Strengthening the Role of the UN in Global Economic Governance

02 Jun 2010

Statement by Helen Clark, Administrator of the United Nations Development Programme

“Strengthening the Role of the UN in Global Economic Governance”

2 June 2010, New York

My thanks go to Ambassador Wetland of Norway and Ambassador Kapambwe of Zambia for inviting me to take part in this discussion on “Strengthening the Role of the UN in Global Economic Governance”.

I am aware that this is the last of six meetings which have been arranged to follow up on the issues contained in the Outcome Document of the Conference on the World Financial and Economic Crisis and Its Impact on Development.

By the time that conference was held, it was abundantly clear that what had began as a financial system crash in a few countries had become a full blown global economic crisis – affecting nations which bore no responsibility whatsoever for what had happened in the financial markets of a few.

Many developing countries which were caught up in the global recession had little fiscal space in which to move, and little social protection to offer their people.  The effects of the recession on their peoples could be long lasting – not least where the impact has led to children being withdrawn from school and going without sufficient food.

It must also be remembered that the economic crisis came on top of the food and fuel crises of 2007-2008, and the growing impact of climate change on vulnerable countries.  A series of catastrophic natural disasters has characterized the first decade of the 21st century.

We have thus been living through concurrent crises with widespread impact. In our globalised and increasingly interdependent world, such setbacks are rarely confined to a particular country or set of countries.

Therefore, global public policy needs to be able to deal with interconnected, cross-border, and complex economic, social, and environmental challenges.

We need global governance systems which are capable of rising to these challenges. Those systems should facilitate both more coherent and better co-ordinated multilateral responses to crises, and be supported by institutions which are representative, inclusive, and effective.

Effective in this sense also means being able to tackle global economic imbalances; facilitate inclusive economic growth for human development; adopt an internationally agreed framework for climate change mitigation and adaptation; and advance multilateral trade agreements.

Yet, in the face of multiple crises, the governance systems in our increasingly multi-polar world often struggle to adapt and to address the issues we face effectively.

Take trade, for example.  Developing countries are bearing the brunt of the stalemate in the WTO’s Doha Round. They have the most to gain from accessing currently protected markets, and they have fewer cards to play in bilateral trade negotiations.

The emerging patchwork of bilateral agreements risks adding layers of complexity to the world’s trading system, and increasing transaction costs. A renewed commitment to multilateralism in trade and concluding the Doha Round is badly needed.

The world also needs to update the global economic governance system which was established at the end of World War II.  A reinvigorated system needs to reflect the geopolitical realities of the 21st century. The same could be said of the arrangements for the Security Council of the U.N. itself. The world looks very different now from the way it looked in the late 1940s. Governance arrangements in the Bretton Woods Institutions are to be reshaped.  Reform of the UN’s Security Council has yet to regain the momentum it had a few years ago.

In the absence of formal multilateral mechanisms able to tackle the global economic crisis comprehensively and decisively, the G20 came to the fore.  The decisive action taken in London in April last year was critical.  Since that time the G20 leaders have met again in Pittsburgh and determined that the G20 will be their premier forum for economic co-operation.

It is of course the prerogative of the G20 leaders to meet and to agree on a course of action for their nations.

Yet when the leaders of nations representing more than eighty per cent of the world’s economy do determine to act in a certain way, that has spillover effects for the other twenty per cent – made up of close to 170 nations.

It is important therefore that those outside the G20 who will be affected by its decisions are able to interface with the grouping in a meaningful way.  Undoubtedly in this context, the United Nations with its universal membership, broad mandate, and convening power can play a role in ensuring that the G20 is well informed of the range of views and perspectives of Member States.

At this time, however, there is no certain platform on which the UN can systematically interface with the G20 and provide its valuable contributions.

The UN is not part of the preparatory processes which determine the G-20 agendas. To the extent that it has been asked to participate, invitations have tended to be issued very late in the process, making meaningful contributions difficult.

That is unfortunate, because the UN through its funds, programmes, specialized agencies, and departments has huge expertise which is relevant to and can inform global economic discussion. The presence of UN Country Teams around the world means that the UN can also offer insights and analysis from a field perspective.

Many nations expect the UN to be able to interact with the G20 to ensure that perspectives beyond those of the very large developed and emerging economies are heard. The UN is able to pay that role, and is willing to contribute its expertise.

It may also be useful for the working group to consider what reform the various fora of the UN could undergo to improve the UN’s ability to contribute to global economic governance.

When the UN was established, the Economic and Social Council was given a mandate for the overall co-ordination of UN system activities in economic, social, and related areas. Despite several reforms aiming at strengthening its role, however, ECOSOC has not developed in the way the UN’s founders originally envisaged.

Perhaps now is the time to consider again proposals which have been put forward in the past to strengthen ECOSOC.

One of the UN’s greatest strengths is its country-level presence and capacity.

The UN’s funds, programmes, and specialized agencies put their expertise and experience to practical use on an ongoing basis to support countries to reduce poverty and achieve the Millennium Development Goals, and promote inclusive and sustainable development.

The Outcome Document of the Conference of the World Financial and Economic Crisis and its Impact on Development last year called on us to: “Further develop the United Nations development system’s comprehensive crisis response in support of national development strategies through a co-ordinated approach by United Nations funds and programmes, specialized agencies and the international financial institutions at the country level.”

For its part, in response to the economic crisis, UNDP has been working with other UN agencies, IFIs, and partners around the world to help developing countries mobilize the resources they need, analyze the impacts of the recession on their societies, and respond appropriately.

•    From Kiribati to Namibia and Syria, studies were conducted with UNDP support to examine the impact of the economic and financial crisis and come up with policy options to protect poor and vulnerable groups.
•    In El Salvador, for example, we helped the Government prepare a plan to promote temporary employment and countercyclical spending.
•    In Jamaica, we supported the government to restructure its huge domestic debt and lower its debt servicing burden.
•    In Paraguay and Moldova we have provided advice on the development of social protection programmes to cushion the impact of the recession.

Through the Resident Co-ordinator system we have also helped countries receive the co-ordinated support from the UN system in response to the recession.

UNDP, along with other members of the UN Development Group, contributed to many of the nine joint crisis initiatives, agreed to by the United Nations Chief Executives Board, to confront the crisis, accelerate recovery, and build a fairer and more inclusive globalization.

For example, in support of the Global Jobs Pact and the social protection floor, UNDP is working with ILO to promote sustainable employment, including through the development of small and medium-sized enterprises, inclusive financial sectors, and ‘pro-poor’ business investment.  That can lead, as for example, in Bulgaria and Egypt, to helping start-up businesses access business advice and mentoring services. We have on-going joint projects with the ILO and others to develop the private sector, as in Iraq.

UNDP has also been an active contributor to the Secretary-General’s High Level Task Force on the Global Food Security Crisis. UNDP, along with partners, has helped build the capacities of governments and communities to strengthen food systems. In Nepal, for example, we worked with local authorities to establish and manage grain reserves, so that those most in need could access food.  In Jordan, for example, we helped formulate strategies for food security and livelihoods.

UNDP has supported the establishment of the Global Impact and Vulnerability Alert System, to help put a human face on the effects of the crisis and highlight the depth and the speed with which it hit the developing world. 

The economic crisis has also highlighted the value of UNDP’s ongoing long term development work - across all areas of its mandate - to help countries develop the resilience to cope with whatever crises they may face.

From its inception, the United Nations has been a generator of new ideas with global application. Over the course of decades, the most powerful of those ideas have both changed and shaped policies at all levels, including on development, the environment, human rights, and gender.

A decade ago, the UN led the world to agree on the Millennium Development Goals. They captured a global consensus around the need to reduce poverty and hunger and improve gender equality, health, education, and the environment.

In overcoming development challenges, many actors need to work in partnership: developing countries by making MDG achievement and sustainable development central to their development strategies, and the multilateral system, donors, NGOs, and the private sector.

The role of the UN as a convener of nations, a contributor of big ideas with global reach, and a mobiliser of collective international will and commitment to act for development is indispensible to overcoming today’s challenges, including those of an economic nature.

That is why the UN needs to be linked into the debates about the global economy and to the informal multilateralism which has developed, as well as considering how it might reform itself to play more effective roles in this regard.

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