'Tremors of world financial crisis felt by assembly.' - General Assembly 53 - United Nations General Assembly

UN Chronicle, Spring, 1999

The ongoing world financial crisis was a central focus of the Second Committee (Economic and Financial) this year. International financial issues were featured in 8 of the 32 draft resolutions the Committee recommended to the General Assembly.

Beginning its session on 6 October with one week of general debate, the Committee discussed a number of economic and financial issues, including macroeconomic policy, sectoral policy, sustainable development, environment, poverty elimination and Palestinian sovereignty over natural resources. On 15 December, the Assembly adopted by consensus all but one of the draft resolutions recommended by the Committee.

Committee Chairman Bagher Asadi of Iran attributed the success of the session to the fact that the Committee had "worked tirelessly to achieve consensus" on the elements of its programme of work, rather than settle for voting on issues. Particularly during the debate on globalization, the Committee was able to come to the conclusion that "all were in the same boat".

Macroeconomic policy

Seven resolutions were adopted by the Assembly on macroeconomic policy questions, including development in the context of globalization and interdependence, international trade and development, and external debt problem of developing countries.

Assessments of the impact of the global crisis triggered lively debate on a number of macroeconomic policy questions, particularly concerning the role of the United Nations in addressing them. Under-Secretary-General for Economic and Social Affairs Nitin Desai said Committee discussions about a new financial architecture came at a time of a crisis of greater magnitude than any of a similar nature over the previous 50 years. A number of Committee members addressed the threat of unregulated flows of private investment capital, which was destabilizing the economic systems of developing countries and risking the marginalization of national economies.

Debate centred on whether to simply strengthen the Bretton Woods institutions or completely restructure the financial architecture.

The outcome of the debate was a resolution on growth and development and the impact of the financial crisis, by which the Assembly invited the International Monetary Fund (IMF) to consider the possibility of establishing a regulatory framework for short-term capital flows and trade in currencies. It also stressed the need to endow IMF with adequate resources to provide emergency financing to countries affected by financial crises.

The Assembly also urged developed countries to support the commodity diversification and liberalization efforts of developing countries, especially African nations.

It expressed the urgent need for supportive international policies to improve the functioning of commodity markets through efficient and transparent price formation mechanisms. The Assembly also invited donor countries and multilateral financial and development institutions to continue to help the landlocked States in Central Asia and their transit developing neighbours with financial and technical assistance for the improvement of their transit environment.

Sustainable development

Regarding environment and sustainable development, the Assembly stressed the need to accelerate full implementation of Agenda 21, adopted at the 1992 United Nations Conference on Environment and Development. On the Kyoto Protocol to the United Nations Framework Convention on Climate Change, some Committee delegations had argued that the developed countries had failed to implement their own obligations.

The Committee also discussed effective mechanisms for small island developing States in the areas of science and technology, information-sharing and capacity-building, waste management, and maintenance of freshwater, land and biological resources. The Assembly urged those States to continue preparations for the seventh session of the Commission on Sustainable Development and its special session in September 1999 for the appraisal of the implementation of the Programme of Action for the Sustainable Development of Small Island Developing States.

Also reviewing the Committee's report on the implementation of the first Decade for Poverty Eradication (19972006), the Assembly called on developed countries to reach the agreed target of 0.7 percent of their gross national product for overall official development assistance. It further proclaimed 2005 as the International Year of Microcredit, as an impetus to microcredit programmes throughout the world.

Saying that the socio-economic costs of bribery were enormous, with the greatest victims of corruption usually the poor, the Assembly adopted two texts on sectoral policy questions put forward by the Committee: action against corruption and bribery in international commercial transactions; and industrial development cooperation.

In the sole text recommended by the Committee that required a vote, a resolution on the permanent sovereignty of the Palestinian people in the occupied Palestinian territory was adopted by the Assembly by a vote of 114 in favour to 2 against (Israel, United States), with 12 abstentions. The Assembly called on Israel not to exploit natural resources in occupied Palestinian territory and in the occupied Syrian Golan. During the Committee's deliberations, representatives of the United States and Israel expressed concern that the resolution might predetermine the outcome of negotiations between Israel and the Palestinian Authority to settle outstanding issues.