IATP's Steve Suppan is blogging from the U.N. Conference on the World Financial and Economic Crisis in New York.
Yesterday, at the opening plenary, government delegates agreed to adopt an outcome document that is the result of more than four months of intense and sometime bitter negotiations. According to the United Nations, another 100 million persons could lose their jobs by 2010, as a result of an economic crisis triggered by the deregulation of the U.S. financial services industry. Most of these jobs will be lost in countries without unemployment insurance, creating conditions for political instability in dozens of developing countries. This situation led the U.S. Director of National Intelligence Dennis Blair to tell the U.S. Senate committee on intelligence in February that the economic crisis had replaced terrorism as the number one U.S. national security threat.
IATP's President Jim Harkness participated in the initial meeting in October 2008 that launched the preparation of the negotiations process. IATP provided input on regulating commodity price volatility to the Commission of Experts advising the President of the General Assembly on issues to be addressed in the outcome document. IATP also contributed to a U.N. Conference on Trade and Development symposium that was part of the high-level conference (HLC) preparations.
Most of the ideas of the Commission of Experts to provide short-term economic stimulus to developing countries and to enhance the U.N.'s role in global economic governance were cut in the long and sometimes brutal negotiations. The United States and the European Union wish to keep economic governance in the hands of the World Bank and International Monetary Fund, where they have effective veto power over all decisions. The U.S. and EU proposed that the outcome document should only register the impact of the financial crisis on developing countries and welcome the work of the G-20 in proposing policies and promising financial resources for the IMF. The U.S.and EU wanted no commitments to consider the creation of new governance instruments and funding to complement the IMF and World Bank, both of which failed to warn member countries of the dangers of financial industry deregulation and liberalization through the World Trade Organization and free trade agreements.
However, the outcome document provides for the creation of a working group of the General Assembly, advised by a panel of experts "to follow up on issues contained in this outcome document." This diplomatic achievement may seem like a weak solution to the economic crisis that has spread from Wall Street around the world. But many, including the mainstream media, dismissed even the possibility that the United Nations could agree on any terms of a document to establish a new framework for economic governance and to gather resources that would not be provided as loans by the IMF or the World Bank. The outcome document establishes that possibility.
At the first HLC multi-stakeholder dialogue today, IATP was among five non-governmental organizations selected to comment on the HLC outcome document and the opportunities it presented to involve U.N. agencies and civil society organizations in longer term financial institution reform and to implement short-term stimulus packages to prevent an economic breakdown in developing countries. So many government delegates wished to speak that IATP did not have a chance to do so. But Roberto Bissio of Social Watch, a long-time IATP ally, welcomed the outcome document and pointed to opportunities it presented for investing to protect the world's most vulnerable populations. Beverly Kneen of Jubilee South emphasized the need to direct non-debt generating money to developing countries by closing tax evasion loopholes, illegal capital flight, and repudiating illegally contracted debt, rather than allowing an IMF and World Bank-controlled debtors' crisis.
There is much to be done at the conference before the General Assembly formally adopts the outcome document on June 26. IATP will continue to work with groups from around the world to ensure that the challenge of the financial crisis to development, including rural development and food security undermined by deregulated commodity markets speculation, will be met.
