Background
The Second Committee (Economic and Financial) met this morning to continue its general debate.
Statements
ABDALLAH BAALI (Algeria), saying that the repercussions of the recent failure of trade talks at Cancun would be felt in the Second Committee’s work, noted, however, the international community’s growing determination to take on various challenges facing it by strengthening international cooperation. Major United Nations conferences held over the past two years, such as those at Monterrey and Johannesburg, as well as the Millennium Summit, had created a global context conducive to collective action.
He said that 2003 had ushered in a new era of enactment with respect to the implementation and follow up to major conferences and summits in the economic and social arenas, which would demand coordination and consistency at all levels. It was essential to strengthen international cooperation for economic development by promoting a renewed North-South partnership, increasing official development assistance, dealing with the debt burden, increasing foreign direct investment and reforming the international financial architecture.
The International community must also take stock of progress made in implementing the New Partnership for Africa’s Development (NEPAD), which must be supported by the United Nations system.
MARTIN ANDJABA (Namibia) said the Cancun talks had failed to reach agreement on issues essential for development, notably trade, aid, debt, market access, agricultural subsidies and other trade-distorting policies. Notwithstanding those shortcomings, the Second Committee must address economic and development issues of concern to people in developing countries. The agreements reached during the Doha round were still valid and should serve as lessons learned to guide the decision-making in preparation for the June meeting in Brazil of the United Nations Conference on Trade and Development (UNCTAD).
He called on the Committee to pay sufficient attention to the predicament of countries of the South with respect to uneven development, poverty, hunger and disease, particularly HIV/AIDS. Natural catastrophes such as drought and floods exacerbated the HIV/AIDS pandemic, making increased funding necessary to fight the deadly virus. Recent data showed that Namibia’s chances to achieve the millennium goal of halving extreme poverty by 2015 were slim. The international community should deliver on promises to support Africa’s development priorities in the context of NEPAD.
VLADIMIR DROBNJAK (
Croatia) said the Second Committee’s work took into account the World Trade Organization (WTO) development agenda, the International Conference on Financing for Development and the World Summit on Sustainable Development, and should stay on track to give political impetus to support for new partnerships. In that regard, the Committee should approach forthcoming discussions in a holistic manner, avoiding repetitive and sterile debates and decisions that commanded little or no attention beyond the General Assembly chamber.
He cited the findings of the Secretary-General’s report that several developing and transition economies had stepped up efforts to strengthen governance by including civil society, the private sector and local communities in decision-making. While private international capital flows were a vital addition to national efforts to mobilize financing for development, foreign direct investment (FDI) was not a substitute for official development assistance (ODA) to developing countries. Both were needed for a balanced development process.
ORLANDO REQUEIJO GUAL (
Cuba) said that despite promises made at Monterrey, developed countries continued to grant just 0.2 per cent of gross domestic product for ODA. In 2003, wealthy nations would grant $53 billion in assistance but
also charge interest on developing nations’ external debt amounting to more than $350 billion dollars, causing that external debt to grow. External debt servicing was a formidable obstacle to development.The most serious challenge, he said, concerned the failure of the recent trade round at Cancun to comply with the demands of developing nations for more just and equitable world trade patterns; an end to subsidies on their vital exports, at present $274 million annually; and implementation of preferential tariff schedules. The Second Committee would continue to be an important forum to debate economic and development issues, particularly concerning developing countries. Future Committee meetings should focus on follow-up to Doha and implementation of decisions made at the Johannesburg World Summit on Sustainable Development.
KHONDKER TALHA (
Bangladesh) said that while globalization was perhaps the most potent force shaping economic relations among countries today, due to structural and systemic constraints, most of the developing world had not been able to fully integrate with the process and could not benefit from it. What was needed was an international environment conducive to development, a more transparent and participatory international financial architecture and a predictable flow of financial resources to developing countries that would reduce their vulnerability to financial crises.
Noting that the setback at Cancun warranted an early resumption of trade negotiations, he said that a breakthrough in those negotiations would require courageous decisions and significant compromises. Today’s global economic situation dictated the equitable policies and fair trade practices that had been sought in the Doha round. That round should be further negotiated and the developed world should fulfil its commitments before taking up new issues. Bangladesh was concerned by the high incidence of tariff and non-tariff barriers that were restricting market access for the products of developing countries to the markets of developed nations.
AMINA MOHAMED (
Kenya) associated herself with Morocco’s statement on behalf of the "Group of 77" developing countries and China, calling on the international community to work toward alleviating the external debt crisis in developing countries and enabling them to re-channel debt-servicing funds into socio-economic development programmes. Moreover, ODA had declined in real terms in recent years and wealthy nations should fulfil their pledge to earmark 0.7 per cent of gross domestic product (GDP) for development assistance. Developing countries also needed a greater say in decision-making on global trade, she said, urging the upcoming high-level dialogue on financing for development to include that concern on its agenda. The developing world’s current share of world trade was negligible and a level playing field was required in which developing countries would have better market access and infrastructure.
Underscoring the need to provide sub-Saharan Africa with the tools to implement partnerships in the fight against HIV/AIDS, she said the Kenya Government was doing its part to combat the pandemic through treatment, prevention and education initiatives, funded in part by international partners. Turning to poverty reduction, she said it was key to prosperity in sub-Saharan Africa. Kenyan officials had launched a strategy in June to maintain a stable macroeconomic framework, strengthen governance, expand infrastructure and develop the human resource capacity of the poor. Poverty-eradication, however, would require extensive financing, she said, urging development partners and other international organizations to finance such programmes and contribute to the recently-created World Solidarity Fund.
AHMED AL-HADDAD (
Yemen) said that economic indicators had shown an increase in economic activity in some countries that would have a positive global fallout. However, such optimism should not be exaggerated, since several developmental weaknesses were also evident. Those were due to events in the industrialized economies and to geopolitical uncertainties that had effects on economies worldwide.
Economic recovery required reform of the international financial architecture, he said, calling for solutions to the contradictions occurring in international trade negotiations. From the point of view of developing countries, the problem was not simply one of agricultural subsidies, but violations of the rules governing global trade negotiations and the very spirit of multilateralism.
OSWALDO DE RIVERO (
Peru), speaking on behalf of the Rio Group, noted that Latin America’s economy had expanded just 1.5 per cent this year and that an estimated 43.3 per cent of Latin Americans, including 18.8 per cent of the indigenous population, lived in poverty, according to the
2003 Human Development Report and the Economic Commission for Latin America and the Caribbean. Latin America’s future was uncertain as foreign investment was declining, making the region a net exporter of financial resources to the tune of $15 billion annually in interest and utility payments and repatriated profits. That was contrary to the poverty-reduction and economic growth goals set forth by the Monterrey Consensus.
Recalling a summit meeting in Cusco, Peru, in May, he said heads of State of 19 Rio Group members had called for the creation of financial mechanisms such as private funding for regional infrastructure that would help build democracy, eradicate poverty, spur productive investment and create jobs. The leaders had also stressed the need to explore new debt instruments linked to economic growth, such as indexed bonds, so that in times of recession the payment schedules of Latin American nations would be smaller. The United Nations, the Group of Eight, the World Bank, the International Monetary Fund (IMF) and the Inter-American Development Bank (IADB) should make a collective effort to support those proposals without delay, he concluded.
V.K. NAMBIAR (
India) said global trade and FDI flows lacked dynamism, contributing to the overall weak world economy. No durable solution had been found to the severe debt crisis of many developing countries and increased protectionist measures against their exports continued to characterize international trade. Moreover, a 2002 World Bank study estimated that developing nations would need another $50 billion annually in ODA to achieve national poverty-eradication targets by 2015 as set forth in the Millennium Development Goals. Enhanced cooperation was imperative in order to win the fight against poverty, disease and illiteracy, he added.
Effective measures were also needed to make trade work as an engine for growth and development, he said. In that regard, a top priority should be achieving greater equity in international economic relations and giving a greater voice to developing countries in the decision-making structures and processes of international trade, monetary and financial institutions. Those goals should be on the agenda of the High-level Dialogue on Financing for Development to be held on 29 and 30 October.
GILBERT LAURIN (
Canada) said that the delegations of Andorra, Australia, Canada, Iceland, Liechtenstein, Norway and San Marino had decided to intervene during debates under individual items, rather than during the general debate, in the spirit of United Nations reform, which called for better focus in the Second Committee’s work. Given the importance of issues addressed by the Second Committee, that approach should lead to a more focussed and coherent discussion of each topic.
DARMANSJAH DJUMALA (
Indonesia) recalled that the international community had acknowledged at Monterrey the potential of trade as an engine for development and agreed to place the needs of developing countries at the heart of the WTO’s work. There was widespread agreement that promoting an open, equitable and non-discriminatory multilateral trading system was imperative. For that to happen, however, there must be greater access for products from developing countries to developed-world markets, as well as special and differential treatment and a phase-out of harmful agricultural subsidies.
Stressing that the absence of political will to accommodate the ambitions of developing countries at Cancun was a recipe for failure, he said the WTO’s future depended on its ability to make the Doha round rest on a development platform. In addition to the Cancun meeting, several conferences and summits had been convened over the past few years and now was the time to translate the words of those conferences into deeds. The coming years should be fully dedicated to implementing those solemn commitments. Indonesia hoped that deliberations in the Second Committee would be guided primarily by contributions towards and review of progress made in achieving those goals.
U WIN MRA (
Myanmar) said his country attached great importance to achieving sustainable development and was fully committed to implementing Agenda 21. Myanmar was party to international environment conventions on biodiversity, desertification and climate change and had acceded to the Kyoto Protocol in August. Grassroots or rural development was paramount to Myanmar’s largely agriculture-based economy and its ability to fulfil the Millennium Development Goals.
A 30-year national road network and clean water development plan, including 24 regional mega-projects had already begun to raise living standards in rural communities, he said. While lauding the grassroots work of the Human Development Initiative Programme of the United Nations Development Programme (UNDP), he said the Programme addressed just 3 per cent of the rural population. Investment must be stepped up to have a real impact on rural development.
JEANETTE NDHLOVU (
South Africa) said the recent WTO meeting in Cancun was expected to lay down the building blocks of the Doha development agenda. Regrettably, the talks had been unable to take the agenda forward, which was a setback for the entire development community. At Cancun, developing countries had come together for the first time to advance the development agenda. The Group of 21 had presented balanced proposals to further the trade agenda for developing countries, which had marked a new chapter in WTO dynamics. In future negotiations, advantaged nations must make sacrifices in the interest of creating a more just and equitable world.
Stressing that a new economic environment was needed to expand opportunities for developing countries, she said trade could contribute to poverty eradication. Agricultural subsidies in developed countries were detrimental to development efforts in the developing world, offsetting the benefits of other forms of international cooperation. Expenditure on agricultural subsidies, for example, far outreached that of ODA.
Efforts to reform international financial and trade institutions must be enhanced, she said, adding that the involvement of developing countries in the agendas and decision-making processes of such institutions would help to increase the ownership of policies laid down -- a prerequisite for their success.
LUIS GALLEGOS (
Ecuador), aligning himself with the Group of 77 and China and the Rio Group, said that despite economic reforms, the structural vulnerabilities of developing countries had worsened. Larger and longer negative fluctuations of international markets had forced more and more people worldwide to migrate in search of better economic opportunities. Large percentages of undocumented immigrants were exploited and denied basic needs. The international community must come to grips with that phenomenon, he stressed, describing protection of migrants’ rights as a shared responsibility.
The servicing of external debt devoured huge chunks of the national budgets of developing countries, hamstringing their ability to implement much-needed social development and infrastructure projects, he said. The international community must stop dealing with external debt as merely an economic or statistical issue for it was a social and human problem. Reducing the burden of external debts on developing countries was in the best interests of debtors and creditors alike.
Ms. DAVILA (
Colombia) said the drop in FDI in Latin America had turned the region into a net exporter of financial resources. Coffee production and sales was the livelihood of millions of farmers in Latin America, as well as Africa and Asia, but falling prices of coffee and other basic raw materials on world markets had pushed many poor people further into poverty. Forty per cent of Latin Americans now lived in poverty, according to recent estimates of the Economic Commission for Latin America and the Caribbean. Low demand for alternative agriculture products seriously impeded the ability of their governments to stem illicit drug production and the migration of rural communities to the cities.
Despite those obstacles, she said Colombia had slashed illicit drug production by 30 per cent, implementing environment and sustainable development programmes to remove illegal crop production from large swaths of forests according to the United Nations Office on Drugs and Crime. The international community must redouble its efforts to reduce drug use, control production and intensify cooperation to end drug-money laundering in the global banking system. A drug-free world was, without doubt, a more secure and economically prosperous world.
FLORENCE CHENOWETH, Food and Agriculture Organization (FAO), noted that hunger, whether caused by war, drought, natural disasters or poverty, had continued to cause widespread suffering. Poverty was one cause of hunger, but also a consequence of it. In countries where hunger was widespread, overall growth was also compromised by a yearly decline of almost 1 per cent in economic growth. Where hunger was prevalent, alleviating it was necessary for sustainable poverty reduction. At the current pace of progress in fighting hunger, the goal adopted by the World Food Summit of halving the number of the world’s hungry people by 2015 would be met 100 years later than that.
Turning to the issue of HIV/AIDS, she said it was perceived by FAO as a problem of vital importance for development in general rather than simply as a health issue. The pandemic complicated existing labour bottlenecks in agriculture and increased widespread malnutrition. It also aggravated the problems of rural women, especially in female-headed farm households, which came about through the gender division of labour and land rights, as well as resources, particularly in Africa.
NICHOLAS ROBINSON, Chairman of the World Conservation Union (IUCN), said the organization was concerned that the understanding of poverty as revealed by recent research, as well as public statements by donors and recipients alike, was inadequately reflected in current development policy and practice. Most of the current poverty-alleviation strategies emphasized enhancing market opportunities available for the poor, a goal that, however important, was insufficient since it did not guarantee the full range of conditions needed to achieve lasting well-being. It was necessary to widen the focus from economic opportunity and social services to a broader range of objectives, including empowerment, effective participation in decision-making, enhancement of the ability to exercise control over lives and resources, and assurance of an environment that tangibly contributed to human welfare.
International trade widely affected sustainable development, particularly the conservation of biological diversity and social equity, he said. The need to achieve mutual supportiveness between trade and sustainable development had been affirmed steadily since the United Nations Conference on Environment and Development in 1992 and most recently affirmed by the Johannesburg World Summit on Sustainable Development. Much remained to be done, however, as shown recently at Cancun. The achievement of international policy and legal coherence between sustainable development and trade was urgently needed and the United Nations system had a key role to play. The IUCN urged the United Nations to engage more strategically and proactively in ensuring a successful outcome of the Doha Agenda.
