Economic and Social Council

Special High-Level Meeting

4^th & 5^th Meetings (AM & PM)

With Nearly 75 Million Out of Work during 2011, Secretary-General Urges Economic

and Social Council to Address Stability in Broadest Sense

 

Coherence, Cooperation, Coordination Stressed in Meeting with Bretton

Woods Bodies, World Trade Organization, UN Conference on Trade and Development

In light of new global challenges such as massive unemployment and climate change, the Economic and Social Council focused today on new strategies to overcome them in the areas of coherence, coordination and cooperation in the context of financing for development.

As it began its two-day special high-level meeting with the Bretton Woods institutions, the World Trade Organization and the United Nations Conference on Trade and Development (UNCTAD), United Nations Secretary-General said:  “Nearly 75 million youth were unemployed last year.”  He urged the participants to use the meeting as an opportunity to address stability in the broadest sense.  “Poverty, discrimination and violence feed each other,” he noted.  It was important to invest in people and clean technologies, which could create jobs and finance sustainable development.

The world had changed dramatically in the last year, he continued.  The Arab Awakening had demonstrated the “power of people to write history”.  Employment was critical in that region and beyond, the Secretary-General said, calling for policies that would generate jobs which in turn would pay a decent wage so that people were able to “survive and thrive”.  Decent and productive jobs not only protected families from hunger and suffering, but also created a generation of consumers, he said.

He also touched upon sustainable development, saying that it should mean “nutrition for poor children, safe drinking water and health care in communities”.  Sustainable development demanded policies that would boost economic growth without degrading the environment, he said.  Looking ahead to the United Nations Conference on Sustainable Development (Rio+20), he said:  “You in this room have the power to help make Rio+20 a success,” describing the June 2012 meeting as a “once-in-a-generation-opportunity” that would allow citizens of the world to agree on sustainable solutions in their efforts to build the future for the environment, the economy, and equity.

Miloš Koterec (Slovakia), President of the Economic and Social Council, said at a time of uncertainly regarding the prospects of the global economy, there was an urgent need for an effective and coordinated policy response by Governments that would place the world economy on the path of sustained growth and development.  That response must include coordinated economic stimulus, additional resources for a transition to a green economy through required major structural and technological changes in key sectors, and stronger incentives for involvement by the private sector.

Speaking on behalf of General Assembly President Nassir Abdulaziz Al-Nasser ( Qatar), his Chef de Cabinet, Mutlaq Al-Qahtani, emphasized the need to remember that the victims of the multiple global crises were the world’s poorest people.  “Hit hardest are the most vulnerable populations in the most vulnerable countries,” he added.

Jorge Familiar Calderon, Acting Executive Secretary of the World Bank’s Development Committee, said more must indeed be done to address their plight, particularly in the private sector, which was an “engine for economic development”.  The private sector was not only the driving force behind job creation, productivity, innovation and the accumulation of wealth, it was also responsible for 91 per cent of the $1 trillion in annual capital flows into developing countries, he said.  “It is these jobs and the fiscal resources derived from formalized private-sector activity that provides the foundation for the bulk of poverty alleviation.”

Anthony Mothae Maruping ( Lesotho), President of the United Nations Conference on Trade and Development (UNCTAD) Trade and Development Board, as well as Chair of the UNCTAD XIII Intergovernmental Preparatory Committee, called for reform of the international trade architecture.  “The world needs updated rules and regulations that best fit the current and future nature of the multilateral trading system,” he stressed.  Bold and innovative approaches were needed and all monetary and exchange rates, fiscal and incomes policy instruments should be applied with “the right mix”, he said.

The views of other major international stakeholders were presented by Jianhai Lin, Secretary of the International Monetary Fund (IMF), and Shishir Priyadarshi, Director of the World Trade Organization’s Development Division.

Also today, the Council held two thematic debates, the first on “Financing of sustainable development” and the other on “Promoting sustained, inclusive and equitable economic growth, job creation, productive investment and trade”.  The panellists in the first debate were Rachel Kyte, Vice-President of the World Bank’s Sustainable Development Network, and Marianne Fay, Chief Economist for Sustainable Development and lead author of the World Bank Green Growth Report.

In the ensuing interactive discussion, many speakers reiterated calls for more coherent, transparent and equitable international financial structures, and requested information on how the private sector could contribute to developing countries’ efforts to adapt to and mitigate the effects of climate change.

During the debate on “Promoting sustained, inclusive and equitable economic growth, job creation, productive investment and trade”, delegates heard presentations by panellists Martin Rama, Director and lead author of the World Bank’s World Development Report 2013, and Heiner Flassbeck, Director of UNCTAD’s Division on Globalization and Development Strategies.

Taking part in today’s proceedings were representatives of he Algeria (on behalf of the “Group of 77 and China”), Jamaica (on behalf of the Caribbean Community), Nepal (on behalf of the Group of Least Developed Countries), Mexico, France, Nauru (on behalf of the Alliance of Small Island States), Bangladesh, Jordan, the European Union delegation, Brazil, China, Belarus, Norway and Germany.

Also participating were members of the business sector and representatives of civil society and the non-governmental organization community.

The Economic and Social Council will meet again at 10 a.m. on Tuesday, 13 March, to conclude its special high-level meeting.

Background

The Economic and Social Council began this morning its annual special high-level meeting with the Bretton Woods institutions, the World Trade Organization and the United Nations Conference on Trade and Development (UNCTAD).  Built around the theme “Coherence, coordination and cooperation on Financing for Development”, the two-day meeting will include four informal thematic debates in addition to the plenary.  Today’s thematic debates will include presentations by experts, while focusing on the promotion of sustained, inclusive and equitable economic growth, job creation, productive investment and trade and financing for sustainable development.

Opening Remarks

MILOŠ KOTEREC (Slovakia), President of the Economic and Social Council, said that this year’s meeting was being held “at a time of uncertainly regarding the prospects of the global economy”.  There was an urgent need for an effective and coordinated policy response by Governments that would place the world economy on the path of sustained growth and development, he said.  The immediate period called for a coordinated economic stimulus, including measures to spur job creation.  He warned that while fiscal coordination was important in the medium term, premature fiscal tightening should be avoided as it may worsen economic and employment conditions.  He called for additional resources for the transition to a green economy, which required major structural and technological changes in a number of key sectors.  There was also a need to provide stronger incentives for private-sector involvement in sustainable development.  The current meeting was a testimony to the Council’s ability to bring together a broad range of actors to generate ideas that could shape global action, he said, urging participants to use the occasion to tackle key issues in a “holistic and integrated way”.

MUTLAQ AL-QAHTANI, Chef de Cabinet of the President of the General Assembly, delivered a statement on his behalf, said the meeting was being held at a relevant time as many countries were struggling from the impacts of the global economic and financial crisis.  “Hit hardest are the most vulnerable populations in the most vulnerable countries,” he added.  The themes chosen for the meeting could not be more appropriate and timely, he stressed.  “We all must think creatively and act cooperatively to address these challenges.”  Looking ahead to next month’s United Nations Conference on Trade and Development meeting, in Doha, and June’s United Nations Conference on Sustainable Development (Rio+20) in Rio de Janeiro, he said both would offer opportunities to create new political themes as there was a considerable need for “decisive and effective action”.  Global governance should go beyond crisis management and ensure preparedness to respond to the realities of the twenty-first century, he said, emphasizing the critical importance of strengthening the Organization’s role in that context.

ANTHONY MOTHAE MARUPING (Lesotho), President of the Trade and Development Board of the United Nations Conference on Trade and Development (UNCTAD) and Chair of the UNCTAD XIII Intergovernmental Preparatory Committee, said it was imperative that all relevant key players consult and forge convergence on a coherent and consistent policy.  They should liaise closely and cooperate to ensure a coordinated approach in the implementation phase.  Bold and innovative approaches were needed, he stressed, calling for the application of “the right mix” of monetary and exchange rates and fiscal and income-policy instruments.  All forms of financing for developing countries should be brought into active play, including the Aid for Trade initiative.  “The world needs updated rules and regulations that best fit the current and future nature of the multilateral trading system,” he said, emphasizing the paramount importance of the World Bank, International Monetary Fund (IMF), World Trade Organization and UNCTAD collaborating and synchronizing their efforts.  Next month’s UNCTAD XIII in Doha and the Rio+20 Conference reflected the timeliness of the current meeting, he said, adding that UNCTAD stood ready to cooperate fully with the Economic and Social Council’s vision and would act as a “bridge” among the relevant agencies and organizations in the financial and socio-economic arenas.

JORGE FAMILIAR CALDERON, Acting Executive Secretary, Development Committee, World Bank, pointed out that the lender had committed nearly $200 billion to developing countries over the last four years and had helped expand the conditional cash-transfer model to more than 40 countries.  However, more needed to be done, he said, noting that the Development Committee had been working on human safety net programmes and focusing on how the World Bank Group as a whole could help leverage the private sector to advance development.  Highlighting the private sector’s importance in job creation, he noted that the sector drove productivity, innovation and the accumulation of wealth, acting as an “engine of economic development”.  The in-progress Modernization Agenda report aimed to make the World Bank Group more flexible, client-focused, open, accountable, and driven by attention to results, he said, adding that the jobs agenda would be a continuing focus during the Development Committee’s October meeting in Tokyo and in the upcoming World Bank Development Report.

JIANHAI LIN, Secretary, International Monetary Fund (IMF), laid out the organization’s four main missions:  financial support for member countries; policy analysis; technical assistance; and governance reforms.  The Fund continued to rise to challenges while adapting to meet the need of countries in the context of an evolving global landscape.  Outlining the ways in which the Fund was working to meet the challenges of a new global economy, he said they included the continued provision of policy advice.  Currently, three member countries were benefitting from financial insurance which helped them combat the risks of the market.  Regarding policy analysis, he said special reports analysed the effects of the global crisis on the world’s top five economies, while other reports provided analysis that was consistent with the growth and balance of the global economy.

Technical assistance was provided to parts of Central America, the Middle East and Africa, he said, adding that in addition to technical centres, IMF had established anti-corruption and anti-money-laundering programmes, and that 54 countries had benefitted from its governance reforms.  He went on to outline the Fund’s focus for the coming year, saying that its Managing Director had presented a detailed action plan that set out an agenda aimed at developing and coordinating solutions.  It proposed, among other measures, multilateral surveillance, a global financial safety net, supporting low-income countries, strengthening international monetary systems, and further governance reform.  IMF was also looking at various innovative aspects of growth and development, he said, noting that it continued to make it a priority to support low-income countries, with a particular focus on financial support and technical assistance.

SHISHIR PRIYADARSHI, Director, Development Division, World Trade Organization, emphasized the importance of trade to development, while stressing the threat of protectionism, against which “we shouldn’t let down our guards”.  He expressed hope that the current deliberations would lead to inter-agency consultations, which in turn would change “the way we look at development in the post-2015 development agenda”.  All development and poverty-alleviation efforts must include sustainable, inclusive and equitable economic growth, he said, underlining, however, that the real post-2015 challenge was not only to insure development but to do so while promoting equal rights and sustaining the environment.  Although international trade had experienced a boost in recent years, particularly in South-South trade, growth was slowing down and debt was rising, he said.  That was bruising economic confidence and presenting a great challenge.

It was natural that in a food crisis countries would ensure that their population was fed first, he said.  And in a global economic crisis, countries wanted to protect themselves from external economic turbulence.  While perhaps understandable from a narrow nationalistic perspective, that was not good from a global international perspective, he cautioned, calling on the international community to build a system of rules that would equip the global trade system to “face up” to the challenges ahead.  “Do not let your guard down,” he said, warning that while trade protectionism was gaining momentum as a reaction to the economic slowdown, it hurt more than it helped.  Nonetheless, trade barriers had come down and growth in trade had helped developing countries, he said, calling for the conclusion of the Doha Round of negotiations.  The international community should also find the right balance between common but differentiated goals, responsibilities, and benefits, which was a critical issue not only for trade, but for any other sector.

Thematic Debate

The Economic and Social Council then held a thematic debate titled “Financing of sustainable development”, which featured the following panellists:  Rachel Kyte, Vice-President, Sustainable Development Network, World Bank; and Marianne Fay, Chief Economist for Sustainable Development and Lead Author, World Bank Green Growth Report.

Ms. KYTE said that since the 1992 United Nations Conference on Environment and Development (“Earth Summit”), the world was “a different place”.  However, despite progress against extreme poverty and in literacy, gender inclusion, health and life expectancy, climate change had added layers of cost and complexity to the development agenda.  “The political will we need for collective action at the international level eludes us, forcing innovation at the regional, national and local levels,” she said.

Rio+20, she continued, should strive for agreement on three main items:  national development strategies consistent with the concepts of green and more inclusive growth; implementation of a global methodology and process for incorporating natural capital; the inclusion of ecosystems in national accounts by 2030; and a discrete set of sustainable development goals by 2030 that should complement the Millennium Development Goals.  What would help was the concept of green growth, focusing efforts at scale and using the public sector to set the playing field for private sector-led development.  Efforts at scale would include investment in green urban infrastructure and water resource and ocean management, she said.

Ms. FAY stressed that while “green growth need not achieve everything overnight”, it was important to focus on what could be done now.  Many challenges remained, including costs and access to capital.  Although growth and social development were generally complementary, the same could not be said about the environment, she said, noting that the last 200 years of economic growth had come at its expense.  Although costly, it was important to view environmental policy as potential for economic growth as environmental pollution was linked with low productivity.

She went on to stress that it was important to get “prices right”, fix markets, and address coordination failures.  Moreover, it was critical to ensure that the poor benefited, although it was likely that the most vulnerable could be hurt during the transition to a green economy.  But there were ways to soften the impact, for example, by replacing fuel subsidies with better-targeted safety nets that would help the poor.  Nonetheless, there would be trade-offs, but they needed to be managed.  In the future, the benefits would outweigh the costs, she emphasized.  Innovation was one way to keep costs in check, she said, admitting that it would be challenging due to lack of political acceptability, governance failures, and social and entrenched behaviours.  However, the real challenge was to act rapidly to avoid “lock-in and irreversibility”.

Interactive Discussion

The representative of Algeria, speaking on behalf of the “Group of 77” developing countries and China, said sustainable development should be a priority in the provision of financial resources, and the related fulfilment of financial commitments, which should not substitute official development assistance (ODA).  Systemic problems facing the global economy must also be resolved, and the voice of developing countries must be heard in the Bretton Woods institutions.  He asked how to leverage private financing, noting that the World Bank was committed to a “green economy” and that there was no specific “bank” for sustainable development.

The Dean of Executive Board of the World Bank said that debt financing and financial constraints would require greater involvement by the private sector.  Social protection and human development efforts were also being pursued to ensure sustainable growth, he said.  One main concern was how existing resources were being deployed and how they could be applied to sustainable development, and he said those questions needed to be tackled by the panellists and the countries concerned.

The representative of Jamaica, speaking on behalf of the Caribbean Community (CARICOM) and associating himself with the Group of 77, pointed out that climate change, as well as food, fuel and financial crises, had left small island developing States more vulnerable.  It was imperative that the international community honour all its commitments, including those relating to financial resources, access to funds and financial mechanisms, assistance or active support to regional organizations, and appropriate harnessing of foreign direct investment.

It was also imperative to take into account the individual aspects of every small island developing State, he said.  The international community and the United Nations must take a systematic approach to small island States.  Such an approach would include a provision of debt relief and seek to alleviate debt, which would help prevent further erosion.  That would allow the transition to a greener economy while also helping people.  While agreeing with the Secretary-General that a transition to a greener economy required major structural changes, he warned, however, that innovative sources of finance should not have negative impacts on small island developing States.

An Executive Director of the World Bank said she had been “struck”, while listening to the panel, to realize how large the Rio+20 agenda was.  There was a lot of common ground, whether with the United Nations, the International Monetary Fund, or the World Bank.  The World Bank was investing billions of dollars, but more reform was needed.  Clearly, financing needs would be so huge that there would be innovative ways to find out how to work with the private sector.  The world certainly would need a new development strategy, she said, hoping it would be all-inclusive.  She asked the panel what was the most important way that the United Nations and international organizations could work together, and what role the Economic and Social Council could play in facilitating that.

The representative of Nepal, speaking on behalf of the Group of Least Developed Countries, said that since international assistance remained critically important in the transition to a green economy, ODA commitments must be fulfilled, and Rio+20 must ensure that financing.  Disappointed in the multilateral trade system, he stressed that an early conclusion to the Doha negotiations would go “a long way” in protecting the interests of developing countries.  It was also critical to strengthen and enhance global partnerships, he said, wondering how the challenges facing least developed countries could be tackled with the support of the international financial institutions, and how the voices of developing countries could be better heard.

The representative of Mexico requested that additional information on financing for sustainable development be provided over the coming days.  He also expressed concern about the insufficiency of public funds, and asked for more additional information on the potential contributions that the private sector could make.  He went on to ask whether the World Bank was undertaking efforts under the three pillars of sustainable development, an issue comprising the major challenge of Rio+20.

The representative of the Fundación Global Democracia y Desarrollo and Global Foundation for Democracy and Development remarked that the economy had changed fundamentally over the last decade.  “Markets are not determined by the principles of supply and demand, but instead by artificial demand created by financial speculators,” she said, adding that financial speculation took unfair advantage of economic, social, political and environmental conditions.  She emphasized the need to promote a new consensus on global commodity-price stability, defined by limits on investor transactions, the establishment of margins higher than the premiums, limits on the volume of transactions by institutional investors, and a ban on financial speculation in food markets.  She also called for an international consensus on reducing price volatility and financial speculation on commodities within the framework of the United Nations.

A representative of business said the private sector represented 90 per cent of global economic growth and looked forward to collaborating with the United Nations.

The representative of France called on the international community to rise to current world challenges.  Sustainable development had three main components — economic, social and environmental — and a green and inclusive economy must not be considered as something costly.  “We need to rethink the global economy,” he stressed, noting that ODA must be complemented by the domestic economy and innovative financing.  One innovative funding method was to implement taxes on airline tickets, he said, emphasizing the importance of reorienting the economy to benefit the poorest people so that they could bear the fruits of their labour.

The representative of Nauru, speaking on behalf of the Alliance of Small Island States (AOSIS), said the global financial architecture must be reformed, pointing out that the heads and senior leadership of the major international financial institutions, particularly the Bretton Woods institutions, should be appointed through open, transparent and merit-based selection processes, with due regard to gender equality as well as geographical and regional representation.  Describing climate-change financing as a major challenge for small island developing States, she said current pledges had fallen short of real needs.  “We are also gravely disappointed that climate financing has favoured mitigation at the expense of adaptation, which is an urgent priority for countries already experiencing negative impacts from climate change,” she stressed.  A “green climate fund” required the urgent investment of funds if it were to deliver on its promises.

An executive director of the World Bank said the benefits of a clean environment were widely recognized, and different countries had different priorities.  Green growth should consider clean technologies and the development of non-commercial energy, he said, adding that technology barriers to sharing should be addressed.

Following the interactive discussion, the panellists took questions.

Ms. FAY, asked about finding a balance between growth and “going green”, said there was a need to balance the three pillars of sustainable development.  She also stressed the critical importance of removing barriers to trade, which would ensure that populations could retain access to technologies.  In terms of financing, the focus must be on leveraging resources and putting them where they were needed most.  Fossil fuels played an important role in the world economy, but the question was how to put technologies in place that would soon replace them.

Ms. KYTE said there were many ways in which to finance sustainable development.  ODA was important and domestic resources, including pension funds and natural resources, would also help.  Foreign direct investment (FDI) also played a significant role, she added.  The long-term view around assets was that they must be deployed and take the world economy’s health into account.  Many private-sector companies had a long-term and sophisticated worldview, either of climate change or of instabilities in the countries where they had invested.  The main challenge was not the money, but its allocation to the appropriate projects, she said, emphasizing that the private sector needed transparency and predictability.

Asked how the World Bank and IMF could work with the United Nations, she said more attention must be paid to how public policy reform could help play a specific role in the private sector.  Responding to CARICOM, she said it was important to shift ways of thinking by calling small island developing States ocean States, because that was where their capital lay.

BAN KI-MOON, Secretary-General of the United Nations, said poverty, discrimination and violence fed each other.  Employment was critical, as were decent jobs that would pay enough for people to survive and thrive, he said.  “Productive jobs do more than protect families from hunger and suffering; they create generations of consumers.”  He called for policies that would support small and medium-sized companies that generated employment and income opportunities.  ODA also remained vital, he said, stressing importance of paying greater attention to the principles of responsible borrowing and lending.  He also touched upon financing sustainable development, saying:  “Now is the moment for decisive action.”

Describing Rio+20 as a “once-in-a-lifetime opportunity” that would allow citizens of the world to agree on sustainable solutions in building the future for the environment, the economy and equity, he said sustainable development meant nutrition for poor children, safe drinking water, community health care, and economic growth without environmental degradation.  Access to technology was also necessary to help make good use of new advances, he said, touching upon the “My Sustainable Energy for All” initiative, which set three clear targets for 2030.  They included universal access to modern energy services, doubling the rate of improvement in energy efficiency, and doubling the share of renewable energy in the global mix.

Although those goals could help turn the tide on climate change, it was necessary to reach the target of $100 billion in public and private funds for mitigation and adaptation, he emphasized.  Declining prospects for economic growth, particularly in developed countries, were threatening the fragile recovery from the world financial and economic crisis, the Secretary-General warned.  At the same time, there was little improvement in global labour markets.  Youth unemployment remained exceptionally high around the world, with nearly 75 million unemployed in 2011.  By investing in people and clean technologies, “we can create jobs and finance sustainable development,” he said.

Thematic Debate 2

The Council held a thematic debate titled “Promoting sustained, inclusive and equitable economic growth, job creation, productive investment and trade”, featuring panellists:  Martin Rama, Director and Lead Author, World Development Report 2013 of the World Bank; and Heiner Flassbeck, Director, Division on Globalization and Development Strategies, United Nations Conference on Trade and Development.

Mr. RAMA provided an overview of the approach taken in the forthcoming report, to be issued in October.  This year, for only the second time in the report’s 33 years, jobs were the issue of focus, he said.  That reflected the current sense of urgency relating to the financial crisis and events such as the Arab Spring.  Employment issues should be addressed in the broader context of development, he said.  He said many of the gains made by developing country had come from reallocating people from low- to high-productivity activities.  The connection between jobs and social cohesion was also a current issue, he said.

The report considered poverty reduction, growth and social cohesion from various perspectives, including gender, he said, adding that the research included extensive consultations with international organizations, worker surveys and links with academia, in addition to a range of case studies, all of which together would provide a framework for analysis and a practical typology of employment challenges worldwide.  In addition, the report would provide a policy agenda that would answer some of the most common questions facing countries, including those relating to obstacles to job reallocation and those addressing what could be done to foster social cohesion.

HEINER FLASSBECK, Director, Division on Globalization and Development Strategies, United Nations Conference on Trade and Development, focused on the inclusion and participation of workers.  With high unemployment making it difficult to have both, he asked when all workers would be in a position to participate in the global economy.  Many workers had not participated in the progress of the global economy over the last 20 to 30 years, he recalled.

The so-called “Arab Spring” had occurred not only because of the lack of jobs but also because there were not enough wages, he noted.  Citizens had begun to question why they were not seeing an increase in wages when their countries were growing at a considerable rate.  He said growth was needed to fight unemployment, while employment cycles were very closely associated with output growth cycles.  “There’s obviously no automatic way out of this crisis,” he said, adding that strong Government intervention was necessary to break the cycle of stagnation.

In the ensuing discussion, the representative of Algeria, speaking on behalf of the Group of 77 and China, said sustained poverty reduction required self-sustained growth and diversification, and should be based on multiple sectors.  However, many developing countries were trapped in a commodity/raw material cycle, which failed to generate the desired income levels.  In the context of jobs, he asked the panellists to elaborate on “job destruction” and globalization, and on the number of jobs that disappeared each year.  He also asked them to comment on the concept of “green jobs”, notably whether it existed and its definition and description within the context of “green” growth.

The representative of Bangladesh asked whether the technology choices made in low-income countries were under consideration in the current debate.  With greater demand for jobs, existing training policies focused on specific skills, which often meant that every five or six years, trainees needed to adapt to new circumstances.  The attitude of foreign investors required that wages and interests remain low, but studies showed otherwise, he said.  As for employability, he cited a study which had found that religious-school graduates found jobs more often than those leaving non-religious schools.  However, the jobs in the former’s case were in the non-productive sector, he said, asking the panellists to comment on those trends.

The representative of Jordan, associating herself with the Group of 77 and China, said further efforts were needed to coordinate policies that would provide stability for all.  That could be made possible by ensuring investment in infrastructure and social safety nets.  The vital role of the Economic and Social Council would be focal point and forum for the coordination and coherence of development and trade policies, she said.

The Executive Director of the International Monetary Fund said the body was focused on crisis management as well as labour-related growth.  Financial and economic stability were important to growth, and the IMF was focusing on stemming volatility while ensuring debt sustainability and reducing vulnerability.  He said that while the panel had mentioned the crucial role of labour and structural reforms, it was also important to target the inefficiencies of the labour market.

An executive director of the World Bank said today’s discussions represented the most pressing international issues, not only for many developing countries but even many developed ones.  It was critical to include the informal sector in the discussions, she said, adding that a multi-sector approach to growth and sustainable development would be best.  Looking ahead, she said the most important part of the World Bank’s World Development Report:  2013 was its policy agenda and the recommendations, adding that it was important to focus on sectors that were more conducive to the creation of jobs.

The representative of the European Union delegation said that without fundamental changes in the labour market, finding jobs for youth would be an increasing challenge.  Private-sector involvement was key to turning growth models “green” in such a manner as to maintain transparency and predictability.  Besides international organizations, other stakeholders must do more to improve social services, such as health and education, he said.  On trade, the Union had provided significant investments to help developing countries improve domestic business environments and take advantage of trade opportunities, he said, requesting clarification on jobs that were more development-friendly than others.

The representative of the NGO Committee on Financing for Development, speaking on behalf of several groups, said the current situation reflected the third stage of the global crisis.  Lessons should be learned from the responses of 2008 and 2009, with their weak injections of stimulus funds into banks but little for developing countries, in addition to the austerity measures, particularly in Europe, that had begun in 2010 and continued to the present.  Many young people remained unemployed, she noted, adding that the Arab Spring and the autumn of Occupy Wall Street had brought about a “winter of discontent”.  Targeted stimulus policies should be implemented, and include public works programmes, wage subsidies and job-creation incentives for the private sector.

The representative of business said it was important to help at-risk youth, adding that his company worked to help underprivileged young people and noting that the consequent return on that investment was “large”.  For example, for every dollar the company invested, society enjoyed $25, he said, pointing out that the company had five locations around the world, including offices in Poland and India.  Stressing the role of the private sector in growth and development, he said there were important advantages.  “We have insights to the inner workings of the market,” he said, adding that the private sector’s well-being was vital to economic and job growth.

The representative of the Office of the United Nations High Commissioner for Human Rights (OHCHR) said human rights had not been sufficiently addressed, although a number of institutions in the room had placed human rights policy coherence at the forefront.  Asking why the private sector was now so keen on human rights, he answered his own question by pointing out that the risk to their reputation and investments of acting otherwise could potentially affect their businesses.  At the same time, “human rights is good for business”, he said.  Respect for human rights directly and indirectly promoted sustainable and inclusive growth.  “We can no longer allow the greatest burden of the financial crisis to fall upon the poorest and most vulnerable,” he emphasized.

The representative of Nepal said productive capacity-building was a focus among least developed countries that had grown in recent years despite limited reduction of poverty.  Young people comprised 60 per cent of the population of least developed countries, he said, calling for rapid and intensive growth, with more investment in productive sectors and the private sector.  Vocational education and training should be enhanced and linked with the private sector, he said.  Trade must also remain more inclusive with a view to stimulating investment in the productive sector and promoting job creation.

The representative of Brazil said it was essential to find quick and effective solutions, with priority going to resolving the sovereign debt crisis.  Developed countries should put short- and long-term measures in place to address related areas.  Damaging exchange manipulation caused by excessively expansive monetary policies should be stopped, he said, adding that fiscal and monetary policies should be subjected to review and address negative elements such as protectionism.  The international community must renew its commitment to the Doha negotiations, he emphasized, stressing also the need for banking regulations.

An executive director of the World Bank said the initial potential of short-term measures seemed to have been exhausted, and therefore there was now a need for longer-term job creation.  Small and medium-sized enterprises provided the bulk of jobs, and hence, policies should treat them favourably.  There was no “one-size-fits-all” approach, he said.  The most promising way forward was to focus on regulations that would lower the barriers for business owners to operate their enterprises.  Since wage employment had been the economic driving force of the last 200 years, it was no coincidence that developing countries had enjoyed vast gains in the last fifty years.  All those issues now needed to be the focus of donors and other stakeholders.

The representative of China said that growing protectionism and the worsening food and fuel crises posed great challenges to the global economy, hampering the progress towards realizing the Millennium Development Goals as scheduled.  It was important to look at all economic sectors, he said, noting that while small and medium-size enterprises provided many jobs, the multiple global crises had left them facing challenges.  He urged the panel to discuss further challenges confronting small and medium-size enterprises.

The representative of Belarus sought the panel’s opinion about links between some national education systems and job markets, asking whether that link was important.

Mr. FAMILIAR said it was not possible to create jobs without first dealing with the realities on the ground.  “Unfortunately, I don’t have answers, but more questions,” he added.  There could be no “one-size-fits-all” prescription to create jobs.  Querying whether the informal sector affected job growth., he wondered “Do we really need jobs that are created to be equitable?”  “At this time, isn’t it just important to create jobs?”  What role did equality play?  If poor countries had a comparative advantage on agriculture but a disadvantage in selling to developed countries, did they really stand a chance?

A representative of the Third World Network said the structural crisis in least developed countries was due in part to the misalignment of employment policies.  Workers remained largely trapped by low wages that would not allow them to rise above the poverty line, she noted.  Several policy areas would engender changes, in line with the Istanbul Conference, including the macroeconomic framework.  Monetary and fiscal policies could mobilize resources and deficit financing, she said, noting other areas that could have similar effects, including minimum-wage legislation, and labour and social policies.

A representative of the International Chamber of Commerce said trade finance was needed most to support an effective private sector.  In low-income countries, trade financing was critical, he said, adding that when trade-finance markets became less liquid, developing countries, especially least developed ones, felt the greatest impact.  There was a strong relationship between a well-functioning domestic sector and the availability of trade financing, he said, adding that some 80 per cent of global trade flows required some form of trade financing.

The representative of Norway, emphasizing the essential importance of including women in the work force, asked panellists for details of the World Bank’s findings on that issue.  She said the creation of policies and institutions must be in line with international labour standards, but greater coherence was necessary.  How could that goal best be achieved?

The representative of Germany asked about setting new development goals for the post-2015 world, asking whether, in such a long perspective, it was really wages that mattered or a multi-sector approach that was needed.

An executive director of the World Bank said the world was dealing with economic issues that touched millions of people because not enough attention had been paid in the decades leading up to the economic crisis.  The sluggish growth in North America, Europe’s debt crisis and slowing growth in Asia were under discussion but no one was talking about the worsening inequality among people, he noted.  Could enough jobs yielding decent incomes be created? It would be impossible unless the global community dealt with the inequality question immediately, he cautioned.  While the private sector was important, developing countries were in debt and in need of infrastructure, he pointed out.  Governments must play a more intense role, he stressed, adding that the Government and private sector must engage so that jobs could be created.

Mr. FLASSBECK, responding to some of the questions, said wages must be balanced at any level.  If the macroeconomic rates, such as interest, were incorrect, many other elements would become irrelevant.  Prohibitive interest rates in Africa would become a barrier to economic growth.  The wage rate must grow in line with productivity, otherwise there would be no sustained growth, he said.  On trade, he said there were shocks and financial crises, but rising domestic demands was a real marker of growth.

Regarding “green” growth, he again emphasized the need to use a balance of prices.  If the fossil fuel prices were left to the financial market, as was the case with oil, it would be useless to talk about the greening of growth, he pointed out.  Regarding the topic of keeping employment and growth on track, he said the right conditions were needed, including balanced wages.  Countries such as China and India had got the macroeconomic prices right, he said, pointing to the growth seen in their respective economies over the last 20 years.

There would always be destruction of jobs, but a country must be moving towards a point where job creation was larger than job destruction, he continued.  As for the point raised about cutting wages in times of crisis, he said it was wrong to believe that cuts could solve a crisis.  Regarding the need or otherwise for policies covering small and medium-sized enterprises, he said before that was considered, opportunities must be created to ensure conditions conducive to the development of those types of businesses.

Mr. RAMA, answering a question about how to define employment, said there were many grey areas.  For example, how did one classify caretaking, household chores and even youth idleness, defined as youth neither in school nor work for whom “something is brewing”.  In response to a question about whether job creation was the most important thing, he said creating jobs would not always be the objective, but it would be an important objective in ensuring enough jobs.  There was a choice in today’s economy as to whether to support large or small companies, large-scale agriculture or small-scale production.  In some cases small-scale production could be more productive, he said, emphasizing the role of small and medium-sized enterprises in producing jobs.

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