Wednesday, May 27, 2009

UN Session: World Financial Crisis, Gen Assembly Pres. d' Escoto in charge

UN General Assembly Confronts Economic Crisis:
Developing Countries Taking The Lead

by Mike Tolochko

The United Nations Conference on the World Financial and Economic Crisis and its Impact on Development has been postponed to the 24th-26th of June 2009.

«We have an historic opportunity —and a collective responsibility— to bring new stability and sustainability to the international economic financial order.»

Miguel d'Escoto Brockmann
President, 63rd Session
of the General Assembly

UN-backed public symposium calls for 'deep and lasting' financial reforms
In face of crises, states must 'act together' now, or risk cycle of poverty, despair says Secretary-General at Sustainable Development Commission's high-level segment
Upcoming UN economic summit 'timely and historic' – Assembly President

The United Nations is convening a three-day summit of world leaders from 24 to 26 June 2009 at its New York Headquarters to assess the worst global economic downturn since the Great Depression. The aim is to identify emergency and long-term responses to mitigate the impact of the crisis, especially on vulnerable populations, and initiate a needed dialogue on the transformation of the international financial architecture, taking into account the needs and concerns of all Member States.

The United Nations summit of world leaders in June was mandated at the Follow-up International Conference on Financing for Development, held in December 2008 in Doha, Qatar. Member States requested the General Assembly President Miguel d'Escoto Brockmann to organize the meeting "at the highest level".

The June 1-3 UN Conference on the Economic Crisis has been postponed to June 24-26, 2009.

A few months following the election of Miguel d'Escoto Brockmann as President of the General Assembly, mid year 2008, it became clear that this one-year term position would not be a figurehead term. He quickly appointed an expert panel, headed by Nobel Prize winner Joseph Stiglitz to study how the crisis would affect all UN nations. By this time, Stiglitz had turned away from his World Bank and IMF days and had become a strong critique of neo-liberalism and its method of globalization.

D' Escoto's did not wait until the following Spring, 2009, which is what similar presidents have done, that is, to have his major meeting to discuss the issues that were weighing on his mind. He acted immediately. The upcoming Conference coincided with another call by UN nations, as indicated at the start of this Blog.

In October of 2008 d'Escoto called a special session of the General Assembly to allow the expert panel to report on their research and put forward a path for the next period of time. That special General Assembly session was attended by all 192 nations. And, in fact, d'Escoto coined the phrase: G-192 to indicate his preference in terms of nation groupings. He made it clear for a real recovery from the worldwide economic crisis the countries involved must not just be the G-8 or the G-20 or the G 66 plus China. The expert panel's report and recommendations were very stark and revealing. The anti-neoliberal and globalization policies of the rich nations had to be confronted. [See PA Blog October 30, 2008 for a description of that historic meeting.] Every country must be involved.

There is clearly a growing rage among the many countries, which had nothing to do with the creating the financial crisis, but are now facing the worst aspects. The expert panel confirmed this assessment. D'Escoto represents the aspirations of those nations.

June 1-3, 2009/ Now, June 24-26, 2009

Fast-forward to June 1-3, 2009, now June 24-26: Conference on the World Financial and Economic Crisis and Its Impact on Development.

This is the conference; a yearly conference held by the President of the General Assembly, that most of the G-192 has been looking forward to.

Don't think that this meeting is not being studied by the most right wing and neo-liberal forces who openly oppose the direction that d'Escoto is leading. But, first it must be kept in mind; he was elected by the General Assembly to this position. Everyone knew full well his direction. But, many probably hoped he would mellow his viewpoints once in office. He seems be have gotten more steadfast in protecting and fighting for the developing countries. The NY Times news article describes the struggle. It reads more like an editorial from the Heritage Foundation than an honest discussion of the UN upcoming meeting.

The postponement of the meeting was necessary given the sharp resistance to the direction of the General Assembly President. The preparatory documents were not incoming with the mandate, coming from the expert panel and the widening crisis, which he envisioned for the General Assembly

There are three documents that need to be studied as we more toward the Conference. I am including these full documents for readers to make their own judgments. Paraphrasing or editing of the Times article and the d'Escoto statement would be a mistake:

1. The New York Times article that attacked, quite aggressively, with a strong anti-communist feel, the direction of the General Assembly President;

2. Statement by President d'Escoto on the purpose of the Conference;

3. A background statement on the purpose of the Conference.



May 25, 2009

At U.N., a Sandinista's Plan for Recovery

UNITED NATIONS — The route out of the financial crisis — at least in the view of Miguel d'Escoto Brockmann, a ranking Sandinista and the fractious president of the United Nations General Assembly — should be lined with all manner of new global institutions, authorities and advisory boards.

How many? Nine, to be exact and they are (take a deep breath) the Global Stimulus Fund, the Global Public Goods Authority, the Global Tax Authority, the Global Financial Products Safety Commission, the Global Financial Regulatory Authority, the Global Competition Authority, the Global Council of Financial and Economic Advisers, the Global Economic Coordination Council, and the World Monetary Board.

Their formation was included in the agenda Mr. d'Escoto unveiled this month for a pending United Nations summit meeting on the economic crisis. But member countries were having a hard time reshaping his proposals into something workable. By the start of the weekend, the extended haggling had been reduced to whether the summit meeting, originally scheduled for next Monday through Wednesday, should be postponed until the end of June because no compromise agenda was in sight.

The problem boils down to competing visions of what role the United Nations should play in the global financial crisis.

Everyone basically agreed that the United Nations should serve as the voice of the poorest nations, and that its many tentacles provided an excellent source for collecting data on the impact of the meltdown. While most General Assembly members seek attention from existing global institutions for their economic distress, however, they are not agitating for a reversal of the institutions' market-economy bent.

To Mr. d'Escoto, a priest and former Nicaraguan foreign minister, the world financial crisis demonstrates the need for something closer to a revolution, both to mend the deep wounds opened by capitalist excess and to prevent future calamity.

He wants the General Assembly to be anointed the leader in reformulating the world's economic institutions. (The draft document suggested an open-ended process, steered by Mr. d'Escoto.)

"If the new financial system and architecture is going to be put together, and these rules of the game are going to affect everyone, as the crisis has affected everyone, the proposed solution and new rules of the game should be legitimate for everyone," said Paul Oquist, Mr. d'Escoto's senior adviser for the conference, and a Nicaraguan official. "It is the General Assembly that offers that in a universal vein."

Sitting beneath portraits of Fidel Castro of Cuba, President Hugo Chávez of Venezuela and President Daniel Ortega of Nicaragua, among others, Mr. Oquist also said that the meltdown of 2008 proved that no state or states had a monopoly on financial wisdom. That statement, at least, attracts a consensus here.

But Mr. d'Escoto's critics, and they are legion, accuse him of trying to Sandanista-ize the world or having serious delusions of grandeur. They say that proposals like levying an international tax on all financial transactions or replacing the dollar as the international reserve currency are well beyond the role of the United Nations.

A compromise document that eliminated many of the most radical changes is now under consideration, with few of the proposed global institutions surviving.

The diplomatic standoff started with a breach of etiquette: traditionally, before any conference, the General Assembly president appoints a couple of ambassadors as "facilitators" who consult widely and then propose a working document.

But this time, the plan, envisioning the United Nations in a supporting role, proved insufficiently sweeping for Mr. d'Escoto, so he tossed aside the entire draft and supplanted it with one of his own. To lend it an aura of respectability, his aides point out repeatedly that the president got many of his ideas from a distinguished panel of experts led by an American economist and Nobel laureate, Joseph E. Stiglitz.

Star-studded panels of experts clog the corridors around here, so nobody faults Mr. d'Escoto for that defense. But many ambassadors noted dryly that member countries were usually given the chance to discuss such recommendations before their insertion into official documents.

United Nations members had expected the conference to provide a role for not-so-rich nations in proposing solutions to the crisis, but several ambassadors said they had searched in vain for that amid the starring role for Mr. d'Escoto and his team. "The idea is to involve everyone in dealing with the problem," said Maged A. Abdelaziz, the Egyptian ambassador. "Too much is being asked of the Secretariat, and nothing from the member states."

2. STATEMENT BY UN General Assembly President d'ESCOTO

On Preparations for the United Nations High-Level Conference on the World Financial and Economic Crisis and Its Impact on Development

UN Headquarters , New York, 8 May 2009

Friends All,

I am very pleased to brief you all today on the preparations for the United Nations Conference on the World Financial and Economic Crisis and Its Impact on Development, scheduled for the first three days of June, and to present to you the first draft of the outcome document. The eve of the Conference is already upon us – 24 days away to be precise. We have been preparing for this historic event with remarkable intensity.

I wish to explain briefly what has been accomplished to date and appeal for your support and involvement in the few short weeks that we have ahead of us. Let us be united in our efforts to negotiate a powerful outcome document for the summit. And let us be proactive in urging our Heads of State and Government to become personally involved and turn this opportunity into the transformative moment it is meant to be in the history of the United Nations. The participation of all Member States at the highest level is indispensable for the transcendental gathering to achieve its full potential. I earnestly believe that this is an opportunity the world cannot afford NOT to take advantage of.

This United Nations conference – a global summit of world leaders – is highly unusual for a number of reasons. It is both timely and historic.

Unlike other UN conferences, we are organizing this gathering in record time, reflecting the need for a timely response to the financial and economic crisis that continues to unfold around us.

I understand that this has put a great deal of pressure on Member States, our UN colleagues and many other partners who are working overtime to ensure the success of the conference. But these are not normal times and the world expects us to respond with speed and decisiveness.

As you remember, at the beginning of this session of the Assembly last September, Member States emphasized the confluence of crises that now challenge the world – the perfect storm of climate change, food, water and energy crises, as well as the unfolding economic downturn.

Meanwhile, economic turmoil was darkening the world horizon. By the time of the Doha conference, the dimensions of the economic meltdown had become so alarming that Member States resolved to convene a conference at the highest level to address the crisis.

This was a historic decision that committed us to initiating a global conversation on the crisis, mitigating the impact on the developing countries, and addressing the reform of the international economic and financial architecture.

Since then we have worked hard to ensure that the scope of this conference allows for a full understanding of the various dimensions of the crisis and let us begin a serious discussion about revamping the international financial and monetary architecture.

In the search for solutions, many Members of the General Assembly welcomed my decision to establish a Commission of Experts on Reforms of the International Monetary and Financial System. Twenty experienced economists and central bankers from all regions of the world, under the very able chairmanship of Professor Joseph Stiglitz, the Nobel Laureate, have gathered five times since then to recommend very specific ways to address the immediate and long-term needs of a failing system.

When the Commission's recommendations were presented to the General Assembly in a three-day interactive thematic dialogue at the end of March, many Member States confirmed the value of the Commission's work by stating that they found it a useful as a comprehensive review of the many issues to be taken up in June and thereafter.

Although extremely important, the Commission's recommendations are, of course, not the only inputs received. In the past several weeks we have heard eloquent testimony and received numerous reports from Member States, from the President of the Economic and Social Council, from other UN funds and programmes, from the specialized agencies, and from civil society organizations and the private sector.

Organizing and synthesizing these many inputs has been a major challenge. Capturing the spirit of the moment is an even greater challenge, but one that we cannot escape.

The outcome document that leaders will adopt on June 3rd must reflect the aspirations, and not just the work agenda, of the Member States. In particular, it must speak to the hundreds of millions across the globe who have no other forum in which they can express their unique and often divergent perspectives.

It must reflect the call of many nations for new paradigms for building a sustainable economic life, one that integrates the values and the ethical imperatives that should guide our development. It must reflect the call for greater justice and inclusiveness in our global economic life, and it must reflect the passionate call for promoting the common good over the obsessive impulse to consume more and more, and to dominate others at any cost.

On Wednesday morning, I received the first complete version of a draft outcome document from the facilitators, Ambassador Frank Majoor of the Netherlands and Ambassador Camillo Gonsalves of Saint Vincent and the Grenadines. I want to express my deep appreciation for the work they have done so far. It is immediately evident that, while not having immediate access to all the inputs, particularly those provided by heads of state and government, they have been extraordinarily diligent in their efforts to prepare a document that fairly and accurately reflects the broad range of views of the membership. Theirs is, therefore, one of the most important inputs into the draft document that I am giving you today.

I believe that this conference needs to be seen not as an event in itself, but as an inflection point in a long-standing and continuous movement to strengthen the role of the United Nations in global governance. Thus far in the planning for June, we have agreed to eliminate the restrictions imposed under previous economic initiatives to limit the scope of our deliberations. That is a significant achievement in itself. But it will mean almost nothing unless we are able to organize an effective mechanism for carrying this agenda forward.

The business of this conference will not end on June 3rd because the commitments made, both here and elsewhere, will not have been completed on June 3rd. So it is vitally important that we define a follow-up mechanism that allows Member States to participate in the ongoing work.

A second consideration relates to the level of participation in the conference. I am certain that every Member State believes that the United Nations is and must be the place where the developing countries can speak in their own voice. But too often the United Nations itself speaks with the voice of the least common denominator consensus. Unfortunately, such a voice says little to the urgent needs of developing nations. If we can begin only with what is already agreed, it is difficult to see how this conference or any process that accepts such restrictions, can ever be appealing to people who clamor for change, or be conducive to real progress.

In recent weeks, I have been traveling extensively to meet with Heads of State and Government and other high-level officials. I can tell you in all honesty that I have tried my best in this draft outcome document to reflect the concerns and expectations that I have received in all these meetings. Now I am quite conscious of the fact that the first version of the document presented to the Member States will be the one that most world leaders will see.

I therefore think that it is fair to say that the draft outcome document that I am giving you today will be the basis on which heads of state and government will be deciding whether to take the June Conference seriously or to regard it as yet another international charade.

For the many, many nations who have so far been excluded from the multiple on-going forums and processes in which leading countries are crafting and negotiating their responses to the global crisis, language that sounds like business as usual can only confirm their exclusion. If the leaders of these nations do not recognize their concerns and perspectives in this first draft, knowing it will be subject to many compromises going forward, there will be little interest in participating in our meeting.

This is no way, in my judgment, to start a global conversation. I have accordingly introduced language that seeks to send an unmistakable signal that this conference truly is dedicated to understanding and responding to the perspective of the many "excluded nations." The only way to do that is to begin with language that truly reflects their concerns and aspirations. Because I come from such a nation, because I have dedicated my entire adult life to overcoming the exclusions of nations and peoples from their rightful participation in our common global life, I have felt responsible for doing all that I can to give expression to these views – which, of course, are also my own views.

I trust that Member States will understand that in the exercise of my judgment and role, I do not depreciate the very valuable work of the facilitators. I have taken on most of the structure they have proposed and I have also taken on board nearly all of their substantive points. I am personally grateful for the intensive efforts they have made.

If I have erred in my judgment in what is required to make this conference successful, then I accept this responsibility. But time and goodwill will determine the ultimate success of our common efforts. I pray that for the sake of all the world's peoples that we continue to work hard over the few weeks that remain to find our way forward.

Thank you.

3. BACKGROUND PAPER ON JUNE 1-3, 2009 [Now June 24-26]

UN Conference at the Highest Level on the World
Financial and Economic Crisis and Its Impact on Development, 1-3 June 2009 [Now June 24-26]


The United Nations is convening a three-day summit of world leaders from 1 to 3 June 2009, now June 24-26, at its New York Headquarters to assess the worst global economic downturn since the Great Depression. The aim is to identify emergency and long-term responses to mitigate the impact of the crisis, especially on vulnerable populations, and initiate a needed dialogue on the transformation of the international financial architecture, taking into account the needs and concerns of all Member States. The UN Conference on the World Financial and Economic Crisis and its Impact on Development will provide a uniquely inclusive forum to address issues of urgent concern to all nations.

Recent assessments of the impact of the ongoing economic crisis increasingly highlight the deteriorating social and political fallout in the least developed countries and middle-income countries as well. Prospects for an early recovery have faded, forcing countries to prepare for a prolonged downturn in trade, investment and employment.

In 2009 global economic growth has entered negative territory. Credit flows have dried up and major investment firms and lending institutions have been wiped off the map. Jobs are disappearing by more than a million a month, according to the International Labour Organization, and trade has dropped at the steepest rate since the Great Depression, the World Trade Organization observed.

A development emergency

The situation in the world's developing countries – which contributed least to the crisis and are most severely affected – has led some economists to warn of "lost decades for development" which could have catastrophic consequences for rich and poor countries alike.

After struggling with high prices for food, fuel and fertilizers as well as the effects of climate change, these countries face rapidly shrinking trade and export-import credits. Private capital flows to emerging economies this year are projected to be down by 82 per cent from the boom year of 2007, the Institute of International Finance says. The World Bank, which has described the crisis as a "development emergency", projects a finance gap of up to $700 billion in these countries, and the possibility of a "lost generation," with added deaths of 1.5 to 2.8 million infants by 2015. Over 100 million people are expected to be tipped into extreme poverty each year for the duration of the crisis.

UN Secretary-General Ban Ki-moon recently warned that the international community, "should not lose sight of the challenges and plight of hundreds and hundreds of million of the poorest people of the developing countries who have been impacted by this crisis." Middle income countries are increasingly affected by the downturn as well.

Conference at the highest level

The United Nations summit of world leaders in June was mandated at the Follow-up International Conference on Financing for Development, held in December 2008 in Doha, Qatar. Member States requested the General Assembly President Miguel d'Escoto Brockmann to organize the meeting "at the highest level". The conference will consist of plenary sessions and four interactive roundtable exchanges among world leaders and representatives of the United Nations system, including the World Bank and the International Monetary Fund, as well as civil society organizations and the private sector. The summit will produce an outcome document, a draft of which can be found on the Conference website.
The four Roundtables for examining and overcoming the world financial and economic crisis and its impact on development will address the issues of: 1) the impact on the crisis on employment, trade, investment and development, including the achievement of the internationally agreed development goals and the Millennium Development Goals; 2) actions and appropriate measures to mitigate the impact of the crisis on development; 3) the role of the United Nations and its Member States in the ongoing international discussions on reforming and strengthening the international financial and economic system and architecture; 4) contributions of the United Nations development system in response to the crisis.

The Conference on the World Financial and Economic Crisis and its Impact on Development brings to bear the full authority of the General Assembly, the only universal body of sovereign states. It is not a counter-measure or alternative channel to existing international fora on economic cooperation and financial regulations. Rather, it opens up a complementary and supporting process that brings with it the voice, and ultimately the buy-in, of all 192 UN Member States.

"We have an historic opportunity – and a collective responsibility --to bring new stability and sustainability to the international economic financial order," Assembly President d'Escoto declared recently. "This transformation – which could begin to narrow the North/South divide -- requires the involvement of all nations of the world. This is the meeting of the G-192."

To amplify the voices of all countries, rich, poor and middle income, and to clarify global thinking on the most far-reaching 21st century challenge to date, the General Assembly has held a number of timely interactive debates and consultations on the issues to provide inputs into the conference. These have served to develop a shared view of the scale, scope and impact of the crisis; to assess resource requirements and mobilization; and to review institutional roles and relationships among world bodies, especially within the UN system itself.

Inputs for Final Outcome Document

A commission of experts established by the President also submitted a score of preliminary recommendations on immediate and longer-term measures vis-à-vis the workings of the global financial system in March. Comprised of economists and finance officials from all regions and chaired by Nobel laureate Joseph Stiglitz, the Commission of Experts on Reforms of the International Monetary and Financial System highlighted a range of practical proposals for improving the international financial architecture in March. These and other inputs serve as the basis for the drafting of a conference outcome document, a draft of which can be found on the Conference website.