ECOSOC/6208
3 July 2006
Economic and Social Council Opens 2006 Substantive Session
Keynote Statements Focus on "Working Out of Poverty"; Policy Discussion on Important Developments in World Economy Held
(Reissued as received.)
GENEVA, 3 July (UN Information Service) -- The Economic and Social Council began its 2006 substantive session this morning, opening its high-level segment with addresses by the President of the Council and the Deputy Secretary-General of the United Nations. A series of high-level dignitaries gave keynote statements on the theme of "working out of poverty". Subsequently, a policy dialogue was held on important developments in the world economy and international economic cooperation with heads of financial institutions.
Addressing the Council, Ali Hachani, President of the Council, said ECOSOC was well placed to advance integration and coordination of efforts towards implementation of the development agenda. The Council needed to verify how it could contribute to the work of the United Nations Organization, including in the context of natural catastrophes and humanitarian crises.
Mark Malloch Brown, Deputy Secretary-General of the United Nations, said the Council had always been the United Nations' principal body for advancing policy, and today it had the Millennium Development Goals, which were an opportunity for the Council to rally around a concrete set of achievable goals and targets. It was up to the Council to have these benchmarks and the broader United Nations development agenda to motivate its work.
Providing keynote statements were the Prime Ministers of Pakistan, Norway and Mozambique, the Minister of Labour and Youth Employment of Tunisia, and the Director-General of the International Labour Office
Shaukat Aziz, Prime Minister of Pakistan, said the existence of poverty in the midst of global prosperity was undeniably the most serious challenge confronting the world today. There was no greater challenge to humanity or to the international order than the failure to realize the United Nations' vision of promoting "better standards of life in larger freedoms".
Jens Stoltenberg, Prime Minister of Norway, said the United Nations was not only an arena for norms and common solutions to common problems, but also an agent for peace, development, human rights and dignity at the country level. The most radical decision one could make about the United Nations and how it should be organized was to decide that one would not change it.
Luisa Diogo, Prime Minister of Mozambique, said employment should be seen as the key to the commitment to the realisation of the Millennium Development Goals, and the basis for economic empowerment. The broad goals of sustainable development called today for a wide range of partnership between the United Nations, society as a whole, and Governments, so as to drive countries on the path of sustainable growth and improvement of the situation for all people.
Chadli Laroussi, Minister of Labour and Youth Employment of Tunisia, said promoting employment and fighting poverty in the world was one of the major challenges facing the international community in the current situation. The world reality required ever more awareness of phenomena throughout the world: a resurgence of unemployment, poverty and marginalisation within poverty, which required a comprehensive view taking into account all the economic and social aspects of the problem.
Juan Somavia, Director-General of the International Labour Office, said the world was facing a global jobs crisis that called for a global response. Prevailing policies in the last decades had tended to consider job creation as an outcome of macro policies, rather that a specific objective in itself. Yet, when problems emerged and crises appeared, labour was the main adjustment factor.
The high-level policy dialogue on current developments in the world economy and international economic cooperation was moderated by Jose Antonio Ocampo, Under- Secretary-General for Economic and Social Affairs of the United Nations, who, in his presentation, said the World Economic Survey's recent findings provided new and meaningful insights in light of the more recent debates on economic development, and advanced a strategy for reducing international economic divergence, centred on an assertive but flexible agenda for domestic development, facilitated by international cooperation and rules that guaranteed the appropriate policy space for developing countries.
Supachai Panitchpakdi, Secretary-General of the United Nations Conference on Trade and Development, said the upswing of the world economy had brought about a major improvement in the living standards and the employment situation of hundreds of millions of people in developing countries, however, this undeniable economic success should give rise to caution regarding possible negative repercussions of a major imbalance in the global economy.
Valentine Rugwabiza, Deputy Director-General of the World Trade Organization, said if they were unable to bring the negotiations to a successful conclusion this year, the chances of a global deal on the scale envisaged by the Doha Round would be impossible for the foreseeable future. Developed countries would lose an opportunity to reform policies that distorted and constituted a barrier to global trade and global growth, and developing countries would lose a once in a generation opportunity to open world markets for their exports and to redress imbalances in global trade relations.
Francois Bourguignon, Chief Economist and Senior Vice-President of the World Bank, said the gap in Millennium Development Goals was often pronounced. Vigorous and ambitions national development strategies should be formulated in low-income countries, and they should be articulated around poverty-reduction strategies and the Millennium Development Goals.
Reinhard Munzberg, Special Representative of the International Monetary Fund to the United Nations, said actions to bring about a gradual reduction in balances were needed. The most effective way that the Fund could help low-income countries achieve their development goals was by focusing on policies and economic institutions that were critical to economic and financial stability and growth, and that fell within its core competencies.
Kim Hak-Su, the Executive Secretary of the United Nations Economic and Social Commission for Asia and the Pacific, said the past few years had been a golden period of high growth, which had been widely shared across developed and developing countries across the countries of the regional commissions. However, high growth was not contributing enough in the fight against poverty, and nearly one sixth of the world's population still lived in extreme poverty.
At the beginning of the session, the Economic and Social Council adopted the agenda for the session, and agreed to hear statements from non-governmental organizations under item 2 of the agenda, entitled "creating an environment at the national and international levels conducive to generating full and productive employment and decent work for all and its impact on sustainable development".
The next public meeting of ECOSOC will begin at 9:30 a.m. on Tuesday 4 July, when the Council will hold a general debate on creating an environment at the national and international levels conducive to generating full and productive employment and decent work for all, and its impact on sustainable development.
Opening Statements
ALI HACHANI (Tunisia), President of the Economic and Social Council, said this year's substantive session was the first since the 2005 World Summit, at which world leaders had unequivocally reaffirmed their determination to ensure the full and timely realisation of the internationally agreed development goals, including the Millennium Development Goals. Comprehensive national development strategies for achieving development objectives had been announced. It would only be possible to progress if the world worked in partnership. The United Nations could support Governments in their efforts, and would do so more effectively once strengthened and reformed. The Council was well placed to advance integration and coordination of efforts towards implementation of the development agenda. By bringing together policy makers, the ministerial review would help to ensure that all parties were working in sync to help improve the situation of billions of people.
The forum was a major leap forward for enhancing the impact of the global development agenda, and would promote alignment between the realisation of that agenda, and corporations. The performance of all parties involved and the flow of resources would be enhanced. The Council needed to verify how it could contribute to the work of the United Nations Organization, including in the context of natural catastrophes and humanitarian crises, including the avian flu epidemic. The Council had demonstrated that it was a unique forum to promote an integrated approach to post-conflict peace building, and this was essential for attention to be focussed on reconstruction and institution building.
It was critical for the success of the new functions of the Council that all parties involved participated actively in the running of events. The crucial link between poverty and social integration had been recognised. In the context of shifting pressures created by globalisation, the employment challenge was as important for developed and developing countries, and the high expectations that had been raised by the World Summit had to be responded to effectively. The determination to create strategies at the national and international levels had to be created in order to respond to these employment challenges. This was an opportunity to come up with specific ideas and recommendations which would have a real impact on the people whom the Council served.
MARK MALLOCH BROWN, Deputy Secretary-General of the United Nations, said this was an important date on the calendar. It was a time of challenge and renewal for the Organization, and events of the recent years had not only highlighted the failings of the international system, they had galvanised change. Today it was the other pillar of the United Nations system which would be focussed on: development. Clean drinking water remained out of reach, and environmental degradation made soils incapable of supporting the basic needs of families. This required a strong response from the United Nations, and the Economic and Social Council should lead the way. The Council had always been the United Nations' principal body for advancing policy, and today it had the Millennium Development Goals, which were an opportunity for the Council to rally around a concrete set of achievable goals and targets. It was up to the Council to have these benchmarks and the broader United Nations development agenda to motivate its work.
The Economic and Social Council had a chance to play a pivotal role in the lives of people across the world. The Council should be the political and policy forum for tracking the progress towards the Millennium Development Goals. It was already preparing for important changes, including the introduction of annual ministerial reviews. Change could make the Council the development parliament of the United Nations. Its members should review progress, correct setbacks, hail advances, and urge future reform so as to keep the world on track for 2015.
People aged 15-24 were only a quarter of the world's working population, but they constituted half of the unemployed, working longer hours for less pay and little job security. With approximately 1.2 billion people worldwide joining the world of employment over the next decade, the situation required significant attention. The children of the new Southern middle class, finding that growth had not created jobs, and their young counterparts in the North were equally powerless due to various issues, including structural, and youth employment contributed directly to stability in society. A variegated response was required. Employment-oriented growth strategies, training, education, and new job creation was a solution. Once young people had some experience, their chances of finding new and further employment increased dramatically. Any comprehensive youth strategy should also address the disadvantaged situation of certain groups.
Keynote Statements on Theme "Working Out of Poverty"
SHAUKAT AZIZ, Prime Minister of Pakistan, said the world had seen historic progress during the last decade in many countries and regions, yet a large part of the world's population continued to be at the margins of subsistence. Illiteracy, malnutrition and disease continued to command a large segment of humanity to perpetual poverty. The existence of poverty in the midst of global prosperity was undeniably the most serious challenge confronting the world today. Going forward in the third millennium, the sobering array of other challenges that one faced ranged from supply of assured and reasonable priced energy to ensuring adequate water reservoirs, global warming, food security, vulnerability to natural disasters, threat of pandemics, terrorism, proliferation of weapons of mass destruction and digital divide. Nevertheless, there was no greater challenge to humanity nor to the international order than the failure to realize the United Nations' vision of promoting "better standards of life in larger freedoms".
The world's vibrant economies today were justifiably concerned with the imbalances in global trade, budget deficit, rising oil prices and fluctuating currencies. There were signs of global economic fragility. Those imbalances also affected, perhaps most acutely, the poorest and most vulnerable peoples. Yet, there was a great opportunity within the collective gap -an opportunity that was indeed historic and presented itself only rarely during lifetime. The world had, perhaps for the first time in history, the collective capacity to end hunger and poverty, realize the promise of universal prosperity, save succeeding generations from the scourge of war and promote social progress. Today, one had the vision of a world where the poor for once not only dared to hope and dream but also saw and felt positive changes in their lives.
Over the last seven years, Pakistan had undergone a qualitative transformation achieved through broad-based home-grown structural reforms encompassing all areas of the economy, social sectors, governance and development. Those reforms were rooted in national ownership. Pakistan today was one of the fast growing economies in Asia. Pakistan was fast emerging as the destination of choice by investors because of the liberal investment policy and low tariff regime and this year, it received the highest-ever foreign private investment since its independence. Better credit rating and improved debt profile had made its paper highly attractive in the international capital markets. Pakistan's economic performance was especially satisfactory when assessed against the backdrop of the rising energy prices and the massive destruction caused by the 8 October 2005 earthquake. Pakistan was proud of the achievements made over the past seven years to ensure prosperity and socio-economic progress for its people.
JENS STOLTENBERG, Prime Minister of Norway, said Norway was fortunate to have a prosperous economy and almost full employment. The greatest product Norway had developed was the welfare State. One of the world's most equitable, secure, competitive and innovative welfare States. And that was not only a question of having sufficient financial resources available. Norway became prosperous because it developed the welfare State. The greatest gains countries could achieve economically as well politically came with empowering women, ensuring equal opportunity, health care and increasingly the ratio of women's active participation in working life. In the 1970s, Norway had one of the lowest rations of women's employment in Europe. Today, it was one of the highest. It came as a result of systematic policy changes aimed at empowering women and giving them more equal opportunity. And those countries that managed to overcome excising cultural impediments to such policies were going to grow and prosper.
Children were the future. It was unnecessary and unacceptable that a child died every second, that more than 26,000 children died every day, and that more than 10 million children died every year. Vaccines available could have saved those children today. Norway would contribute 1 billion dollars to vaccines and immunization through 2015. The United Nations was not only an arena for norms and common solutions to common problems, but also as an agent for peace, development, human rights and dignity at the country level. The world of today was different from the world when the UN was created. The United Nations tool had changed, but one saw a United Nations with a growing gap between what was expected of it, and what its resources permitted it to do. The United Nations should be brought up to date. The most radical decision one could make about the United Nations and how it should be organized was to decide that one would not change it. Norway was the staunchest supporter of a strong and effective United Nations.
He regretted that the trade negotiations did not succeed last week here in Geneva. But there was a binding global regime for trade and with effective dispute settlement and sanctions. Agreement was not reached on a similar regime to ensure the promotion and protection of human rights and decent work for all. The rules, which had been developed to ensure protection of the environment, were particularly fragmented; and the enforcement mechanism was weak. One should not run the risk that competition for trade and investment undermined the ability to promote the common good. Social dumping was the antidote of unchecked globalisation. Thus, a truly comprehensive agenda to generate full and productive employment and decent work for all, with a positive impact on sustainable development, would require comprehensive governance at both the national and global levels.
LUISA DIOGO, Prime Minister of Mozambique said the adoption of the Millennium Development Goals in 2000 had highlighted the need for an integrated and broad approach to international issues such as the scourge of poverty by giving equal weight to poverty, security, and the international development agenda. Thus, creating an international environment conducive to development should be addressed at the level of national, international and regional efforts to reduce poverty. Agriculture remained the most important sector in Africa, with many Africans being heavily dependent on this sector of the economy for their incomes. As such, until and unless income and poverty levels in agriculture were improved, most African countries were unlikely to emerge from their current situation.
Agriculture was a sector which could have a meaningful role in providing employment. In this sense, employment played a crucial role in poverty reduction, gender equality, and social inclusiveness. There was a need for an integrated approach for an economic and social policy. Employment should be seen as the key to the commitment to the realisation of the Millennium Development Goals, and the basis for economic empowerment. In order to focus on employment issues in the development process, it was important to have a clear idea of the population in each country, and the large experience of the United Nations and its universality were critical in aiding each State to design policies and monitor their implementation. It was also important to have a clear understanding of the concepts of employment, the formal sector, the family sector, subsistence farms, and other issues.
In Mozambique, she said, the five-year poverty reduction programme had been advanced through three pillars including an employment programme, infrastructure, issues related to private sector development, good governance, judicial reform, and the fight against corruption. Several challenges remained, and some concrete questions were addressed; and here the United Nations system's role was crucial in embracing the agenda of developing countries. The broad goals of sustainable development called today for a wide range of partnership between the United Nations, society as a whole, and Governments, so as to drive countries on the path of sustainable growth and improvement of the situation for all people.
CHADLI LAROUSSI, Minister of Labour and Youth Employment of Tunisia, said promoting employment and fighting poverty in the world was one of the major challenges facing the international community in the current situation. The world reality required ever more awareness of phenomena throughout the world: a resurgence of unemployment, poverty and marginalisation within poverty, which required a comprehensive view taking into account all the economic and social aspects of the problem. Concerted efforts by the international community to have a more effective solidarity throughout the world in order to overcome disparities among people and uphold an international partnership based on understanding and cooperation were cornerstones set by the Millennium Summit.
Based on dialogue and solidarity, responsibility was shared for a world economy based on justice and fairness. Implementing the Millennium Development Goals to fight unemployment and poverty required a realistic long-term strategy, with a coherent vision to implement the efforts of the international community for the development of employment to assist the young and provide opportunities for integration into decent productive work. It was time to translate objectives into action. The assistance to fight poverty should be stepped up to 0.7 per cent of GDP in industrialised countries. The United Nations was the organization which could implement development objectives throughout the world, and encourage the international community to take initiatives to support employment in poor and developing countries.
Tunisia had worked to improve the situation of its people, and had achieved very encouraging economic and social results, with a 5 per cent growth in the economy over the last decade. The level of poverty had been restricted, with only 4 per cent of the population living in poverty, increasing stability and social cohesion. Analyses carried out by the United Nations had emphasised the progress that Tunisia had made. Employment was extremely important as a fundamental component of human rights policy, and was a vital component of the dignity of the individual and of stability within society. Solving the unemployment problem was not just a question of achieving good levels of economic growth, but of the quality of that growth. Creating a knowledge-based economy and communications economy was the best way in promoting development and reducing gaps between States.
JUAN SOMAVIA, Director-General of the International Labour Organization (ILO), said that decent work was one of the basic needs in the life of people. Too often, a need that went unsatisfied. The world was facing a global jobs crisis that called for a global response. There had been more than a 20 per cent increase in official unemployment in the last 10 years and the accompanying growth of informal work; and there would be 430 million net increases in the global labour force in the next ten years. Youth in all countries knew well that the world was not coping with the problem. What should be done to change the disappointing job creation record of recent years and move to a growing strategy, which would favour employment rich, pro-poor sustainable development and would build a fair globalization. Prevailing policies in the last decades had tended to consider job creation as an outcome of macro policies, rather that a specific objective in itself. Yet, when problems emerged and crises appeared, labour was the main adjustment factor. The real life effect of these trends was that the dignity of work had been devalued.
The diversity of work was almost infinite, but all countries had decent work challenges. Solutions varied, however there were some common elements of a policy framework -- productive employment and enterprise development, social protection, labour standards and social dialogue -- with gender equality crosscutting all issues. All of them needed to be reinforced, respecting the specificities of very diverse national realities. That was why real respect for national ownership was so important. Work required a coordination of efforts, which was most effectively achieved through dialogue. One needed to strengthen the cooperation between employers' organizations, trade unions and Government-tripartism. It was a widely used and successful institutional practice for finding consensual and differentiated solutions to a wide variety of labour market issues.
As the Secretary-General said in Vienna a few weeks ago with respect to policies, one should have "an institutionalized reflect which constantly asks what can this do for jobs". The ILO, as the world's decent work agency, had a major responsibility in developing that responsibility. And the ILO had oriented its strategic policy framework to focus on progressively making the global goal of decent work a national reality. The four pillars of a decent work strategy - jobs, rights, social protection and dialogue - crosscut by the common themes of gender equality and development, constituted the drawing board for the ILO's new decent work country programmes. Those programmes were an ILO delivery mechanism for the range of its technical cooperation and policy advice activities.
World Economic and Social Survey 2006
The World Economic and Social Survey 2006: Diverging Growth and Development (E/2006/50) says that by many measures, world inequality is high and rising. The main reason is that in the industrialized world the income level over the last five decades has grown steadily, while it has failed to do so in many developing countries. Not more than a few developing countries have been growing at sustained rates in recent decades, but these include, most notably, the world's two most populous countries, China and India. Considering that these two countries alone account for more than one third of world population, inequality across the globe is beginning to decline. When these countries are left out, however, international income inequality is seen as having continued to rise strongly from already high levels. The World Economic and Social Survey 2006 focuses on the causes and implications of the income divergence between countries.
Success in development depends both on country efforts and on an appropriate international environment. Greater income divergence is partly explained by a rising number of growth collapses. Countries with weak economic structures and institutions and low infrastructural and human development have less capacity to gain from integrating global markets. Such conditions make it more difficult for developing countries to grow out of poverty and reduce their vulnerability to global shocks. Hence, the greater the likelihood of growth collapses and conflict as global inequality rises. The problem of rising global inequality thus has an important bearing on the implementation of the United Nations development agenda. Failure to redress the tendency towards growing global inequality could thus have wide-ranging consequences for human development.
Statements on Important Developments in the World Economy
JOSE ANTONIO OCAMPO, Under-Secretary-General for Economic and Social Affairs of the United Nations, said the world economy had performed well this year. Some moderation in global growth was expected, however, in the second semester of 2006. This reflected a number of downside risks which had heightened recently, as partly seen in the increase of volatility in global financial and commodity markets over the past two months. At the same time, the rapid and fairly broad growth of the developing countries, undoubtedly the most positive global economic trend in recent years, persisted. The solid growth figures of developing countries reflected a very favourable international economic environment. Among the elements that made up this environment, first was debt relief for some of the world's poorest countries, and the increased commitments in relation to official development assistance.
To maintain a solid, broad-based and stable world economic growth, there was a need for more international cooperation to address these risks. Despite the improved breadth of performance by developing countries, both recent and past experience indicated that some of the currently favourable conditions tended to be highly volatile. The World Economic Survey's recent findings provided new and meaningful insights in light of the more recent debates on economic development, and in this sense, it helped to explain why the conventional strategy followed since the 1980s for closing the income gap between the developing and developed worlds had been only partially effective. Based on its findings, the Survey advanced a strategy for reducing international economic divergence, centred on an assertive but flexible agenda for domestic development, facilitated by international cooperation and rules that guaranteed the appropriate policy space for developing countries.
SUPACHAI PANITCHPAKDI, Secretary-General of the United Nations Conference for Trade and Development (UNCTAD), said the recovery in the world economy that started in 2002 continued unabated. The upswing of the world economy had brought about a major improvement in the living standards and the employment situation of hundreds of millions of people in developing countries, however, this undeniable economic success should give rise to caution regarding possible negative repercussions of a major imbalance in the global economy. In many respects, developing countries had been the pace setters for this success story. Since 2003, the terms of trade of many developing countries had experienced sizeable changes, with substantial gains in countries specialised in extractive industries and drastic losses in those depending on exports of manufactures and imports of raw materials, especially oil.
Despite the relatively favourable evolution of the terms of trade of many developing countries, the UNCTAD view was that complacency should be avoided. One of the most important challenges for national policy makers and for the international community was to warrant a fair distribution of the rent arising from primary productions and its proper use in financing development. The correction of the global imbalances should not be deflationary if the momentum towards meeting the Millennium Development Goals was to be maintained. There was a striking asymmetry in existing multilateral arrangements between trade on the one hand, and monetary and financial relations on the other. UNCTAD was convinced that support for trade-related capacity building in developing countries was needed, regardless of the outcome of the Doha Development Agenda.
VALENTINE RUGWABIZA, Deputy Director-General of the World Trade Organization (WTO), recalled that last week, ministers had gathered in Geneva to try to bridge the gaps on three key pillars of the Round: agriculture subsidies and tariffs and industrial goods tariffs. Regrettably, they failed to narrow their differences on those key issues. The result of those discussions was clear, there had been no progress and therefore there was a crisis. That was serious, not only for the agriculture and non-agricultural market access (NAMA) negotiations, but also for the Round as a whole. It would now be much more difficult to conclude the Doha Development Agenda by the end of the year. The good news that the WTO had was that no one wanted to surrender in the efforts; all members were still committed to finishing the Round this year. During the meetings, non-acrimony was witnessed, which was another positive sign. Clearly and despite the differences existing in respective positions in the negotiations, the assessment was that the situation was not hopeless and that the distances among members were bridgeable. The main losers of the weakened multilateral trading system would be developing countries.
Concluding an ambitious Doha Round, including an Aid for Trade package, within the coming year was still doable, though more difficult after ministers' failure to agree on modalities for agriculture and NAMA last week. But one should be aware of the costs of a failure. If they were unable to bring the negotiations to a successful conclusion this year, the chances of a global deal on the scale envisaged by the Doha Round would be impossible for the foreseeable future. Developed countries would lose the opportunity to reform policies that distorted and constituted a barrier to global trade and global growth, developing countries would lose a once in a generation opportunity to open world markets for their exports and to redress imbalances in global trade relations. The smallest and poorest economies would lose the leverage of the multilateral trading system against the increasingly strong pressure of bilateralism and regionalism. And both developing and developed countries would suffer from a failed Doha Round and a weakened WTO. The real purposes and promise of a development round was to create trade opportunities that would help lift millions of people out of poverty and improve their everyday lives. That promise should be kept.
FRANCOIS BOURGUIGNON, Chief Economist and Senior Vice-President of the World Bank, said a lot had already been said. The world economy had done well over the last couple of years, with a record growth rate observed in 2004. What was more important was that this was accompanied by a true convergence in the global economy. Even when looking at poor countries, the rate of growth of GDP per capita was 3.5 per cent, and such a convergence had not been observed since the 1960s. It was not clear that this was a purely cyclical phenomenon, and some analysts saw it as a true trend, which all should work to promote and continue. The absolute differences in income per capita were being reduced. In the medium term, the World Bank expected this to continue, unless there was a disruption in oil supply and if global macroeconomic differences were reduced in an orderly way.
Yet, this convergence was not uniform, and as a result poverty reduction was lagging behind. With the present trends, sub-Saharan Africa was likely to miss the opportunity, and the gap in Millennium Development Goals was often pronounced. Vigorous and ambitious national development strategies should be formulated in low-income countries, and they should be articulated around poverty-reduction strategies and the Millennium Development Goals. It was essential to harmonise and coordinate satisfactorily the various strategies, and promote development knowledge as derived from policy initiatives taken in various contexts. Development knowledge was one of the most important public goods today. Poor people in the world should be better integrated into economic flows.
REINHARD MUNZBERG, Special Representative of the International Monetary Fund (IMF) to the United Nations, said growth in the global economy continued to be strong. However, there were some downside risks, one was high and volatile oil prices. Another risk related to a potential avian flu pandemic. A third concern related to global imbalances. Underlying those payment imbalances were imbalances in global consumption and savings and those differences were not sustainable. Actions to bring about a gradual reduction in balances were needed. As a contribution to address those problems, the IMF was developing a new tool. It was planning multilateral consultations in which particular issues of global and regional significance would be taken up comprehensively and collectively with systematically important members of the Fund and, where relevant, with entities formed by groups of members. The aim was to provide a vehicle for analysis and consensus building in a framework that would help members overcome some of the hurdles to individual action by emphasizing the benefit of joint action for all. The first multilateral consultation would focus on narrowing global imbalances while maintaining robust global growth.
The mechanism was part of the Fund's new medium-term strategy, which was designed to adapt the future direction of the Fund in light of the economic transformation brought about by globalisation. One important aspect of the strategy was to make IMF surveillance more effective and the multilateral consultations were one of the elements of those efforts. IMF should improve the usefulness of lending, especially its support for emerging market economies. It was discussing a new instrument to provide predictable and front loaded financing to emerging market countries that had strong fundamentals but remained vulnerable to shocks. Work on low-income countries also remained a critical task for the Fund. The Fund should play its part in helping its members to achieve the Millennium Development Goals. The most effective way that the Fund could help low-income countries achieve their development goals was by focusing on policies and economic institutions that were critical to economic and financial stability and growth, and that fell within its core competencies.
KIM HAK-SU, Executive Secretary of the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), said the past few years had been a golden period of high growth, which had been widely shared across developed and developing countries across the countries of the regional commissions. Vibrant performance was seen in the new members of the European Union, southeast Europe, and the Commonwealth of Independent States. Many countries had improved their domestic, microeconomic and macroeconomic fundamentals. Growth was expected to remain robust in 2006. However, high growth was not contributing enough in the fight against poverty, and nearly one sixth of the world's population still lived in extreme poverty. A key new issue was the phenomenon of jobless growth, and in many areas high economic growth had not kept pace with job creation.
To address this problem, Governments needed to improve the functioning of labour markets, with particular focus on youth employment. Employers needed to provide skills training to keep pace with the rapidly changing growth environment. Unless the situation was changed, the majority of the poor would see little hope for improvement in their lives.
Interactive Dialogue
In the context of the interactive debate, speakers raised various issues, including that today's dialogue was an important part of the dialogue between the Bretton Woods organizations, United Nations agencies, and ECOSOC. This had an important impetus to fostering partnership. The role of national institutions and strategies could not be ignored. A particular challenge was development in the least developed countries, in particular Africa. Equality between men and women should be an integral part of strategies to fight poverty. The Aid for Trade programme was also raised by several speakers. The issue of trade was important in dealing with imbalances. Achieving the Millennium Development Goals remained a challenge for many. Exchanging ideas and best practices should be a practice not only between Governments but also between regions. The burden of high-energy prices was also raised, as were the effects of avian flu and natural disasters for world economic growth. One speaker said the international financial structure needed to be reviewed, and another agreed on the importance of concerted macro-economic action in the long-term.
Speaking were South Africa on behalf of the Group of 77, Finland on behalf of the European Union, Brazil, Thailand, the Dominican Republic, and the Russian Federation.
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