The New York Times / By CHRISTOPHER S. WREN
UNITED NATIONS, Jan. 30 - Declaring no task more urgent for the United Nations than rescuing 1 billion people from "abject and dehumanizing poverty," a report released today by Secretary General Kofi Annan proposed mobilizing more private investment as well as loans from governments and international organizations to finance the economic development of poor countries.
The report was stimulated by world leaders attending the Milennium Summit here last September. It proposed a complex array of remedies, including "significant and immediate" debt relief for the poorest countries, the reduction or elimination of duties and market quotas on exports by developing countries, and mechanisms to reduce the risk of fluctuating markets and prices for basic commodities that constitute many such countries' primary source of foreign income.
But the 64-page report also broke new ground in advocating international cooperation against common problems, notably tax evasion, devising fresh approaches to handle the burden of foreign debt, and recommending a channel for complaints by labor unions and other critics of international organizations.
And it insisted that developing countries must do more themselves to attract foreign investment by reducing corruption and making financial and legal safeguards stronger and more transparent.
"The purpose is to get a shared basis of action among 188 governments, and what you have here is a starting of the process," Nitan Desai, the Under Secretary General for Economic and Social Affairs, said in releasing the report today.
The report echoed concerns being discussed at the World Economic Forum in Davos. Mr. Annan, in an address Sunday at the Swiss ski resort, reminded political and business leaders attending the annual forum that it was in everyone's interest to spread the wealth in a global economy.
"If we cannot make globalization work for all, in the end it will work for none," Mr. Annan said.
Expanding on this message, the report released today declared that "globalization and its accompanying market energies must be guided and harnessed to become inclusive forces for sustainable, people-centered development."
"While the new global environment has benefited a significant number of countries and created opportunities for faster growth and improvements in standards of living," the report said, "public perspectives increasingly focus on the negative impact of globalization."
The report was compiled from information, analysis and advice provided by United Nations agencies, international organizations like the International Monetary Fund and the World Bank, and regional consultations last year in Indonesia, Colombia, Ethiopia, Lebanon and Switzerland.
"We are starting with a common purpose, a clear purpose," said Enrique Rueda-Sabater, a senior manager of the World Bank. "We are trying to reduce poverty. That is a tall order, but a motivating one."
At their summit meeting here last September, the world leaders set a goal over the next 15 years of reducing by half the proportion of people in the world who earn less than $1 a day and who suffer from hunger. The leaders also expressed concern about "the obstacles developing countries face in mobilizing resources needed to finance their sustained development."
Mr. Desai said that the report released today would be the starting point for international discussions, starting with a preparatory meeting next month and again in April, and concluding with an international conference of policy makers in March 2002.
The report noted that the worlds of finance and development are linked through the mechanism of saving and investment. An estimated $7.5 trillion was saved or invested worldwide last year, of which $1.7 billion was invested in developing countries. But the net transfer to wealthy countries amounted to $450 billion, three-fourths of which was absorbed by the United States.
The foreign debts accumulated by many poorer countries, the report said, "have become heavy constraints on their ability to reduce poverty and reach other development goals. While debt relief is just one of various financial assistance instruments, it is important to recognize that in some cases debt burdens represent insurmountable obstacles and need to be addressed urgently."
The report proposed that industrialized countries promptly open their markets, without duties or quotas, to exports of the least developed and most indebted countries. Furthermore, it said, trade barriers to agricultural products should be reduced, and attention should be given to integrating textiles and clothing into the open market defined by the World Trade Organization.
But the report also made clear that developing countries had to create a more attractive climate for international companies and investors, with a "transparent, stable and predictable framework for private investment" and an equitable regulating system.
It urged countries to do more to fight corruption, explaining that government and other public institutions had to be free of corruption to mobilize and allocate domestic resources effectively.
And to ensure that more people paid their taxes, the report said, countries should simplify their tax laws and enforce them vigorously. It proposed that countries cooperate to halt tax evasion.
Reinhard Munzberg, the International Monetary Fund's special representative to the United Nations, said the idea was to identify criteria that were important in wooing foreign investment. "There are things that are expected if one wants to attract these flows," he said.
The report also said that countries should make financial services more accessible for poor people, with institutions set up to help small savers and small borrowers. Women, in particular, it said, needed more access to mainstream loans, and a stronger right to pledge collateral.
The report estimated the daily turnover in foreign exchange markets alone at more than $1.5 trillion. Recognizing that loss of confidence in financial markets or currencies could trigger many financial crises simultaneously and cause panic worldwide, it proposed that the International Monetary Fund and other institutions assess the world's capacity to respond to emergency demands for cash.
"Knowing that such a mechanism capable of providing such liquidity existed - a 'lender of last resort' - could in itself strengthen general and investor confidence in the international financial system," the report said.:
