UN Session on Developing Countries & the World Financial Cri sis

UN Acts to Protect Rights of Developing Nations as World Economic Crisis Unfolds and Solutions are Being Projected

by Mike Tolochko

As the pressure for change builds up, the design of the new architecture must necessarily be inclusive and democratic to be credible and sustainable."

Those are the words of emphasis by United Nations General Assembly President, Miguel D'Escoto as he invited and convenes a special meeting of the 192 Member States of the UN General Assembly.

On Thursday, October 30, President D'Escoto will establish and convene a "HIGH LEVEL TASKFORCE OF EXPERTS to undertake a comprehensive review of the international financial system, including the major international economic institutions, and to suggest steps to be taken by Member States of the United Nations to secure a more stable global economic order."

The UN Press Release for the session draws on the recently held annual September General Assembly which, "expressed their concern that the global monetary and financial arrangements, established in 1944 at the 'United Nations' Monetary and Financial Conference' at Bretton Woods, New Hampshire, needs to be fundamentally reformed to better reflect contemporary economic realities in today's interdependent world and to better respond to the new challenges in a sustainable and equitable manner."

Developing Countries Must be Included

But, it is in the next section of the Press Release that the main reason for this extraordinary session has been put together. D'Escoto and the Press Release make it clear that, "the financial system cannot be solved through piecemeal responses at the national and regional level" and then notably added, "Currently, developing countries voices and interests are not fairly represented in the existing global institutions of economic governance. The developing world includes many more powerful economies than in 1944, its role in the trading system has grown significantly and it includes prominent creditor as well as debtor nations. As such, developing countries have an abiding interest in a democratic rules-based financial system, with effective financing mechanisms and impartial institutions able to deliver timely and tailored advice."

In the background paper provided by the UN, the economic concerns are very deep. "The economies of Africa and Latin America and the Caribbean could come to a standstill. Even the fast-growing Asian countries would suffer major blows. Of great concern at the United Nations is that these global setbacks could produce serious reversals in the efforts to achieve the Millennium Development Goals [MDGs], crucial to poverty reduction for billions of people."

The IMF and Bretton Woods Failures

The background paper states it very clearly, i.e., their lack of confidence in current international institutions to deal with the crisis, "….the inadequacies of the international response have raised questions as to the capacity and even the relevance of the Bretton Woods institutions, particularly the International Monetary Fund, in identifying effective action to safeguard the stability of the global economy."

In Preparation for Doha Review Conference

The calling of this October 30^th sessions takes place just a few weeks prior to the next major international conference on the topic. This UN Conference on Financing for Development is shaping up to be very crucial session. The UN General Assembly is currently drafting an outcome document for this conference. This conference will be November 29 to December 2, 2008 in Doha, Qatar. This Qatar conference will review the international commitments on financing for development that were identified at the Monterrey, Mexico session in 2002.

The UN General Assembly is making sure that the food crisis and climate change will be high on the agenda.

Four Key Presenters

There will be four major speakers at this Thursday's conference:

Joseph Stiglitz, Nobel Memorial Prize in Economic Sciences [2001] and former Senior Vice President and Chief Economist at the World Bank;

Francois Houtart, Chief Editor, International Journal of Sociology of Religion – "Social Compass"

Prabhat Patnaik, Professor, Centre for the Economic Studies and Planning, Jawaharial Nehru University

Pedro Paez, Minister, Economic Policy Coordination of Ecuador and Coordinator of the Southern Bank [South America]

Format of Session

Being an official session of the UN, only Member States representatives will be admitted into the Trusteeship Council Chamber; but, representatives of Non Governmental Organizations [NGOs] will be admitted into the balcony of the room to hear the deliberations.

They call this session an interactive session so that Member State representatives will able to ask the 4 speakers questions following their presentations.

Note: The President of the General Assembly of the United Nations serves for a one year term. In the past, many of these one-year Presidents have put forward many of the more creative ideas which stem from the General Assembly where all of the nations have a voice and use it. This president is combining the MDGs with the international financial crisis.

Report From Session

Stay tuned for Friday to see the results of that session.