Resolutions on economic and development issues adopted today (15 December) by the United Nations General Assembly not only reflect recognition and support to UNCTAD’s role and work but also "testify to our capacity to foster international consensus – and more- on major global issues", UNCTAD Secretary-General Rubens Ricupero stated today at the Trade and Development Board. The UNCTAD governing body was meeting in a one-day executive session.
The General Assembly resolutions, adopted by consensus, assign important responsibilities to UNCTAD with regard to a wide range of issues: examining the effects of globalization, implications of the financial crisis, concerns about official development assistance (ODA) and debt, trade and related matters, and governance of the international monetary, financial and trade systems.
The UN General Assembly’s action on those issues should help respond to the challenge of globalization and global governance. At a press conference yesterday in New York, UN Secretary-General Kofi Annan stated that a double challenge the United Nations would face in the coming year was the perennial challenge of international peace and security, and the challenge of globalization and global governance (see UN press release SG/SM/98/400).
Speaking about the close interconnection between economic and political security, Mr. Annan stated that "unless we tackle the underlying distortions and imbalances in the global economy, unless we start to provide the kind of global governance that is needed, we must expect more conflicts and even more intractable ones". In this light the Secretary-General said he would be proposing new initiatives to the world business community at the annual meeting of the World Management Forum in Davos (Switzerland) next month.
The drama that had affected most people, all around the world, in 1998 had been the Asian financial crisis. "At least, that’s what we were calling it a year ago", the UN Secretary-General stated. "By now we all realize that it is neither only Asian nor only financial. It affects almost the whole world, although in different ways. And it has affected whole economies, indeed whole societies - - the ordinary lives of millions and millions of people". The UN could not afford to leave the economic and social issues to others.
Financial crisis
Deeply concerned that the international financial crisis has acquired "extremely worrying dimensions, posing a threat to world economic development", the General Assembly today called on UNCTAD to help "analyse the current trend in global financial flows and modalities to improve early warning prevention and response capabilities for dealing with the emergence and spread of financial crisis in a timely manner, taking a long-term perspective, while remaining responsive to the challenges of development and the protection of the most vulnerable countries and social groups".
In the same resolution, entitled "the financial crisis and its impact on growth and development, especially in developing countries" (A/C.2/53/L.55), the General Assembly formulates recommendations to the international community consistent with those made by UNCTAD in its analyses of the crisis, notably in its Trade and Development Report 1998, released in September.
Major industrialised countries are called upon to adopt policies conducive to economic growth and to promote a favourable external economic environment for the recovery of the affected countries. International financial institutions, in providing policy advice and prescriptions in the context of adjustment and financial crisis programmes are asked to be sensitive to the specific circumstances of the concerned countries.
The General Assembly stresses the need for the international community to work towards a global approach towards financial crisis. It recognises the need to improve the capacities and modalities of the international financial institutions with regard to the prevention, management and resolution of international financial crises in a timely and effective manner. It invites the International Monetary Fund (IMF) and relevant international regulatory bodies to consider as quickly as possible additional regulatory and disclosure measures to ensure greater transparency on the part of financial market participants. International institutional investors, particularly highly leveraged operations are singled out.
The General Assembly emphasizes that the opening of capital accounts must be carried out in an orderly, gradual and well-sequenced manner, keeping its pace in line with the strengthening of countries’ability to sustain its consequences. Costs of systemic adjustment should be distributed more equitably between public and private sectors.
At the Trade and Development Board in Geneva, Mr. Ricupero said that the General Assembly’s call on the IMF to facilitate the dialogue among relevant actors to consider the possibility of establishing regulatory frameworks for short-term capital flows and trade in currencies was particularly noteworthy. He pointed out that this was the first time that intergovernmentally agreed language had been arrived at on these matters.
External debt
Two developments have led to increased attention to the external debt of developing countries: namely, problems relating to debt workouts of countries hit by the financial crisis, and serious concern at the slow progress in the implementation of the World Bank/IMF Highly Indebted Poor Countries (HIPC) initiative. The General Assembly has thus adopted a resolution aimed at "Enhancing international cooperation towards a durable solution to the external debt problem of developing countries" (A/C.2/53/47*), in which it urges the swift implementation of innovative approaches and concrete measures.
In the view of the UNCTAD Secretary-General, "the agreed formulations on this issue, which largely reflect the recommendations made in UNCTAD reports, represent a significant advance in international consensus on the subject". He mentioned that "for the first time there was an agreement on the temporary suspension of payments to allow debtor countries breathing space while maintaining access to interim financing – an idea advanced forcefully in this year’s Trade and Development Report".
The General Assembly calls for "the speedy and determined extension of the HIPC initiative to more countries, and encourages all eligible countries to take policy measures needed to embark on the process as soon as possible so that all can be in the process by the year 2000". Additional financial resources for the initiative should not affect the support required for other development activities of developing countries, it cautions. Increased flexibility with regard to the eligibility criteria is considered important, particularly for known borderline cases and countries emerging from conflict.
The General Assembly also calls upon the international community to support developing country efforts to strengthen their institutional capacity in debt management. UNCTAD has been providing assistance in this regard through its DMFAS programme, a computer-based debt management system already installed in forty-two countries.
Trade and development
In its traditional resolution on international trade and development (A/C.2/53/L.26/Rev.2) in addition to current mandates, the UN General Assembly has given UNCTAD new responsibilities in two key trade-related areas. Referring to the upcoming third Ministerial Conference of the World Trade Organisation (WTO) and the need for broad-based liberalization, the General Assembly invites UNCTAD to provide analytical support and technical assistance to developing countries to formulate a positive agenda for future trade negotiations. A second new mandate concerns the provision of technical assistance to developing countries, in particular the least developed countries (LDCs) and small island developing countries, in taking the fullest possible advantage of the WTO dispute settlement mechanism.
Among the organization’s existing mandates highlighted in the resolution is the provision of technical assistance to developing countries and countries with economies in transition for their rapid and full integration into the international trading system.
The resolution reiterates the importance of continued trade liberalization, including in sectors of export interest to developing countries. It sees a need for the rolling back of tariff peaks and tariff escalation; the elimination of trade-distorting policies and protectionist practices; subjecting anti-dumping duties, countervailing duties, phytosanitary and technical standards to effective multilateral surveillance, and the improvement and more effective utilisation of the Generalized System of Preferences market access schemes.
The need to reverse the marginalization of the LDCs and to promote their expeditious integration into the world economy is seen as "an ethical imperative" for the international community. Special mention is made also of the need to enhance market access for products of export interest to African economies and to support their efforts at diversification and building supply capacity. Another category of countries that needs to be given special attention are the small island developing States and landlocked developing States. Developing countries that provide transit services need adequate support in maintaining and improving transit infrastructure, it says.
The General Assembly reaffirms "the role of UNCTAD as the focal point within the United Nations for the integrated treatment of development and related issues in areas of trade, finance, technology, investment and sustainable development". It considers that UNCTAD X, to be held in Thailand in the year 2000, "will provide an important opportunity for the United Nations system and the international community to make a collective reflection on development".
Commodities
The General Assembly also adopted a resolution today devoted entirely to the issue of commodities (A/C.2/53/L.51). It recognized that "in many developing countries, in particular African countries and LDCs, the commodity sector remains the principal source of export revenues, the creation of employment, income and savings, as well as the driving force of investment and a contributor to growth and development". Issues related to commodities should therefore be considered in the preparation of UNCTAD X. Such issues should also be included in UNCTAD’s support to the preparations of developing countries for future trade negotiations.
Noting the need of the developing countries for stable and more predictable commodity prices, the General Assembly "expresses the urgent need for supportive international policies to improve the functioning of commodity markets through efficient and transparent price formation mechanisms, including commodity exchanges, and through the use of commodity price risks management instruments", an area in which UNCTAD has been providing increasingly technical assistance during recent years. Effective financial co-operation to facilitate the management by commodity-dependent countries of excessive fluctuations in commodity export earnings should be maintained and further pursued.
UNCTAD should also provide assistance to developing countries on the financing of commodity diversification. The resolution also calls for international support towards the industrial transformation of the commodities of developing countries, in order to increase their export revenues and to improve their competitiveness. In the light of the process of multilateral trade liberalization, which has led to the diminution of differentials accorded by preferred trade regimes, the General Assembly sees a need to strengthen technical assistance and address supply-side constraints faced by commodity-dependent developing countries.
Business and development
In a resolution advocating action against corruption and bribery in international commercial transactions (A/C.2/53/L.7/Rev.1), the General Assembly mandates UNCTAD to assist Member States in implementing national programmes, to strengthen accountability and transparency and implement relevant conventions, declarations and instruments in this field. UNCTAD has been requested to prepare a report by the UN Secretary-General to the General Assembly in the year 2000 on measures to implement the resolution.
Globalization and interdependence
In a resolution on the "Role of the United Nations in promoting development in the context of globalization and interdependence" (A/C.2/53/L.57), the General Assembly highlights the central role of the UN in providing guidance on global development issues, as well as the role of UNCTAD in this regard. UNCTAD has been entrusted with the responsibility of preparing a report by the UN Secretary-General, for the next session of the General Assembly, on interrelated issues in order to facilitate better understanding of globalization. The General Assembly asks that this report contain recommendations in two important areas: (a) the role of the UN in promoting development in the context of globalization and interdependence; and (b) promoting coherence, complementarity and coordination on economic and development issues at the global level.
Land-locked countries in Central Asia
In a resolution, devoted to this issue (A/C.2/53/L.34/Rev.1), the General Assembly "notes with appreciation the contribution of UNCTAD to improving the efficiency of the transit transport system in the landlocked States in Central Asia and their transit developing neighbours" and invites the organization to continue elaborating a programme for improving the efficiency of the current transit environment" in that region. A more active support role on the part of the donor community is called for.
Third UN Conference on LDCs
Following a recommendation by the UNCTAD Trade and Development, the UN General Assembly decided to convene the Third United Nations Conference on the LDCs in the first half of the year 2001, for a duration of seven days (Resolution A/C.2/53/L.23). The venue and time will be determined in consultation with the European Union, which has offered to host the Conference.
