unctad.org | ECOSOC high-level policy dialogue on world economy elicits lively debate
ECOSOC high-level policy dialogue on world economy elicits lively debate
04 July 2012
UN Member States took the floor during an interactive discussion at the ECOSOC high-level policy dialogue on the current state of the world economy held in New York "on 3rd July​, expressing concerns on unemployment, sustainability, and global economic governance.


According to a UN Department of Public Information (DPI) press release, following panel presentations by UNCTAD, UN-DESA, WTO, IMF and the World Bank, delegates posed a number of questions for the panellists, focused largely on issues of unemployment and sustainability, and calling for global economic governance measures to ensure people were healthy, educated and employed.

Some delegates asked whether it was best to emphasize austerity measures or stimulus packages, both options which had been discussed in the panellists’ statements.

Agreeing that the global economic situation was indeed “gloomy”, many delegates wondered how the panellists felt the world could best confront insufficiencies in its economy, while asking which particular structural policies would best bring about a stronger and faster global recovery.

A representative of a least developed country wondered whether the panellists saw ways to ensure delivery on the commitments agreed by development partners. For his country and others, there was no option for implementing an economic stimulus package, leaving them completely vulnerable to the cascading impact of present and future global economic crises.

Responding to the question on successful policies and global governance, Mr. Hans Timmer of the World Bank said developing countries should have a larger say in the international policy debate, and one could argue that G20 initiatives were one step in that direction. For their part, developing countries should devise global solutions. High-income countries should follow-up on global commitments.

As for whether the World Bank had the same kind of influence on poor countries, he said the answer was “no”. There was a serious problem with that fact. After the crisis, the Bank had tripled its lending and helped many countries absorb the shocks. That lending was mainly for middle-income countries. “We borrow from international markets to finance that,” he added.

But that was not a solution for the poorest countries, he said, which received aid flows coordinated by the World Bank. Those flows could not be tripled because they depended on donor money. “We were not as successful for the poorest countries as we were for the middle-income countries,” he conceded, which was why it was important for donors to follow up on their commitments. The fact that that funding had not increased, as promised, was a serious problem.

Ms. Valentine Rugwabiza of the WTO, responding to a question about implementing the Rio+20 call on sustainable development goals, said that last December, big changes had taken place in terms of market access for developing countries. China had decided to offer 97 per cent duty-free, quota-free access for all least developed country exports. India had done the same for 90 per cent of those exports. Also last December, a decision had been made to facilitate least developed country WTO accession. WTO members had since been working intensively, and last Friday, reached a deal regarding access, which was not yet public. As for what organizations could do, she said it was important to make progress on the Doha Development negotiations.

Mr. Min Zhu of the IMF said some issues were not yet understood, such as how technology impacted labour market conditions. There was room in the macroeconomic framework to promote job creation. The Fund worked with the International Labour Organization on job and labour market issues, as well as with programme countries including Zambia, Bulgaria and the Dominican Republic on creating a social protection floor.

To a question about balancing austerity and growth, he said both were needed. “We need a credible fiscal policy in the medium-term, and must promote growth in short term. Smart social expenditure was needed as well.

Dr. Supachai Panitchpakdi, Secretary-General of UNCTAD, took a birds-eye perspective, according to the DPI press release, saying that most questions circled around one central theme. “Are you really satisfied with the way global economic governance is being practiced at the moment?” he asked. “This is the big elephant in the room.” There was no leadership, no coordination, no inclusion or sharing of authority in determining the agenda of the future. States must be mindful that “we are just floating, drifting with no clear global agenda”. He asked whether the world could rely solely on G20 deliberations taking place twice a year for a day or two, as a way to steer the future.

“This is just not sufficient,” he insisted. The answer to all questions about special drawing rights, commitments, supplementary funds for the International Monetary Fund, and support for least developed country graduation was that commitment was lacking. There was no mechanism to enforce commitments. They were just pledges that could take decades to be realized. “We need short-term action now,” he said. “We do not have leadership. We do not have global governance. Yet we are talking as if we have them.”


 

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