27 October 2005

Managing Inequalities of Globalization a Core Concern in Meeting Challenges of Development, Second Committee Told

Delegates Hold Interactive Discussion on Globalization, Interdependence with Heads of United Nations Regional Commissions

NEW YORK, 26 October (UN Headquarters) -- Managing globalization and the resultant inequalities had become a core concern in meeting development challenges, Kim Hak-Su, Executive Secretary of the Economic and Social Commission for Asia and the Pacific (ESCAP), said this morning as the Second Committee (Economic and Financial) held an interactive dialogue with the heads of the United Nations regional commissions.

Introducing the topic, "Globalization and interdependence", Mr. Kim, the current Coordinator of the regional commissions, pointed out globalization's mostly uneven effects within and across countries, and stressed the importance of coherent policies and institutional support at the national, regional and global levels in promoting sustained development.

There were also differences across regions, he said.  In Asia, international migration, for example, was mainly for purposes of short-term labour, while in Africa it was often forced or labour-related.  In Europe, nations were increasingly concerned about asylum-seekers, while traditional destination countries, such as Canada, Australia and the United States, had continued to admit people for permanent settlement.  Internationally, migration was increasingly viewed as a pressing global issue.  While no single entity had a mandate to work on the full spectrum of issues, the United Nations had helped to foster intergovernmental dialogue through conferences and meetings, as well as the formulation of global norms.  The General Assembly would hold a high-level dialogue on migration during its sixty-first session next year, which would be the first of its kind.

Elaborating on the role of regulatory and institutional frameworks in the globalization process, Paolo Garonna, Officer-in-Charge of the Economic Commission for Europe (ECE), said Governments often struggled to strike the right balance between good regulation and overregulation.  However, because the quality of a given country's regulatory environment was linked to development -- including economic growth, improved health measures such as higher life expectancy, poverty reduction, improvements in education and an increased sophistication of the knowledge society -- regulatory reform should be at the heart of the globalization process.

Regional commissions had a role to play in facilitating "soft regulation", such as benchmarking and peer-review mechanisms, he said, noting also the growing role of civil society and the private sector in regulatory reform, as well as the increasing role of self-regulation.  Those developments were all indications of a well-functioning market economy.

Addressing the question of risks, challenges and possible scenarios for the conclusion of the Doha Round, José Luis Machinea, Executive Secretary of the Economic Commission for Latin America and the Caribbean (ECLAC), said that an inconclusive meeting would severely handicap the multilateral system, paving the way for a chaotic network of bilateral and regional systems.  The main challenge was adapting to the rise of competition from China and other parts of Asia.  Also, agricultural issues were central, with 70 to 80 per cent of the benefits for developing countries expected to come from the elimination of non-tariff barriers in that area.  While developed countries would rather "discuss other things", the United States and the European Union were slowly changing their attitudes, as demonstrated by Washington's recent proposal to eliminate all agricultural subsidies.

Discussing the impact of instability on addressing the challenges of globalization, Mervat Tallawy, Executive Secretary of the Economic and Social Commission for Western Asia (ESCWA), said that region was plagued by problems of collective security, with the main source of instability being the Arab-Israeli conflict, civil strife in Iraq, and political tension between Lebanon and Syria.  Strengthened institutional capacity, coupled with modern legislation, would enable the region to seek greater access to markets, increased productivity levels and economic competitiveness.  To that end, peace initiatives must be pursued if the region was to be an active partner in the world.

She said ESCWA had managed to facilitate a series of transport-related agreements among the Arab Mashreq States, covering 3,600 km of shared roads, as well as railway and maritime transport.  The Commission also provided a policy framework to safeguard the region's water resources and deal with the shared use of an electricity grid and gas pipelines between Member States.

Speaking about the costs and social aspects of globalization, Josephine Ouedraogo, Acting Deputy Executive Secretary of the Economic Commission for Africa (ECA), said globalization had failed in Africa due to major domestic constraints, as well as international biases, including trade barriers in the European Union and United States.  Liberalization had exposed workers in formerly protected industries to unemployment and poverty.  The share of the working poor -- those earning less than a dollar a day -- stood at 56 per cent.  Other impacts of globalization included income volatility and insecurity; the brain drain, which had led to low productivity and a lack of health-care skills; child and forced labour; environmental degradation; and the deterioration of working conditions in the agricultural and informal economy sectors.

Africa was ill-prepared for globalization with its weak institutions, poor infrastructure, and low levels of social and human capital, all driven by ineffective policies, she said.  World trade in manufacturing goods had increased sharply over the past decade, while trade in raw materials had more or less stagnated.  To minimize globalization's social costs, Governments should encourage investments in labour-intensive sectors to generate jobs; target training, so as to ensure that people had the right skills; take short-term measures that would provide a safety net during periods of adjustment; and create some form of social insurance to protect poor households from income drops and risk.

In the ensuing discussion, delegates raised the point that foreign direct investment (FDI) was still lacking in some developing countries despite having undertaken reform.  Mr. Garonna responded by saying that in cases where national reforms affected global activities, only profitable changes should be considered.  Supportive global and regional environments were necessary to help those Governments "put their houses in order".

Answering a question about the types of regulations that could promote economic growth and improve the effectiveness of self-regulation, he said reforms in the area of good governance and education, for example, would be helpful in that regard.  Labour and welfare reforms were also important, particularly in the creation of social safety nets.  In addition, Governments should be proactive in introducing accountability and transparency mechanisms.

In response to a question about the World Trade Organization's (WTO) focus on agriculture, Mr. Machinea said the sector was being discussed at the expense of other areas that were also important.  However, an agreement would be needed on agriculture before the Organization could proceed to other areas.

Regarding a possible loss of WTO credibility, especially if the Doha Round negotiations failed in Hong Kong, he said that a weakening of that institution would be a major problem for the multilateral trading system, which had worked well for the last six decades.  If the current round could not be saved, the international community would shift to more bilateral agreements, which would increase the costs for all in terms of administration, as well as ease of negotiation.  Without a common negotiating table, developing countries would be more constrained to follow developed-country agendas.

To a query about development and conflict, Ms. Tallawy said that ESCWA had carried out training courses in Beirut for Iraqis drafting the country's constitution.  It had also helped the Palestinian Authority decide on its development priorities, rather than leaving them to the international community.  At the Palestinian Forum in 2004, for example, several United Nations agencies, as well as the donor community, had focused on the development choices of the Authority itself.

On the private sector in Africa, Ms. Ouedraogo said that private African companies had invested in areas with the highest rate of return, to the detriment of those with more sustainable levels of income.  For example, the construction sector was popular, though it would not necessarily foster development or benefit the active population.  Government institutions, as well as the banking sector, should help to ensure that the private sector invested more in areas of longer-term benefit.

In his introductory remarks, Committee Vice-Chairman Juraj Koudelka (Czech Republic) said that in order to foster fairer globalization, steps must be taken to better manage it at the national, regional and international levels.  A comprehensive approach was needed that took the social and environmental dimensions of globalization into account alongside its economic dimension.

The Second Committee will meet again at 10 a.m. tomorrow, Thursday, 27 October, to begin its consideration of permanent sovereignty of the Palestinian people in the Occupied Palestinian Territory, including East Jerusalem, and of the Arab population in the occupied Syrian Golan over their natural resources.  It is also expected to hear an introduction of a draft resolution relating to humanitarian assistance and reconstruction and to begin its discussion of globalization and interdependence.

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