PRESS CONFERENCE ON WORLD ECONOMIC DEVELOPMENTS, POLICY CHALLENGES

The United Nations Development Agenda marked an important thrust in returning the Organization to its position “ahead of the curve”, especially on climate change, Jomo Kwame Sundaram, Assistant Secretary-General for Economic Development, said at a Headquarters press conference today.

“It would be very important for the United Nations to be able to contribute to and provide significant leadership by critically evaluating what has already been done with the Kyoto Protocol and other schemes and mechanisms in order to be able to step up to the plate and identify the huge challenges,” Mr. Jomo said.

Mr. Jomo said one marker of progress in the area of climate change was the consensus on a carbon tax, recently endorsed by the International Monetary Fund (IMF), amid sharp criticism of carbon markets.  What remained to be examined was whether a carbon tax could become the basis for a redistribution of financial resources, which would be necessary to ensure that dealing with climate change did not undermine developing countries’ prospects for development.

Discussing recent developments in the world economy and current policy challenges, he was accompanied by Joseph Stiglitz, President of Columbia University’s Initiative for Policy Dialogue, and Jagdish Bhagwati, Columbia professor and Senior Fellow in International Economics at the Council on Foreign Relations.  The United Nations Development Agenda, released last month by the Department of Economic and Social Affairs, examines major strategies, goals and commitments made at United Nations conferences and summits since 1990.

Mr. Stiglitz, a Nobel Laureate, presented a mixed review of global economic growth, noting that recent booms in some African and Latin American countries and unprecedented growth rates in East and South Asia were unfolding into “not so good” prospects for continued growth, partly due to the slowdown in the United States economy, which bordered on the possibility of a recession.  In addition, the current United States mortgage crisis was likely to continue and get worse.  “That will have ramifications for the developing world.  Poor regulation and bad macroeconomic policies in the United States have had global consequences.”

Turning to the current stalled Doha negotiations, he said the growth of bilateral trade agreements was undermining the multilateral trading system built over the last 60 years, and insufficient attention was being paid to the fact that issues like intellectual property were being “stuffed” into trade or investment agreements.  Those agreements went beyond protection and were an attempt to restrict the ability of countries to engage in social, environmental and other forms of regulation.  “Many countries have been put under pressure to sign these agreements; hidden into trade agreements, they are very much adverse to the interests of developing countries.  Evidence has it that they have not promoted investment.”

Mr. Bhagwati, taking another view, said development was indeed the objective of the World Trade Organization, and noted that seven rounds of talks had reduced the external tariffs of developed countries to 5 or 6 per cent.  That substantial achievement coincided with growth in developing countries that managed to take advantage of that opening.

He said that, since the creation of the United Nations, countries that had taken full advantage of falling trade barriers in the 1950s and 1960s had progressed in increasing their exports.  That had been followed by more investments, advances in technology and higher rates of literacy.  China and India were examples, to a lesser extent.  “If we manage to keep markets open, we can achieve a lot.”

Pointing to “substantial gains” in the Doha talks, he said progress had been made on farm subsidies, adding, in reference to generic drugs, that the issue of intellectual property did not belong on the World Trade Organization’s agenda, but had been “muscled” onto the table by the United States.  However, negotiators had made strides on generic drugs in the current Round.  “We have substantial evidence that, in the long run, openness pays off and this applies to developing countries.”

Questioned about the rivalry among economists in general, Mr. Jomo said that, despite apparent differences, there was consensus on a range of issues in the United Nations, including intellectual property rights and international financial liberalization.  Debate was part of what economic life was about.

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For information media • not an official record