Sixty-seventh General Assembly

Second Committee

12^th & 13^th Meetings (AM & PM)

Comprehensive Approach of Monterrey Consensus, Doha Declaration Still Most

 

Effective in Addressing Financing for Development, Second Committee Told

 

Members Hold Interactive Dialogue on ‘Project LINK Global Economic Outlook’

The comprehensive approach of the Monterrey Consensus and the Doha Declaration remained the best way to effectively address financing for development, the Second Committee (Economic and Financial) heard today.

As the Committee took up that subject this afternoon, Brazil’s representative reaffirmed his country’s commitment to the financing for development process, saying it could still lead to the attainment of the Millennium Development Goals by 2015, as long as significant additional international financial resources were mobilized in a stable and predictable manner, particularly for the poorest countries.

He expressed concerns over the follow-up mechanisms involved in the financing for development follow-up process, pointing to improvements made to the multifaceted mechanism adopted by the Economic and Social Council and calling for the establishment of a functional commission on financing for development as a subsidiary body of the Council which would help to ensure the implementation of commitments.

Algeria’s representative, speaking for the “Group of 77” developing countries and China, underlined the central role of the United Nations in the financing for development follow-up process, urging the Organization to maintain that role in order to ensure continuity and dynamism, while reaffirming the need to engage all stakeholders in the follow-up to and implementation of the commitments made in Monterrey and Doha.  It was up to the world body to bridge the gap between policymaking and implementing commitments on financing for development, he said.

He described the overall decline in official development assistance (ODA) commitments from 16 Development Assistance Committee (DAC) donors as worrying, saying, that although innovative financing mechanisms could make a positive contribution, they should neither substitute nor negatively affect the level of traditional development financing, including ODA.  It was important that developed countries scale up their aid commitments to meet various internationally agreed targets, he said, calling for clear and transparent timetables to be drawn up within national budget-allocation processes to ensure that.

Like many other delegates, Benin’s representative called for full and timely fulfilment of ODA commitments.  Speaking for the Group of Least Developed Countries, he emphasized the vulnerability of those countries, pointing out that they were heavily dependent on ODA and international financial institutions, including the World Bank and the International Monetary Fund (IMF), which should ensure that the new facilities created in the wake of the multiple global crises were inclusive of all, including least developed countries.  He called for alignment of the international finance architecture with the special needs of least developed countries, in line with the Istanbul Programme of Action, and with greater involvement by developing countries, including least developed countries, in bodies charged with setting international norms and standards on financial regulation and supervision.

Regarding international trade, Malaysia’s representative reaffirmed his country’s commitment to upholding a universal, rules-based, open, non-discriminatory and equitable multilateral trading system that could contribute to global growth and sustainable development.  Malaysia reiterated calls resistance for all countries to resist tendencies to turn inwards in times of economic difficulties.  He urged the World Trade Organization and other relevant bodies, including United Nations Conference on Trade and Development (UNCTAD), to continue monitoring protectionist policies and assessing their impact on developing countries while urging developed countries to exercise the necessary flexibility and political will to break the impasse in the Doha trade negotiations.

Norway’s representative stressed the positive impact that innovative financing sources could have on development when used as a supplement to traditional ODA.  The Norwegian Government supported a proposed tax on financial transactions as well as the proposed future currency levy, he said.  Citing progress in addressing the debt burdens of developing countries, he called for a fairer, more predictable and comprehensive approach, saying the discussion of a new international debt workout mechanism was an example of progress in that regard.  Norway had signed a three-year programme with UNCTAD to gather stakeholders and present a proposal for the shape of such a mechanism, he added.

Looking to the post-2015 development agenda, the representative of the Republic of Korea called for the mobilization of a wide range of sources of development financing, citing the useful building blocks contained in the Busan Global Partnership for Effective Development Cooperation and calling on Member States to give due consideration to the Busan elements during their deliberations on development financing.  Domestic resources were particularly important for long-term sustainable development, he noted, calling for strengthened cooperation to help developing countries broaden their tax bases, enhanced financial inclusion of vulnerable population groups and greater attention to issues relating to illicit capital flows and tax havens.

India’s representative said South-South cooperation had assumed greater salience in development partnerships and should be allowed to grow within its own space and its own principles, going on to reiterate that it could not, however, replace North-South Cooperation.  He said his country had used its flagship development cooperation platform, the Indian Technical and Economic Cooperation programme to extend capacity-building and technical support to 161 developing countries with around 7,400 vocational training slots.

The upcoming Review Conference on Financing for Development was of interest to a number of delegates, and the representative of the Russian Federation said he looked forward to dialogue on that question.  The final decision on the matter should be taken no later than 2013 so as to allow discussions to continue after the present session of the General Assembly, he emphasized.

Introducing two reports for the Committee’s consideration were, respectively, the Assistant Secretary-General for Economic Development and the Director of the Financing for Development Office in the Department of Economic and Social Affairs.

Others speakers today were representatives of the Bahamas (speaking for the Caribbean Community), Indonesia (for the Association of Southeast Asian Nations), Chile (for the Community of Latin American and Caribbean States), Libya, United Arab Emirates, Bangladesh, Belarus, Singapore, Cuba, China, France and Nigeria.

Earlier today, the Committee convened a joint meeting with the Economic and Social Council, holding an interactive discussion on the “Project LINK Global Economic Outlook”.  Co-chaired by George Talbot ( Guyana), Chair of the Second Committee and Luis-Alfonso De Alba, Vice-President of the Economic and Social Council, it featured a lead presenter, two discussants and an interactive dialogue.

The Committee will meet again at 10 a.m. on Tuesday, 23 October, to continue consideration of financing for development.

Background

Meeting this morning to take up financing for development, the Second Committee (Economic and Financial) had before it several relevant reports of the Secretary-General.

Among them was the report of the Secretary-General on Modalities of the financing for development follow-up process (document A/67/353) dated 31 August 2012, which summarizes key intergovernmental mandates on financing for development follow-up processes and describes their institutional modalities.  It also details the continuing incremental evolution of existing modalities and the creation of a new intergovernmental body and methods to ensure the coordination and coherence with the intergovernmental process on sustainable development financing.

According to the report, continuing incremental evolution of those existing modalities is unlikely to reverse the sharp loss of political momentum witnessed in the last decade, as demonstrated by declining participation by both Member States and institutional stakeholders in major intergovernmental meetings on the financing for development process.  It notes that no action has been taken to create the dynamic, efficient intergovernmental body that would be needed to strengthen financing for development while monitoring and implementing the Monterrey Consensus and the Doha Declaration.

The report also refers to the outcome document of the recent Rio+20 United Nations Conference on Sustainable Development, in which Member States agreed that a separate discussion was needed on options for an effective strategy for financing sustainable development.  It calls on the intergovernmental expert committee, to be established for the purpose of holding that discussion, to consider how the options it may propose might achieve the stated intent of Member States, which are to explore ways to strengthen the financing for development follow-up process while ensuring that it is coherent and coordinated and that it avoids duplication of effort.

Also before the Committee was the report of the Secretary-General on follow-up to and implementation of the Monterrey Consensus and Doha Declaration on Financing for Development (document A/67/339).  Dated 29 August 2012, it assesses the state of implementation of the Monterrey Consensus and the Doha Declaration on Financing for Development, and outlines recent developments in mobilizing domestic and international financial resources for development, including foreign direct investment (FDI) and other private flows.  It also discusses international trade as an engine of development, increasing international financial and technical cooperation for development, external debt, and addressing systemic issues such as enhancing the coherence and consistency of the international monetary, financial and trading systems in support of development.

The Committee also had before it the summary by the President of the Economic and Social Council of the special high-level meeting of the Council with the Bretton Woods institutions, the World Trade Organization and the United Nations Conference on Trade and Development (New York, 12 and 13 March 2012).  Dated 20 April 2012, the summary (document A/67/81-E/2012/62) describes the proceedings of the meeting, stating that the President of the Economic and Social Council suggested establishing a small, joint working group to explore ways for the Council to collaborate and cooperate better with major institutional stakeholders in the financing for development follow-up process, particularly in the area of financing for sustainable development.

Introduction of Reports

SHAMSHAD AKHTAR, Assistant Secretary-General for Economic Development, Department of Economic and Social Affairs, introduced the Secretary-General’s report “Follow-up to the Monterrey Consensus and the Doha Declaration on Financing for Development”, pointing out several of the challenges affecting the process and citing the sections outlining the latest developments in that regard.

ALEXANDER TREPELKOV, Director, Financing for Development Office, Department of Economic and Social Affairs, introduced the report “Modalities of the financing for development follow-up process” and outlined the three options for strengthening follow-up, one of which was the continued incremental evolution.  The second was establishing an intergovernmental body charged with strengthening the process, and the third entailed measures to ensure coordination and coherence with the intergovernmental process on sustainable development financing, which would facilitate the exploration of synergies and linkages on defining the Sustainable Development Goals and the United Nations post-2015 development agenda.

Statements

MOURAD BENMEHIDI (Algeria), speaking on behalf of the Group of 77 developing countries and China, said he was concerned about a global decrease in core bilateral projects and programmes, as well as the overall decline in ODA commitments by 16 DAC donors.  Stressing the importance of establishing an appropriate follow-up mechanism within the United Nations system to bridge the gap between policymaking and implementing commitments on financing for development, he said he recognized the positive contribution of innovative financing mechanisms, but emphasized that they should neither substitute nor negatively affect the level of traditional development financing, including ODA.  It was important that developed countries scale up their aid commitments to meet various internationally agreed targets he said, calling for clear and transparent timetables to be drawn up within national budget-allocation processes.  In addition, a fair and efficient debt-restructuring mechanism was needed to help developing countries pursue development.

Given the current threatening systemic problems, reform of the global financial architecture remained “unfinished business”, he said, calling for an intensification of work in that area.  The United Nations was central to the financing for development follow-up process, he said, calling on the Organization to maintain that role in order to ensure continuity and dynamism in the process, while reaffirming the need to engage all stakeholders in the follow-up to and implementation of the commitments made in Monterrey and Doha.  Welcoming the substantive discussions held during recent high-level dialogues on financing for development, he emphasized that they should be an integral and mutually reinforcing part of the financing for development follow-up process.  He also welcomed the establishment of a joint group comprising the Bureau of the Economic and Social Council and representatives from UNCTAD, the World Trade Organization and Bretton Woods institutions, saying that a final decision on holding an international Conference on financing for development in 2013 should be made as soon as possible.

PAULETTE BETHEL (Bahamas), speaking on behalf of the Caribbean Community (CARICOM) and associating herself with the Group of 77 and China, said growth was still low and unsteady in most cases as adverse economic cycles in the developed world had led to reduced tourism, declining remittances and falling FDI flows to the region.  Many CARICOM countries remained burdened by high unemployment rates and weak financial sector indicators.  Regional leaders were committed to exploring innovative thinking and action towards expanded economic activity, including through intra-regional trade and collective engagement with global markets.

She said it was imperative, however, that such efforts were duly complemented by a global response to existing and emerging international economic and financial challenges rooted in a genuine and dynamic partnership among developed and developing countries, and with the multilateral financial institutions.  Urging development partners to fulfil their commitments on allocating 0.7 per cent of their gross national income to ODA, she reiterated CARICOM’s call for a more nuanced approach to financing from the multilateral development banks so that countries could enhance access to such financing, including debt-relief initiatives.  That would help CARICOM countries rebound from the international financial and economic crisis, given their limited access to global capital markets.

Expressing concern that there was insufficient international recognition of the needs and concerns of small, open, vulnerable and highly indebted economies like those of CARICOM, she noted that they were classified as middle- and even high-income countries by virtue of their gross domestic product (GDP) per capita.  Even in the present time of crisis, “we continue to be overlooked by the international community”, on the presumption that they did not require international assistance, she said.  A multilateral trading system must be able to address emerging issues of critical importance to small vulnerable economies, which were not necessarily a part of the Doha Agenda, including the rising and excessive volatility of commodity prices, she said, reaffirming also the importance of convening a follow-up conference on financing for development in 2013 that would play a key role in ensuring the continuity and dynamism of that process.  It would also reinvigorate the engagement of all stakeholders, including the United Nations system, the World Bank, the IMF, the World Trade Organization and civil society.

YUSRA KHAN (Indonesia), speaking on behalf of the Association of Southeast Asian Nations (ASEAN) and associating himself with the Group of 77 and China, said the rapid progress made by ASEAN member countries towards fulfilling the Millennium Development Goals had led to the adoption of additional goals specific to their own particular circumstances within their development policies.  Despite progress, 20 per cent of ASEAN’s combined population lived in poverty, he noted, saying that, as such, he was extremely concerned about the state of the global economy, which had serious repercussions for resource mobilization.  Unresolved systemic problems threatened another global crisis, he warned, adding that the uncertainty was straining development efforts, though much hope was still pinned on international cooperation for development.  ASEAN had taken concrete steps to deliver on the commitments it made to deepen integration of the regional market under the Roadmap for Monetary and Financial Integration of ASEAN, he said.

Strengthening of financing for development required better international financial regulation, monitoring and supervision, he said.  While continuing to call for the fulfilment of ODA commitments and targets, “thinking outside the box” about innovative financing mechanisms was also essential, as was an improved international trading system, he stressed.  It was essential to resist protectionist impulses and conclude a development-focused Doha Round as soon as possible, and to stimulate South-South trade, he said, adding a call for realizing the follow-up to the Monterey Consensus.  Furthermore, follow-up to Rio+20 offered the chance to expedite global governance to help achieve sustainable development, he said.  ASEAN looked forward to successes in deliberations on the establishment of the high-level political forum for sustainable development as a reflection of global governance reform to strengthen the development arm of the United Nations.

OCTAVIO ERRAZURIZ (Chile), speaking on behalf of the Community of Latin American and Caribbean States (CELAC), reiterated the group’s concerns over the negative implications of the economic and financial crisis on development, and its damaging impact on the flow of direct investment, external debt and international trade.  Warning that the global financial and economic crisis was not over, he said the systemic problems facing the global economy must be resolved, including through full reform of the global financial system and architecture.  CELAC was deeply worried about the additional negative impacts on development, which would pose a serious threat to developing countries in the years to come.  He went on to call for predictable and timely disbursement of multilateral resources and ODA in order to end the ongoing pro-cyclical conditionality that curtailed the financial options available to developing countries.  That needlessly exacerbated financial, economic and development challenges, he said.

It was extremely important to ensure there was enough policy and fiscal space to enable developing countries to design and implement appropriate development policies and strategies, he said.  The effects of the world financial crisis, particularly the European debt crisis, could significantly affect the outlook for debt sustainability in many developing countries and emerging economies, he said, adding in that regard, that the absence of an efficient and fair debt-restructuring mechanism made resolving debt problems an arduous and costly process.  Reiterating the central role played by the United Nations as focal point for the financing for development follow-up process, he reaffirmed the need to further intensify the engagement of all stakeholders, including the United Nations system, the World Bank, IMF and the World Trade Organization, in the follow-up to and implementation of the commitments made at Monterrey and Doha.  The Economic and Social Council should strengthen its role in promoting the implementation of and follow-up to the Monterrey Consensus and the Doha Declaration, as well as other major United Nations conferences and summits.

JEAN-FRANCIS ZINSOU ( Benin), speaking on behalf of the Group of Least Developed Countries, said the gap between rich and poor had widened, with the least developed and vulnerable countries increasingly pushed to the margins.  The emergence of multiple crises and the adverse effects of the uneven impact of climate change had reversed the gains made over the years, continuing to threaten the lives of millions of people in poor and vulnerable countries.  It was obvious that the decline of ODA in 2011, to a level almost 9 per cent lower than that for 2010, would have an adverse impact on development efforts aimed at achieving the Millennium Goals as well as the objectives goals set forth in the Istanbul Programme of Action.

He called for the full and timely fulfilment of all ODA commitments and an increase in the level of commitment, taking into account least developed countries’ structural constraints and high degree of vulnerability.  The economic and financial crises should not be used as a pretext to slow down the delivery of agreed commitments, especially because of the heavy dependence of least developed countries on ODA for development expenditure.  International financial institutions, the World Bank and IMF, in particular, should ensure that the new facilities created in the wake of the multiple global crises were inclusive of all, including least developed countries.

In line with the Istanbul Programme of Action, the international finance architecture should be supportive of and responsive to the special needs and priorities of least developed countries, he continued.  The United Nations should play an active role in strengthening effective coordination and operation of the international financial system and architecture.  The Group of Least Developed Countries called for greater involvement by developing countries, including least developed countries, in bodies charged with setting international norms and standards on financial regulation and supervision, including the Financial Stability Board and the Basel Committee on Banking Supervision.  It was important to ensure maximum stability in exchange-rate systems, limit excessive short-terms capital flows and curb illicit financial transactions, he said.

Mr. VASILIEV ( Russian Federation) said he expected the Committee to adopt a balanced consensus draft resolution on follow-up to financing for development.  The approaches agreed by the General Assembly needed to be taken into account, he said.  In the decisions of the major socioeconomic forums of the United Nations, it had been agreed that investment flows were vital to development, he said, adding a call for greater attention to issues of increasing investment cooperation.  In conditions of global instability, implementation of the post-Monterey agenda was of great importance, he said, stressing the need to stimulate capital investment in long-term transnational projects.

In that regard, the free movement of investments could become a catalyst for economic growth and it was important to make use of that.  It was important to see the harmonization and coordination of United Nations efforts in the follow-up to Monterrey and Doha, while avoiding the duplication of agreements made during the Rio+20 Conference.  The Russian Federation also looked forward to dialogue on the question of the Review Conference on Financing for Development, he said, emphasizing that the final decision on the matter should be taken no later than 2013 so as to allow discussions to continue after the present session of the General Assembly.

LEE YONGSOO ( Republic of Korea) said efforts to mobilize resources for development had been hampered by the global economic uncertainty, with ODA having declined in 2011 for the first time since 1997, and prolonged recessions and financial instability may further squeeze development financing.  In Rio, the international community had renewed its commitment to sustainable development, and was now gearing up the preparatory process for the post-2015 development agenda.  In order to move forward beyond 2015, and given the magnitude of the financing requirements needed to advance sustainable development and the post-2015 development agenda, resources must be mobilized from a wide range of public, private and mixed sources.  He called on all pledging countries to fulfil their ODA commitments as least developed countries relied heavily on it.  He also called for efforts to engage a diverse range of development actors while enhancing South-South cooperation.

The Busan Global Partnership for Effective Development Cooperation provided useful building blocks, he said, adding that it was important to give due consideration to the Busan elements during deliberations on development financing.  Domestic resources were particularly important for long-term sustainable development, he noted, calling for strengthening cooperation to help developing countries broaden their tax bases, enhance the financial inclusion of vulnerable population groups and address issues relating to illicit capital flows and tax havens.  It was also important to manage volatile short-term capital flows, while strengthening international cooperation to foster a positive environment in developing countries, and attract green-field direct investment.  It was also important to explore the potential of green economy as a powerful instrument for opening new markets and generating employment.

ELMAHDI S. ELMAJERBI (Libya), associating himself with the Group of 77 and China, said it was important that the economic and financial crisis not be used as a pretext not to fulfil ODA commitments, emphasizing that aid flows should be in line with the specific needs of recipient countries and not create new debt.  Capital flows should expand as a potential source of flexible, effective and very low-cost development.  It was important for the international community to surmount the effects of the international financial crisis, he said, underlining the great importance of the Monterrey and Doha agreements in the economic and financial realms.  The United Nations, alongside the Bretton Woods institutions, should send a very clear signal on policy coherence in addressing the crisis in an appropriate time framework, while the international financial and trade systems supported development and pursued reform of the system.  There remained much to do and there was an urgent need to encourage the international economic system to avoid instability and excessive risk while ensuring predicable capital flows.  There was also a clear need to implement the Monterey and Doha agreements and to ensure the existence of integrated international mechanisms.

GEIR O. PEDERSEN ( Norway) said that discussing financing for development was also a discussion about how to guarantee a more fair and equitable distribution of resources.  Stressing the importance of ODA, he underlined his country’s commitment to allocating 1 per cent of GDP to official assistance, saying other sources of finance, such as remittances, were playing a greater role, while domestic resource mobilization was also growing in importance.  The United Nations system needed to use its normative base and capacity-building functions to help developing countries broaden their tax bases and fight corruption and illicit capital outflows, he said, adding that doing so would release considerable funds for development.  Addressing such issues was “ultimately a question of political will,” he noted.  He said innovative financing sources could make a positive contribution in mobilizing additional resources for development, and the Norwegian Government supported such ideas, including a proposed tax on financial transactions and the proposed future currency levy.  Citing progress in addressing the debt burdens of developing countries, he called for a fairer, more predictable and comprehensive approach, saying the discussion of a new international debt workout mechanism was an example of progress in that regard.  He said Norway had signed a three-year programme with UNCTAD to gather stakeholders and present a proposal for the shape of such a mechanism, he added.

Mr. ALMANSOORI (United Arab Emirates), associating himself with the Group of 77 and China, emphasized the need for international cooperation to overcome economic and political difficulties around the globe.  The Rio+20 Conference had emphasised sustainable development and the diversification of funding for development, calling on the General Assembly to oversee the financing of sustainable development and ensure the implementation of the outcomes of the Busan Conference on Aid Effectiveness.

He said his country was pursuing efforts with the international community to promote financing for development both at the international level and locally, and was supporting a national development strategy to diversify the economy and ensure growth despite the financial crisis.  Its achievements included creating five million jobs and progress in the fight against corruption, which was encouraging development across the region.  The United Arab Emirates was leading such efforts across the Middle East and North Africa, he said.

On the international level, he said his country contributed 0.22 per cent of its GDP as unconditional, untied assistance, and the Government continued to contribute funds from other sectors to countries in Africa.  The United Arab Emirates had partnered locally with Yemen, Pakistan and Afghanistan on development, and was working to combat piracy in Somalia.  It was an essential investor in European countries and had applied its knowledge of renewable resources and food security worldwide.

ANANTH KUMAR (India), associating himself with the Group of 77 and China, said he remained deeply concerned that ODA had declined by almost 3 per cent to $133.5 billion in 2011, the first such drop in global assistance since 1997.  Aid to least developed countries had fallen by 9 per cent, he added.  High unemployment, soaring food and energy prices and dwindling tax revenues continued to plague most developing countries.  In such an environment, raising domestic financial resources for development had become an arduous task, beyond the means of most developing countries.  Progressive taxation and policies of financial inclusion remained equally crucial to addressing development challenges, he stressed.

In order to maximize development results, FDI must form productive linkages with the wider local economy and be consistent with the broader objectives of sustainable development, he continued.  The crucial role of international trade should not be undermined, he stressed, adding that developing countries had long relied on exports to boost their economies.  Concerted efforts to achieve debt relief and sustainability were of utmost importance.  South-South cooperation had assumed greater salience in development partnerships and should be allowed to grow within its own space and within its own principles, he said, emphasizing that it could not be a substitute for North-South cooperation.

He said that under his country’s flagship development cooperation platform, the Indian Technical and Economic Cooperation programme, India was extending capacity-building and technical support to 161 developing countries with about 7,400 vocational training slots.  On another note, he said he did not subscribe to the theory, believed by some, that remittances could be compared or equated with ODA.  Furthermore, technology transfer was crucial to enhancing capacity in developing countries.  Welcoming the important steps taken by the IMF and the World Bank to enhance their governance structures and increase the voting power of developing countries, he those reforms must be implemented “most urgently”.

ABULKALAM ABDUL MOMEN (Bangladesh), associating himself with the Group of 77, and the Group of Least Developed Countries, said the poor were living in a world ravaged by mutually exacerbating global crises, whose impact transcended the geopolitical boundary.  In most cases, the tumult arising from the crisis was so grave that many of the least developed countries “completely succumbed to the mercy of the movers and shakers” of the world economy.  The crises were projected to have far-reaching negative effects on development programmes, affecting production and export bases owing to the paucity of credit as well as to social and political instability.

However, the crisis had “opened our eyes” to the need for a new global financial and economic architecture, proving the necessity of a new body with a wider mandate, he said.  A re-examination of the “Bretton Woods twins” as well as the World Trade organizations was essential from a holistic as well as a practical point of view, he said.  With regard to debt servicing and new loans, global systemic problems with the current financial architecture demonstrated the latter’s utter failure, and the contemporary credit rating system was also dubious, often accused of being politicized.  He reiterated demands to implement ODA commitments, in particular the 0.2 per cent of gross national income pledged to least developed countries which more than a decade ago in Monterrey.

LEONARDO DE ALMEIDA CARNEIRO ENGE (Brazil), associating himself with the Group of 77 and CELAC, reaffirmed his country’s commitment to the financing for development process and reiterated that a comprehensive approach to the Monterrey Consensus and the Doha Declaration was the best way effectively to address that issue.  The Millennium Development Goals could be achieved by 2015, provided that the international community mobilized significant additional financial resources in a stable and predictable manner, particularly to the poorest countries, he said.

Recognizing that ODA played a fundamental role in supplementing domestic resource mobilization and catalysing private investment, including FDI, he called on developed partners fully to implement their commitments.  Brazil, remained concerned about the intergovernmental follow-up mechanism to the financing for development process, recognizing that the multifaceted mechanism adopted by the Economic and Social Council had achieved important improvements.  He called for the establishment of a functional commission on financing for development as a subsidiary body of the Economic and Social Council that would go a long way towards ensuring the implementation of commitments.

VADIM PISAREVICH ( Belarus) said financing for development was key for the Millennium Development Goals as it helped to provide countries with the necessary means to achieve their targets.  In addition, it aimed to provide additional assistance to targets not even mentioned in the Millennium Development Goals.  However, the global financial and economic crises, including growing inequality, unemployment and protectionist trade measures, had complicated the prospects for financing for development.

The global crisis should not be used as an excuse not to fulfil ODA commitments, he stressed, adding that complex conditions should not be used to ignore the specific needs of specific countries, such as middle-income countries, he said.  It was vital to strengthen global economic management for true inclusiveness and fairness, he continued.  Belarus had always taken the positive view that the United Nations should take the central role in international financing for developing.  Concerning the Rio+20 Conference, he said it was important to create an assessment of the need for sustainable development which should also become the basis for the 2015 development agenda.

MOHAMMED NAJEED ABDULLAH (Malaysia), associating himself with the Group of 77 and ASEAN, said his country had undertaken new initiatives to diversify its trading partners, engaging especially in the export trade with countries in East Asia.  Malaysia was concerned about the volatility of international trade since the onset of the financial and economic crisis, as international trade growth had decreased to 6.6 per cent in 2011 compared to 13.1 in 2010.  Malaysia reaffirmed its commitment to upholding a universal, rules-based, open, non-discriminatory and equitable multilateral trading system that could contribute to global growth and sustainable development, he said.

He reiterated his call for all countries to resist the tendency to turn inward in times of economic difficulty, urging the World Trade Organization and other relevant bodies, including UNCTAD, to continue monitoring protectionist policies and to assess their impact on developing countries.  He also urged developed countries to exercise the necessary flexibility and show the political will to break the impasse in the Doha negotiations.  Aid-for-Trade measures should only complement, but not replace, the Doha Round or any other trade negotiations outcome, he stressed.  Malaysia supported efforts to identify new and innovative financing sources for development on a stable, predictable and voluntary basis.

THAMARAI MANIAM (Singapore), associating himself with the Group of 77 and China, emphasized the significance of the Monterrey Consensus and the Doha Declaration, emphasizing that they could only be as effective as the level of political support they enjoyed.  While every Member State should take primary responsibility and ownership of its own development, they must acknowledge that domestic economies were interwoven with the global economic system.  It was also important for developing countries to share and exchange experiences and best practise in moving towards fulfilment of the Millennium Development Goals.  Within its means, the Government of Singapore was doing its part to share development experiences through the Singapore Cooperation Programme, he continued.

Since 1992, the country had organized training courses for more than 75,000 public officers from 170 countries.  It also shared its expertise in areas such as urban planning, water management, education, and health care, among others.  Cross-regional cooperation offered many benefits, from the exchange of views and best practices to the mobilization of resources and technical expertise.  He welcomed development frameworks initiated at the regional level, such as the New Partnership for Africa’s Development and the 2000 Initiative on ASEAN integration, conceived to narrow the development divide among the region’s countries and around the world.  Through dialogue, capacity-building, and increased connectivity, Singapore would help member States meet their targets and commitments towards realizing the ASEAN Economic Community by 2015 which would boost trade, investment and development in the region.

JAIRO RODRÍGUEZ HERNÁNDEZ (Cuba), associating himself with the Group of 77 Developing Countries and CELAC, called for a global paradigm shift to tackle the effects of the global economic and financial crisis.  It was alarming that most developed countries had not stayed true to their ODA commitments.  Reiterating the importance of honouring them, he said they must fulfil their responsibility on financing for development.  He called for the cancellation of all external debt of owed by the global South, especially in respect of the neediest countries.  Cuba also called on for the creation of a more just and equitable international order, which was essential to relieve the hardships of the world’s poor people who had been suffering for far too long.

DONG ZHIHUA (China), associating himself with the Group of 77, called for strong, sustainable and balanced world economic growth, calling on developed countries to carry out structural reforms, adopt responsible fiscal and monetary policies and properly address their debt issues, while urging developing countries were to formulate integrated policy measures, work hard to promote growth and employment and actively mobilize domestic resources to fund development.  He also called for the fulfilment of ODA commitments, which were fundamental to improving the United Nations development system.

He went on to underscore that international financial institutions and South-South cooperation could also supplement the efforts of developed countries to mobilise aid.  Global economic governance needed strengthening to create a favourable external environment for developing countries.  The international financial system should give a greater voice to developing countries, and improvements were needed to the global financial regulatory system in order to strengthen the regulation of cross-border capital flows and bulk commodity derivatives.  Follow-up mechanisms for development financing also needed strengthening, he said, pointing to declining participation in the General Assembly high-level dialogue on financing for development.

MARTIN BRIENS (France), associating himself with the statement to be read out by the European Union delegation tomorrow, said he attached high importance to ODA because it was a catalyst in financing basic social sectors in many least developed countries.  He called for an expanded donor base in the financing for development spectrum.  On the national level, more than 15 per cent of France’s support was focused on least developed countries and 60 per cent on sub-Saharan Africa, he said.  The country had established an international financial tax that would allocate a certain percentage of its revenue to aid.  Regarding the United Nations, he said the Organization played an integral role.

He called on the Second Committee to approve a draft resolution on financing for development that would be cover the newer challenges caused by the global economy.  Turning to the post-2015 development arena, he said the issue would be to agree on the goals that would facilitate a more effective fight against poverty and preserve global assets.  It was important to stay in line with the three pillars of sustainable development — social, economic and environmental.  The time when development financing had been restricted to a handful of donors was “behind us”, he said, adding that diverse new actors were involved.  “We are living in a time of shared responsibility,” he said.  Financing for development was a global responsibility and the international community had a vested interest in it.

ABIODUN RICHARDS ADEJOLA (Nigeria), associating himself with the Group of 77 and China, said the pervasive effects of climate change constituted the greatest challenge to attainment of internationally agreed development targets, including the Millennium Development Goals.  Doha had served as another opportunity to reset the global financial agenda but regrettably, its outcome, the Doha Declaration, did not “pass the litmus test of acceptability”.  The Government of Nigeria had made concerted efforts to respond by implementing a “transformation agenda” aimed at bridging the gaps through infrastructure development, promotion of food security and capacity-building, he said.

He reaffirmed the need for the global community and relevant international institutions to undertake bold, coordinated and coherent approaches to address the challenges associated with the global economic and financial crisis.  Specifically, he said all forms of financing for development, including ODA, FDI, improved sovereign debt management, remittance flows and domestic resources must be engaged in the collective resolve to tackle the crisis.  The global financial environment should demonstrate a shift from promises to actual and concrete delivery on commitments, he reiterated, adding that the global financial system should institute debt sustainability policies, including outright debt cancellation for heavily indebted poor countries (HIPC).

Interactive Dialogue on Project LINK Global Economic Outlook

Earlier today, the Committee heard that a “fundamental policy shift” was needed to address a “vicious cycle” of debt, low growth and high unemployment.

Co-chairing the event were George Talbot ( Guyana), Chair of the Second Committee and Luis-Alfonso De Alba (Mexico), Vice-President of the Economic and Social Council.  The panel featured Rob Vos, Director of the Development Policy Analysis Division, Department of Economic and Social Affairs; Peter Pauly, Professor of Economics and Business Economics, University of Hamburg; Andrew Burns, World Bank; Moazam Mahmood, International Labour Organization (ILO); and Shamshad Akhtar, Assistant Secretary-General for Economic Development, Department of Economic and Social Affairs.

Mr. VOS said that without such a shift, the renewed global economic slowdown would considerably raise the risk of a downward spiral into another global recession, as the United States approached a “fiscal cliff” due to domestic political deadlock, the eurozone crisis escalated and major emerging economies such as China, India and Brazil faced the prospect of a “hard landing”.

He said structural policies needed a redesign to support job creation and green growth instead of reducing unemployment benefits and pensions, while fiscal austerity required a rethink to prevent it from muting the positive effects of quantitative easing, which was accelerating measures currently being applied.  He called for the acceleration and expansion of financial-regulation the reform saying delays and political obstacles were adding to the global economic uncertainty.

Lower income countries were now facing spillover effects, with markedly slower global trade, continued high and volatile oil prices, as well as commodity and capital market volatility, he said.  In addition, “home-grown” problems, particularly the phasing out of stimulus measures and policy tightening in some countries, were causing the sort of significant growth decelerations seen recently in Brazil, China and India.

Focusing on tackling one of those home-grown challenges, Mr. BURNS said that “output gaps” in developing countries were markedly different to those seen in the developed world.  The recession had caused a clear and significant gap between the potential output of the latter and their actual output, which remained, he said.  Developing countries, however, had recovered fairly quickly from recession, with figures showing that many remained within 1 per cent of their potential output.  Therefore, he called for policy choices focused on structural improvements that would yield longer-term growth and stability rather than on stimulating output in economies that were actually quite healthy in that regard.

Good fiscal situations had actually protected many developing countries when the crisis had hit, and many had emerged well, he continued.  However, doing so had impacted their fiscal surpluses, and they now generally found themselves in much less healthy fiscal situations.  It was important to use the current period of relative economic calm to re-establish the fiscal cushions needed to prevent a “very bad situation” arising if the global economy “double-dipped”, he stressed.

That cushioning was particularly important, given the comments of Mr. PAULY, who said the current recovery was very different to a normal business cycle, with growth far below its potential path.  Poor growth was something the world would “have to live with” for a number of years, with few short-term solutions immediately apparent.  Indeed, for many countries, especially in Europe, fiscal expansion was not an option due to debt and austerity measures that were costing far too much, he said.  The current fundamentally slow growth period would persist “for quite some time”, he predicted, saying the return of global growth and stability would depend on the recovery of financial stability in Europe.  That in turn would require deeper integration, though that was a longer term project which would not produce immediate results.  In the medium term, Mr. Pauly said, despite some significant medium-term opportunities, he did not envisage growth breaking through 2 per cent.

Mr. MAHMOOD said he saw evidence of a global economic recovery, but it had not been accompanied by similar growth in jobs and employment opportunities.  That was particularly significant in the advanced economies, he said, adding that the structural reforms being undertaken in Europe were “off the mark”.  He predicted the loss of a further 2.5 million jobs in 2013, mainly in the European Union but with spillover effects elsewhere, and said the world must create 30 million jobs to begin redressing the increase in unemployment recorded since the beginning of the global economic crisis in 2007.

Ms. AKHTAR started the interactive dialogue by asking about fiscal austerity and the limits of monetary policy.  Could a “spiral of uncertainty” exist because the global economic and financial crisis was so protracted?

Mr. VOS said uncertainty was inherently difficult to be sure about, and that this was particularly true in Europe’s case.  Questions over focus meant that it was difficult to choose between attacking debt with austerity measures, building confidence by increasing Government spending and making bold monetary policy decisions.  He stressed again the need for a broad and coherent approach to tackling the various issues.

The representative of the United Republic of Tanzania asked about the global response to continuing low growth.

Mr. VOS replied that policies designed to address it focused on national-level concerns, and the sum total of national responses did not add up to a solution.  Cautioning against fiscal austerity, he said Governments should address aggregate demand and job-creation shortfalls through structural programmes that could have short-run impacts.

Mr. MAHMOOD, responding to a question about the redesign of structural policies to boost growth, said that an “employment gap” existed alongside the “output gap” faced by many economies.  To fill them would require global GDP growth of 5.2 per cent and a 3 per cent rise in investment levels, a large jump.  Vulnerability in the labour market had increased, with women’s jobs proving slower in returning to pre-crisis levels and youth unemployment “incredibly high”.  To address those issues, as well as the growing number of discouraged workers dropping out, would require a coherent policy, he said.

Also taking part were representatives of Morocco and Germany.

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For information media • not an official record