industries in developing countries, in cooperation with the World Intellectual Property Organization (WIPO).  It was also focusing on multilingual knowledge and the sharing knowledge that was not protected by property regulations covering the Internet and the public domain.  The Agency was attempting to empower countries to find such information and make the best use of it.

SARBULAND KHAN, Director, Division for Economic and Social Council Support and Coordination, Department of Economic and Social Affairs, introduced the report on globalization and interdependence (document A/59/312), saying that the key challenge facing developing countries was the uneven and differentiated impact of globalization.  New technologies, markets and capital flows had created new opportunities but had also brought unexpected risks.  Globalization could be a source of rapid economic growth, but could also exacerbate inequalities in income and resources.

Globalization’s potential for development had not been recognized, he said. One of the main challenges was to manage its differential impacts in the social, economic and environmental areas so that all could benefit, especially developing nations.  The net impact of globalization on the environment was mixed, leading in some cases to unsustainable patterns of production and consumption.  The primary focus should be on ways to promote policy coherence that would lead to mutually supportive outcomes rather than contradictory results.  The international community must ensure close coordination of social, economic and environmental policies.

JOSEPH CHAMIE, Director, Population Division, Department of Economic and Social Affairs, introduced the report of the Secretary-General on international migration and development (document A/59/325), noting that no comprehensive international mechanism existed to address the many complex linkages between international migration and development.  Member States generally considered that the United Nations role in collecting, analyzing and disseminating information on international migration was essential to dispel myths and appropriately guide policy-making.  They also emphasized the need for enhanced cooperation and coordination among bodies of the United Nations system and other international organizations involved in international migration.

He said that international migration was a global phenomenon, involving a growing number of States as origin, recipient or transit countries of migrants, and having increasingly significant demographic, economic, social and political consequences.  It was at the forefront of the political agenda and there was a growing expectation that the United Nations should address that global challenge comprehensively.  In that regard, the 2006 High-level Dialogue would provide opportunities to address international migration’s many facets.

VINCENT McCLEAN, United Nations Office on Drugs and Crime, introduced the report on “Preventing and combating corrupt practices and transfer of funds of illicit origin, and returning such assets to the countries of origin” (document A/59/203), noting that asset recovery was one of the key issues in negotiating the United Nations Convention against Corruption.  Recently, the Secretariat had submitted a study to the fourth session of the Convention’s Ad Hoc Committee outlining major obstacles to asset recovery, which included anonymity of transactions impeding the tracing of funds and prevention of further transfers; lack of technical expertise and resources; lack of harmonization and cooperation; problems in prosecuting and convicting offenders as a preliminary step to recovery; concerns about the motivation behind recovery efforts; and competing claims within and across States.  The report emphasized the significance of effective asset recovery provisions in supporting country efforts to redress the worst effects of corruption, and in sending a message to corrupt officials that there would be no place to hide their illicit assets.

At a high-level political signing conference for the Convention, provisions of the Convention on asset recovery had attracted considerable attention, he said. Both developing and developed countries had underlined the importance of the chapter on asset recovery in view of obstacles to sustainable development and burdens that asset misappropriation imposed on society’s most vulnerable groups. Representatives of States whose resources had been misappropriated had described the damage caused by transfers abroad of misappropriated assets and appealed for further cooperation in recovering them.

IAN KINNIBURGH, Director, Development Policy and Planning Office, Department of Economic and Social Affairs, introduced the report of the Secretary-General on integration of economies in transition into the world economy (document A/59/301), noting that it analyzed recent macroeconomic developments and policies, highlighted the increased role of the European Union in the integration process in the last decade and analyzed the integration of those economies through trade in goods and services as well as capital and labour flows.

Capital flows played a key role in integrating those economies into the world economy, he continued.  While foreign direct investment (FDI) was a resilient source of capital inflows, such flows had followed different paths in the subregions, slowing in 2003 in the new European Union member countries and expanding in South-eastern Europe and in resource-rich CIS countries.  Economic reform, including the creation of a strong private sector and legal system, institution building, and trade and foreign exchange liberalization, had been key in attracting foreign investment.  By contrast, the movement of labour continued to be limited.  The report also outlined the efforts of transition economies to continue economic restructuring.

Questions and Answers

Responding to a query about the major issues of international migration, Mr. CHAMIE said that a high priority at the state level was managing migrants effectively and fairly.  At the community level, the main focus must be to adjust when large numbers of migrants performing a useful activity departed.  At the individual level, finally, the issue was one of fair treatment, with many migrants facing huge risks crossing oceans and deserts to reach their new destination.

To another question, about illegal asset transfers, Mr. MCCLEAN replied that the Convention introduced a comprehensive set of standards, applications and rules to strengthen legal and regulatory regimes, take preventive measures against corruption and criminalize its most prevalent forms.  It also required States to return assets obtained through corruption to the countries where they had originated.  The international community could look forward to qualitative changes in national legislation as well as global cooperation in preventing transfers, tracing and returning illegal assets.

In response to a question about the role of private banks in dealing with illegal transfers, he said the Convention contained specific provisions relating to money laundering.  States would be required to set up domestic regulatory and supervisory regimes requiring them to cooperate in detecting and deterring all forms of money-laundering.  Financial institutions would need to know where their customers’ funds came from, and banks were required to cooperate in ensuring that illegally derived funds were not laundered, and that bank secrecy would not impede investigations of criminal offences.

Regarding the expansion of regional integration in the CIS States and other parts of the world where there was economic cooperation, Mr. KINNIBURGH said that the accession of transition economies to the European Union would not have been as effective if had there not been a stimulus to undertake wide ranging economic reforms as a prerequisite to membership.  For other countries seeking to join trade blocs like the European Union, the same principle would apply.  There were many lessons to be learned from the European Union experience.  Trade liberalization within groups of countries would be an important first step in that regard.

On the long-term impact of oil prices on the economies of commodity-dependent countries, he said they were vulnerable to a potential setback in the current high prices of oil.  Many countries had recognized that vulnerability and taken steps to more wisely manage the boom, including by the creation of stabilization funds.

Statements

ANWARUL K. CHOWDHURY, High Representative of the Secretary-General for the Least Developed Countries, Landlocked Developing Countries and Small Island Developing States, expressed concern that the serious gender imbalance in some least developed countries (LDCs) caused by the globalization and trade liberalization would widen after the end of special trade arrangements on textiles and apparel later this year.  Bangladesh and Lesotho employed large numbers of women workers in government factories, which would lose their market share in the onslaught of trade liberalization.  It was important that trade and financial liberalization be consistent with social development goals.  Poverty Reduction Strategy Papers were a key planning mechanism for the most vulnerable countries and should clearly reflect the ability of LDCs to integrate into the global economy and benefit from globalization.

Regarding international migration and development, he said remittances could constitute a very important source of foreign exchange enabling, LDCs to acquire vital imports or pay off external debts.  In most cases they were the most secure source of foreign exchange income.  At the household level, remittances helped reduce poverty and created opportunities for better health and education.  In 2002, according to the World Bank, the worker-remittance receipts of developing countries totalled $80 billion, exceeding the level of the ODA.  However, the amount sent through informal channels in most LDCs was estimated to be just as high.  But remittances were not and should not be seen as a substitute for development assistance.

SULTAN AL-MAHMOUD (Qatar), speaking on behalf of the Group of 77 and China, said that the inequitable distribution of globalization’s benefits and the ever-widening gap between developed and developing countries had underscored the need for institutional and policy changes at all levels.  Several developing countries had reformed their policies, but those could only be sustained through increased external assistance.  The international community must create an enabling economic environment through concerted action on trade, debt and development assistance for the greater integration of developing countries into the world economy.  It was also vitally important to increase developing-country participation in international economic decision-making and norm-setting.

The outcomes of major United Nations conferences and summits had already created a significant shared vision towards globalization, but the international community must build upon that with collective political resolve, he said.  Putting the Millennium Development Goals and other development targets at the centre of economic institutions and policies was critical in confronting the forces unleashed by globalization.

Turning to international migration, he said that the widening economic and social gap between and among many countries, the marginalization of some countries in the global economy, and the absence of peace and security had contributed to large migration flows.  International migration was becoming a complex phenomenon and was now a key issue of international interest and concern.  Since individual and private remittances contributed significantly to development and poverty reduction in many developing countries, the international community must take measures to reduce the cost of remittance transfers, and governments should seek ways to set up programmes and develop incentives to promote and provide opportunities to invest those remittances.

KOEN DAVIDSE (Netherlands), speaking on behalf of the European Union, said that the recent report of the World Commission on the Social Dimension of Globalization focused on people and human resource development and noted that employment was the engine of economic growth and the most sustainable way to eradicate poverty and social marginalization.  Cross-cutting priority issues to strengthen the social dimension of globalization should include sustainable growth; investment; employment and poverty reduction; gender equality; integration of the informal economy into the economic mainstream; good governance; promotion of core labour standards; education and opportunities for young people.

While globalization was also blamed for growing poverty and inequality, the real concern was how to make good use of it so that economic interaction and technological progress adequately benefited the poor, he said.  Globalization could not be stopped and would succeed if it was based on global social standards. That required policy reform, institutional development and global cooperation. Making the Millennium Development Goals a reality required progress in implementing the Monterrey Consensus, particularly as it concerned trade and debt relief, helping developing countries participate fully in international trade and channelling a greater portion of their limited resources into development.  The European Union was committed to that end.

SAMIK LAHIRI (India) said that regimes governing international trade, money, finance, and technologies were critical determinants of development.  Not only did they establish the parameters and “rules of the game” for the flow of goods, services, technologies and people across borders, but they also influenced the actual flows in those areas.  There had been, regrettably, an erosion of the United Nations role in shaping those regimes and providing political guidance for them.  Its watchdog function in pursuing the development agenda had been whittled down.  Ongoing efforts at United Nations reform must address the question of restoring the development dimension to the Organization’s agenda, making use of its democratic and universal advantage.

An important tool in developing country efforts to benefit from globalization was access to technology, he said.  Access was vital in enhancing competitiveness in global markets and no mechanism had been developed for sharing technology with developing countries on preferential, non-commercial and concessional terms.  That issue needed to be urgently addressed.  India’s national experience had demonstrated that information technology offered enormous potential for meeting developmental challenges by adding value to nearly all sectors of national activity.  At the global level, it was important to address the challenge of narrowing the “digital divide”.

VASILIY NEBENZIA (Russian Federation) said the United Nations had a central role in coordinating globalization efforts with the aim of achieving the Millennium Development Goals.  It was important to improve and deepen discussion on the achievement of the goals.  The 2005 five-year review of progress in implementing them would cover many aspects of globalization within the framework of many economic sectors and serve as an important mechanism to assess what had been achieved thus far and how best to address the challenges ahead.

Regarding international migration, he said that greater cooperation, particularly regional cooperation, was needed among origin, transit and destination countries.  The CIS agreement in that regard had laid the groundwork for addressing issues of migrants, refugees and displaced persons.  The objective of the 2006 high-level dialogue on international migration was to manage and analyze the migration process.  That would require reliable and detailed statistics on migration flows.  Regarding prevention of and cooperation to end illicit funds transfer, the Russian Federation had taken several steps, including efforts to create a regional group in Central Asia to combat money-laundering and terrorism funding through the Financial Action Task Force on Money-Laundering.

YAO WENLONG (China) said that globalization should contribute to development, lead to a harmonious coexistence between man and nature, and benefit all.  It was necessary to restructure the existing inequitable international economic order to meet the ends of a globalized economy.  Currently, world economic affairs were dominated by a small number of countries or groups of countries, but all nations were entitled to full participation in global economic decision-making and in drawing up international standards and rules.

She stressed that the world community must promote open, fair and rational international financial and trading systems to reduce the risks posed to developing countries by globalization.  It was also important to build a new type of relationship between the North and the South, with all countries acting in a spirit of interdependence, sharing responsibilities and risks.  Developed nations should reinforce their assistance to developing countries, reduce debt, increase market access, lift trade barriers, speed up financial and technology transfer, and gradually bridge the development divide.

DUONG HOAI NAM (Viet Nam) said that trade was a driving force for development, and that enhanced market access for developing countries would give them the means to harness trade for development and poverty reduction.  Offering them duty- and quota-free access to world markets would greatly benefit those countries at little cost to the rest of the world.  The recent market-opening initiatives of the European Union and other countries were important steps, which, to be completely effective, should be made permanent, extended to all goods and subjected to simple and transparent rules of origin.  Doing so would give developing countries, particularly LDCs, the confidence to continue difficult domestic reforms and ensure effective use of debt relief and aid flows.

Viet Nam was working to accelerate its integration into the global economy, he continued, noting that annual economic growth was more than 7 per cent and the poverty rate had reduced rapidly.  Viet Nam was strongly committed to integrating the Comprehensive Poverty Reduction and Growth Strategy into local development plans, and was actively preparing for its accession to the WTO, as well as strengthening international and South-South cooperation.

OLUSEGUN AKINSANYA (Nigeria) said that migration provided some long-term benefits, among them the exchange of technology and skills, but the loss of trained workers, especially in the health sector, was of great concern to developing countries.  It had been argued that developing countries derived benefits from migrant remittances, and that in some cases they had become the second largest source of external funding after foreign direct investment. Remittances may reduce the immediate poverty of benefiting families, but how could they further national development, given that they were private and not usually targeted for investment in long-term capital expenditures?

Continuing, he said the fight against corruption must involve international cooperation, since national efforts alone would prove ineffective.  The prevention, recovery, and repatriation of the proceeds of corruption were onerous tasks.  The tenuous cooperation Nigeria had received from some countries on funds looted from its coffers and stashed in banks in those same countries had demonstrated the difficulties of asset recovery.  It was in the international community’s collective interest to cooperate in fighting corruption, which could fuel conflict, undermine democracy and finance terrorism.

IGOR KRASNOV (Belarus) said the Secretary-General’s report on the integration of transition economies into the world economy highlighted the significant difference in socio-economic development and integration by countries of Central and Eastern Europe and the Commonwealth of Independent States (CIS). Most CIS nations were ranked among countries with low per capita income, with 12 to 19 per cent of their populations living in absolute poverty.  They were increasingly dependent on international financial, economic and consulting assistance.  United Nations bodies, including the United Nations Economic Commission for Europe (ECE) and the United Nations Conference on Trade and Development (UNCTAD), should play a key role in determining the scale and type of assistance needed by and allocated to European economies in transition.

International assistance should support national priorities and development programmes, he continued.  The ECE, the United Nations Development Programme (UNDP) and the Bretton Woods institutions should pay special attention to issues concerning assistance to transition economies creating attractive conditions for direct investment.  Despite progress in creating a friendly investment climate, foreign capital inflows had decreased in 2003.

DANIELE BODINI (San Marino) said globalization was not merely the transfer of technology and wealth, but a complicated equation involving many variables which changed every day in an unpredictable fashion.  For example, today, the price of oil was at an historic high that threatened importing countries, but benefited exporting nations.  The price was influenced by supply and demand, which in turn was influenced by unpredictable external variables, such as cold winters or hot summers, destruction of oil infrastructures during war, natural disasters and acts of terrorism.

Another example was the currency trade, he said.  The euro, for instance, has been quite strong over the past few years, despite the fact that some European economies, encumbered by obsolete and rigid economic models, were shrinking.  Most economists had predicted a gloomy future for Europe, which would face increasing difficulties in exporting products, and accelerating stagnation.  So why was the euro strong?  There was no obvious answer, but it was certainly an effect of globalization.

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