Helen Clark: UN Conference on the World Financial and Economic Crisis

26 Jun 2009

Statement by Helen Clark
Administrator of the United Nations Development Programmme on the occasion of the
United Nations Conference on the World Financial and Economic Crisis and Its Impact on Development
Roundtable 4: “Contributions of the UN development system in response to the crisis”
Friday, 26 June 2009, New York

Excellencies,
Distinguished Delegates,
Colleagues,
Ladies and Gentlemen,

Over the past two days this Conference has heard how the economic crisis is unfolding in different parts of the world and impacting on peoples’ lives.

The global recession has added to the stress which very high food and energy prices last year had already imposed on many.  Concurrently, we face the huge climate change challenge, related to the world’s present unsustainable use of natural resources.

Now drops in export volumes and revenues, and reduced flows of remittances and investment are all taking their toll. In these difficult conditions, it is very difficult for families and nations to plan and budget.

While developed countries have also felt the impact, some severely, for the most part they have had tools at their disposal to address the crisis.  Some expect a slow recovery towards the end of this year or in the first half of next year. 

The turn-around for developing countries, however, may well take longer. Many impacts of the crisis in developing countries, such as slowing growth rates, rising unemployment, and declining budgets are only now beginning to unfold.

With families facing shrinking livelihoods and job losses, and with governments confronting slumping revenue and pressures to cut back on spending, men and women around the world face tough decisions on how to meet their needs with reduced means : Will their children be able to go to school ? Can they afford to see a doctor ? What food and shelter can they afford for their family ?

As a result of the crisis, many now fear a slowdown in the rate of progress towards meeting the MDGs, or even a reversal of hard-won gains.  We must do all in our power to stop this happening.

The current crisis highlights more than ever the need for the voices of the poor and of low income countries to be heard. This Conference is helping to make that possible.

The UN development system has an important role to play in articulating and supporting a coherent global response to the crisis, and in seeing that translated into action at the country level.

Our primary concern in UNDP, as well as in the broader collection of agencies which make up the United Nations Development Group, is to support those who are already poor and vulnerable, while also safeguarding the investments and efforts made towards poverty reduction and achieving the Millennium Development Goals and longer term development.

We are working, together with national governments and other development partners, to ensure that countries are supported through the crisis, and that any signs of recovery are nurtured. It is critical also that we work particularly closely with the International Financial Institutions given the vital role they can play.

Under the auspices of the United Nations Chief Executives Board – chaired by the Secretary-General - agreement has been reached on a common framework to confront the crisis, accelerate recovery, and build a fairer and more inclusive globalization. The framework covers food security, trade, a greener economy, a global jobs pact, and a social protection floor. 

As part of this, UNDP and the World Bank were specifically asked to take the lead in developing a response mechanism for the UN system to the human crisis which is unfolding. The core elements agreed are that the approach taken in each country must be driven by local needs, and that the UN system and the World Bank will work together to support countries developing their responses. 

UNDP is therefore committed to the course of action proposed in paragraph 52 of the Outcome Document for this Conference. We hope that the international community will respond to the call to provide adequate support for this work.

The UN system is also working with other development partners to establish a “Global Impact and Vulnerability Alert System”,  to track the impact of global crises on the most vulnerable, and to provide decision makers with evidence which can guide specific, rapid, and appropriate responses to countries suffering from the crisis.

By September, both the response mechanism should be agreed and a first report of the “Global Impact and Vulnerability Alert System” will be ready.

For its part, UNDP has also been responding to requests from programme countries in our five regions for support in analyzing the human development impact of the crisis; designing policy responses - including on how to protect the most vulnerable; and facilitating resource mobilization.  UNDP can and does advise on what has worked in other countries to mitigate the impact of severe economic shocks, and can share lessons and advise other countries accordingly.

For example:

•       In India, UNDP has been a key partner of the government in implementing the National Rural Employment Guarantee Act.  This has acted as a vital safety net for workers in the informal sector.

•       In Mauritius, UNDP has helped the government prepare its own stimulus package, based on its existing work with the government on pro-poor budgeting.

•       In Namibia, Paraguay, and Syria, UNDP is helping to raise funding and provide technical assistance for impact assessment studies.

•       In Kazakhstan and Macedonia, UNDP is working with national counterparts to improve social protection at the national and local levels.

Here in New York, we are working to ensure that our country offices have access to the people, tools, and resources they need to support governments through the crisis.  We are also compiling and reviewing impacts and responses. We are helping to share experiences among countries, so that we can better deliver advice on policy design and implementation, and communicate how the crisis is affecting people in developing countries and what support is needed to address it.

The economic crisis also demonstrates the importance of UNDP’s ongoing long term development mandate.  Our work on poverty reduction and the MDGs, crisis prevention and recovery, democratic governance, and the environment and sustainable development helps develop the critical capacity which will make nations and communities more resilient to shocks in the longer term. 

It is clear that the current crisis poses great challenges. But it is also an opportunity for bold thinking and action. For example, as many countries fight the recession, investing part of their fiscal stimulus in green jobs not only dulls the effect of the recession, but can also put those countries on a low-carbon route to development.

UNDP is now bringing its climate change work into the core of its thinking about development and poverty reduction. We are stepping up our work to support developing countries in achieving an outcome at Copenhagen in December which is consistent with designing a sustainable path out of poverty and for achieving the MDGs.  What could be achieved at Copenhagen, including through new financing mechanisms being worked on, has significant implications for development.

What is clear is that business as usual approaches to development at this time are not sufficient to maintain traction on development. If the international community is to honour its commitments to achieving the MDGs by 2015, more ODA is needed. This is critical now for many countries so that governments can maintain their budgets for basic services as domestic revenues decline, and so that investments in poverty reduction and development are not reduced. The economic crisis should not be an excuse to go back on promises made. 

The Gleneagles commitments of doubling ODA to Africa by 2010, and increasing it overall by $50 billion dollars compared to 2004 levels and prices, were made before developing countries were hit by the food and fuel crisis and the global recession.

When the G8 meets shortly, it has the opportunity not only to reaffirm the commitments it made at Gleneagles, but also explicitly to commit to mobilize the resources needed to fund the “Gleneagles Scenarios” which are being developed for African countries.  If implemented, these scenarios would make a great difference to the ability of countries in Africa to achieve the MDGs.

After the commitments reiterated at the April G20 Summit in London, it is also to be hoped that the next meeting of the G20 in September might focus more attention on how to support low income countries through the global recession.  

We all know that development assistance can and does make a difference. We also know that progress can be made towards the MDGs, even in the most difficult of settings.

The resources and the know-how exist to help bring about much needed improvements in people’s lives.

What we need now is the political will to mobilize the resources to make these improvements a reality.

Working closely with our partners within and beyond the UN family, UNDP is contributing to making that happen.

Thank you.