By Clive Thomas
E-mail address: cythomas@guyana.net.gy
I have urged repeatedly that, for poor countries, the symbolic importance of the recent United Nations Conference on the Global Financial and Economic Crisis should not be undervalued. The six-decades long march from the establishment of the Bretton Woods Twins (IMF and World Bank) to this conference has been one of immense pain and suffering for a large number of poor countries, which encountered economic difficulties and had to contend with these institutions during this period.
Allowing for the fact that some would claim that much of their economic difficulties could be traced to poor policies, bad politics and corruption, thereby being largely self-inflicted, the rigid and doctrinaire approaches of the IMF and World Bank in addressing these difficulties made matters immeasurably worse. I shall address this topic in later columns. My concern today is to simply evaluate the overall results of the conference from the perspective of poor countries.
As I previously indicated, the many aims and aspirations of the developing countries attending the conference could be distilled into two core strategic goals. One was to garner immediate international support for resources to flow to those poor countries suffering the worst negative impacts of the crisis. The other was to focus on removing those systemic features of globalisation, which were resulting in global crises of increasing frequency, complexity and ferocity.
As pointed out, there were three major outputs of the conference. One was its outcome document, which recorded the issues debated, the decisions taken, and the actions agreed on at the General Assembly. Linked to this was the conference establishment of an open-ended working group to follow-up on the matters recorded in the outcome document and report back to the General Assembly at its 64th Session, scheduled for September 2010.
The second output was the establishment of an ad hoc group of experts by the General Assembly. This group is expected to guide the UN through the complex arenas of global credit and finance. The hope is that the group would raise the technical capacity of the UN as it seeks to assert greater and greater collective oversight over the global financial system.
The final output was the decision to proceed with the coordination of the UN and the IFIs, especially the IMF and World Bank, which had hitherto acted completely independent, if not in disregard, of the UN.
Sampling
country views
As readers know, as many as 192 countries participated in the June conference. It is therefore not practical for me to attempt to reproduce all the various country and regional positions at the conference. Based on media reports, I have singled out five summary country/regional opinions of the conference that are pertinent to Guyana and Caricom. First, based on a decision taken at the Heads of Government Conference held in Belize early this year (March), Jamaica spoke on behalf of members of Caricom to highlight two vital considerations. First, in much the same vein as this column has done, Jamaica stressed the importance of the fact that the United Nations had indeed convened the conference. This attests to its symbolic importance, which I have been stressing. Second, Jamaica claimed that the conference gave Caricom a voice in the global deliberations on the global crisis and by extension this voice was given to all small vulnerable economies. Without the conference, the voices of these countries would never have been considered internationally. Second, as it turned out the United States was the most unwilling participant at the conference. It was uncompromisingly against efforts to assign to the United Nations any role on decisions affecting the IFIs. It expressed satisfaction with what currently prevails and doubted that the open-ended working group had the expertise to deal with the many technical issues related to the international financial architecture. It poured scorn on claims that poor countries needed more “policy space,” as I discussed it last week in these columns. It found it unhelpful for the UN, a political body, to talk about a structural framework for cooperation with the IFIs on technical issues such as debt, reserve currencies, and Special Drawing Rights for the IMF.
Third, Cuba was also very dissatisfied. Unlike the United States, however, it did not believe that the UN went too far. Instead, Cuba argued that the outcome document did not go far enough! Thus, Cuba claimed that the conference provided no new or additional resources for poor countries. Further, nothing was concretely done to provide for the “radical transformation” of the international financial architecture, which was so badly desired by all developing countries.
Fourth, surprisingly, the European Union underscored the symbolic importance of the conference. It however, felt that the outcome document was “ambitions,” hinting at possible over-reach.
Finally, the President of the General Assembly was ecstatic about the conference and its results. He declared that the UN had been given a role on global financial and economic crisis and that through the open-ended working group, there should be no turning back on this. As he proclaimed: “The world has had the opportunity to hear the views of the G192. All members have had the chance to express their views… The G192 has now been established as a central forum for world economic and financial issues. This itself is a major achievement.”
Summing up
When all is said and done, the question is: did the UN Conference on the Global Financial and Economic Crisis achieve much for the developing world and in particular small poor vulnerable economies like Guyana and Caricom? At this point, it is impossible to give a definite answer, as the benefits will have to flow out of the continued work of the open-ended working group established by the UN at the end of the conference. There is no doubt that the conference proceedings produced a rich and varied discourse on the systemic and other weaknesses of the processes of globalisation and the negative impacts these were having on poor countries. However, while the conference produced rich analysis of these defects and discussed a range of proposals to address them, it was short on concrete actions. This will have to be delivered by the working group as the conference itself failed to produce many concrete results.
Having said that, I would urge readers to not lightly discard the fact that this was undoubtedly the most important gathering of the UN to consider global economic matters! What this signifies for the future, we cannot accurately predict at this early stage.
