ECONOMIC AND SOCIAL COUNCIL HOLDS DIALOGUE ON GLOBALIZATION WITH EXECUTIVE SECRETARIES OF REGIONAL COMMISSIONS

ECOSOC
20 July 2001
Morning




The Economic and Social Council began consideration of regional cooperation efforts this morning, holding a panel discussion on globalization with the Executive Secretaries of the five United Nations regional commissions who contended that the opportunities presented by the expanding global markets came with risks and costs, including growing inequality and lowered Government control over domestic vulnerability to world-wide economic fluctuations.

In opening remarks, Danuta Huebner, Executive Secretary of the Economic Commission for Europe (ECE), said among other things that in the European continent, European integration and international cooperation were guarantors of peace and stability. The best response from the continent to global challenges was its European integration. The international community had a specific role to play, and that was where the work of the ECE came in. The regional character of this Commission was its main asset.

Kim Hak-Su, Executive Secretary of the Economic and Social Commission for Asia and the Pacific (ESCAP), told the meeting among other things that the Asian economic crisis of the mid-1990s had amply demonstrated that participation in global markets was by no means a smooth or equitable process.

Jose Antonio Ocampo, Executive Secretary of the Economic Commission for Latin America and the Caribbean (ECLAC), remarked that among the concerns about globalization in his region were that there was an ever-growing group of enterprises and workers left in a technological gap, job generation was limited, under-employment had grown significantly, and overall growth was slow -- 3.3 per cent in the 1990s, compared with an average of 5.5 per cent from 1945 to 1980. He said there was a need for an international agenda which paid good attention to correcting the asymmetries of the world's economies.

K. Y. Amoako, Executive Secretary of the Economic Commission for Africa (ECA), said that along with providing opportunities, globalization had fuelled various anxieties: concerns were felt about growing inequality; volatile short-term capital flows threatened financial crisis and instability; workers felt threatened by low-wage competition and new technology; Governments seemed less able to offer social protection; and competitive pressures could create the temptation to lower labour and environmental standards.

And Mervat Tallawy, Executive Secretary of the Economic and Social Commission for Western Asia (ESCWA), said problems of peace and stability affected the region and had discouraged foreign direct investment -- only 1 per cent of world foreign direct investment (FDI) came to the region and all of it involved the oil business -- and that such difficulties also had distorted the allocation of resources in the Arab countries. Nonetheless, she said, many countries were privatizing and carrying out infrastructure reforms.

Among questions asked from the floor were how the regional commissions themselves were responding to the issues raised by globalization and whether those commissions representing more economically healthy regions of the world intended to focus on the contributions they might make to African development efforts.

The Council will reconvene at 3 p.m. for a general debate under its agenda item on regional cooperation.


Statements by Panellists

DANUTA HUEBNER, Executive Secretary of the Economic Commission for Europe, said that when one thought about Europe today, one immediately thought of diversity. She furthermore observed that in countries with economies in transition, the strengthening of democracy was accompanied by a strengthening of their capacities. In the European continent, European integration and international cooperation were guarantors of peace and stability. The best response from the continent to global challenges was its European integration. The international community had a specific role to play, and that was where the work of the ECE came in. The regional character of this Commission was its main asset.

Mrs. Huebner said that in coming years, energy would be the principal issue on the programme of work for development policies in Europe. The ECE was doing its best so that the countries in transition had the necessary infrastructure which would allow them to save as much energy as possible.

KIM HAK-SU, Executive Secretary of the Economic and Social Commission for Asia and the Pacific (ESCAP), said the more industrialized East Asian economies had almost fully integrated into the world economy and had benefited enormously from globalization; South-East Asian countries had had a more mixed outcome; South Asian countries were relative newcomers to globalization and were not so far advanced in the process as was South East Asia; and the least-developed countries, Pacific island countries and economies in transition of the region remained largely marginalized.

There had been substantial increases in intra regional trade flows, Mr. Hak-Su said; these had grown as a percentage of total ESCAP trade from about 25 per cent in 1980 to about 45 per cent in 2000. Transnational corporations of developed countries remained the major source of foreign direct investment. Within the region there were significant transfers of technology and modernization of economies. Globalization had widened the opportunities for national development but also had brought risks, and the Asian crisis had amply demonstrated that participation in global markets was by no means a smooth or equitable process. Currently the economic downturn in the United States and Japan was a concern.

ESCAP helped to identify and consider various trade and investment policy options and strategies relating to the integration of developing countries of the region into international and regional trading systems, Mr. Hak-Su said. It also promoted a thorough understanding of the issues involved among senior policy makers of the region. In the context of regional trading arrangements, the Bangkok Agreement remained the first and only ESCAP region-wide trade agreement, and it recently had been acceded to by China. There also was a fairly recent Bangladesh-India-Myanmar-Sri Lanka-Thailand Economic Cooperation pact. Among its other work, ESCAP helped implement investment projects and provincial and regional levels with particular attention to attitudinal and procedural changes.

JOSE ANTONIO OCAMPO, Executive Secretary of the Economic Commission for Latin America and the Caribbean, said in recent years, there had been intense debate about the benefits that the new international order could bring to developing countries. The Asian crisis had dealt what was probably the most severe blow to expectations, as it was clearly demonstrated that globalization in the financial sphere, which was where it was most advanced, could be a source of profound macroeconomic instability unless an appropriate institutional framework was in place. The strong reaction of "global civil society" since Seattle revealed how much dissatisfaction there was with globalization in the industrialized world. There was increasing disenchantment with the process in developing countries as well, although the political manifestations of this were less organized, and the agenda had yet to be defined.

He added that during the 1990s, the region had enjoyed its best decade for export growth, exceeding all previous rates in the history of the region. There had also been an increase in foreign enterprises and foreign direct investment. But at the same time, there were structures that were less sophisticated than they were at previous stages of development. There was an ever-growing group of enterprises and workers in a technological gap. Job generation was limited, and under-employment had grown significantly. Overall growth was slow -- 3.3 per cent in the 1990s, compared with an average of 5.5 per cent from 1945 to 1980. There was a need for an international agenda which paid good attention to correcting the asymmetries of the world's economies. There were also monetary and financial asymmetries -- the world's currencies were the currencies of the most developed countries. The world agenda had to generate global public goods without generating the asymmetries.

He continued that there was a need for regional and subregional players on the global stage. The world had to give serious consideration to the principle of subsidiarity -- the nearness of governments had to be a principle to which wide-spread respect was given. The smallest countries also needed alternatives to international financial assistance. They needed help from regional and subregional financial operations. It was necessary to create the space for local authorities to operate.

K. Y. AMOAKO, Executive Secretary of the Economic Commission for Africa, said that through globalization per capita incomes had risen three-fold in the developing countries over the past century and six-fold in the developed countries, but African countries had not benefited from these gains and had been marginalized from the process. In addition to concerns about growing inequality, globalization had fuelled other anxieties: volatile short-term capital flows threatened financial crisis and instability; workers felt threatened by low-wage competition and new technology; Governments seemed less able to offer social protection; and competitive pressures could create the temptation to lower labour and environmental standards. Those countries that had not benefited from globalization tended not to have the structural and policy foundations in place to take advantage of more open trade, investment and financial flows.


The key for African countries, Mr. Amoako said, was to design strategies and policies to maximize the benefits of globalization while avoiding or minimizing the disruptive consequences to their societies and economies. Africa needed to consolidate macroeconomic stability by continuing to undertake sound fiscal and monetary policies including realistic exchange and interest rates, as well as maintaining an outward oriented trade and investment strategy. African Governments had to deepen and enhance reforms in the financial sector to mobilize savings, attract foreign capital and increase the efficiency of financial intermediation. There was a need to promote coordinated trade and industrial development, and to ensure the success of Africa's integration into the global economy, countries there needed to intensify efforts at mainstreaming regionalism into the development process; by moving ahead with the creation of an "African Union", the continent was taking a historic step to that end.

Internationally, Mr. Amoako said, future rounds of negotiations on trade needed to go beyond liberalization to address the broad development needs of Africa; official development assistance (ODA) needed to follow such principles as African ownership of visions and goals for development, provision of long-term and stable resource flows, and recognition of Africa's diversity; and the matter of debt relief needed to be further explored as a potential non-conventional source of financing public investment and poverty programmes which also could improve business confidence for private-sector financial flows.

MERVAT TALLAWY, Executive Secretary of the Economic and Social Commission for Western Asia, said what was particular for the Western Asia region was the problems it faced in peace and stability. It had discouraged foreign direct investment. Only 1 per cent of the FDI in the world came into the region. All of this investment was only in the area of oil. It had also affected the allocation of resources in the Arab countries. The economic boycott had also affected the economic and social performances of these countries. There were, however, several reforms. Many countries were privatizing and going under infrastructure reforms. Seven countries had joined the World Trade Organization. The annual growth of domestic product in the region was 4.7 per cent, but that was due only to the rise in oil prices. There were indications that education and literacy had improved in the region.

During its last session in May of this year, the Commission had agreed on an adopted agreement on international roads in the Arab Mashreq. This agreement formalized the Integrated Transport System in the Arab Mashreq, which linked the countries of the Arab region through a network of around 31,400 kilometres of roads extending along 13 axes from north to south, and 10 axes from east to west. It was expected to encourage trade and tourism and further integrate the Western Asia region in the global economy. The session equally adopted a number of important resolutions in the areas of water management, energy conservation and renewable sources of energy and the creation of a consultative committee on technology. The Commission was preparing a series of publications and organizing a number of workshops in preparation for the fourth Ministerial meeting of the World Trade Organization in Doha, in cooperation with the United Nations Conference on Trade and Development, the Arab League and the Union of Arab Banks. In view of the social, economic and political changes occurring worldwide, the regional perspective was becoming all the more important. The regional perspective was necessary for sound global action. It should constitute a basic premise when formulating both national and international policy.


Discussion

Among questions put to the panellists by national delegations participating in the debate were how the regional commissions were reacting to globalization; how they were modifying their roles to reflect globalization within their operations in the United Nations; how the regional commissions were relating "North-South" and regional economic questions; how the ECA was going to assist African countries to implement the United Nations Human Settlements (Habitat) Agenda; what the other regional commissions could do to aid Africa with its problem in finding sufficient resources for development; how the regional commissions coordinated with each other and how they managed coordination within their own sub-regions; how "results-focused" UN reforms had filtered down to the regional commissions; if the ECA had plans to help improve African road transport, including through trans-Sahara roads; if regional trade arrangements, if overemphasized, could exclude developing countries from arrangements involving more prosperous regions of the world; if there were any specifics yet to an ECLAC intention to promote "public goods" and better governance in the region; and how regional commissions dealt with great diversity of development among their Member States in order to ensure coherent programmes.

Responding to the debate, Ms. Huebner, ECE Executive Secretary, said the regional commissions did need to think about the world as a whole and how to respond to world-wide challenges; that each region was unique in terms of strengths and weaknesses and in terms of how it could respond to global forces; that the regional frameworks should be seen as a way of helping nations to respond to the negative forces of globalization but also, and just as importantly, to respond to globalization's positive effects and to the opportunities it presented; that one method of linking regional perspectives to global matters would be through sharing good practices; that more interregional projects should be undertaken; and that an upcoming ECE conference in Germany on aging was expected to result in steps to implement global objectives established on the matter.

Mr. Hak-Su, Executive Secretary of ESCAP, said among other things that there had been a regional preparatory meeting in August of last year on financing for development, and ESCAP had provided funding for Pacific island countries' participation in that meeting and had fully incorporated their concerns in the outcome of the meeting; that ESCAP was a large regional commission and paid a great deal of attention to sub-regions; that the Bangkok Agreement was compatible with World Trade Organization standards but was not a free-trade agreement but rather a preferential trade pact; that ESCAP was studying the results-oriented approach adopted by the UN headquarters and was intending to apply it regionally; and that ESCAP was contacting the private sector in relation to the UN global compact with the private sector.

ECLAC Executive Secretary Mr. Ocampo said among other things that ECLAC was very concerned about the vulnerability of small States to the forces of globalization, since the region had a significant number of small countries; that the archipelago character of many of these States raised special concerns relating to infrastructure, transportation, and vulnerability to natural disasters; that ECLAC was very attuned to short-term matters owing to the marked deceleration in the economies of the region in response to the United States market decline; that ECLAC had long discussed -- since it was often put on the table -- the question of differences in development of member countries; that a specific advantage of sub-regional processes was that they could take such diversities in development into account; that negotiations were ongoing on integration of the Andean Pact with MERCOSUR; that such negotiations had to go beyond mere trade in goods and services to cover greater issues of cooperation such as those carried out by the European Union; and that concepts of "public goods" and good governance and the "social agenda" of United Nations work were more and more a matter of focus both regionally and globally.

Mr. Amoako, ECA Executive Secretary, said the ECA did collaborate with all UN agencies and dealt the global matters in numerous matters, but always respected the mandates involved; that discussions had been held with Habitat about joint activities and that such consultations were expected to continue and to lead to specific results; that ECA did have a sustainable development division that handled matters of human settlements as part of its work; that absolute amounts of investment going to Africa were low, it was true, but when looked at as a portion of the GDPs of African countries, they came to about the same proportion as in Latin America; that, on the other hand, investment flows went disproportionately to a few African countries and tended to focus on resource extraction, mainly oil and diamonds; that the private sector ultimately would be the economic salvation of Africa, but it was clear that a great deal had to be done to set the conditions that would attract private sector financial flows, and it was clear that a number of these conditions could only be dealt with regionally; that the ECA took transportation matters seriously and a meeting of African transportation ministers was scheduled for next year to discuss, among other things, the low rate of implementation of previous transportation agendas; that the World Bank, European Commission and other partners were helping with a sub-Saharan transport programme; and that the importance of developing the industrial sector in Africa was deeply realized.

And ESCWA Executive Secretary Ms. Tallawy, said among other things that the regional commissions were perhaps doing more than was generally known related to globalization and other matters but also could and should expand their efforts; that perhaps in future the regional commissions could provide the Council with statistics and related information on success stories from their regions; that locating additional resources, including extra-budgetary resources, was a good idea and could lead to the regional commissions doing more than they could do now with their current resources; that ESCWA cooperated with the Arab League and other groups of countries within the region in formulating their policies or helping them in such matters as negotiations for joining the World Trade Organization; that regional efforts were made to follow up to international conferences, such as in response to the environmental goals set by the "Rio Plus 10" conference; that a great deal of attention was being paid to how countries could manage domestic debts; that ESCWA focused, as did other UN agencies, on results and results assessment; and that by attempting to promote regional integration, ESCWSA was attempting to reduce regional disparities in development and economic performance.



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