'Development must remain top priority of United Nations,' agrees UN - Bretton Woods meeting

UN Chronicle, Summer, 1998

Secretary-General Kofi Annan called for closer cooperation between the United Nations and the Bretton Woods institutions at the first ever high-level meeting between the organizations, which focused on the theme: "Global financial integration and development and recent issues".

Stressing that closer cooperation between the organizations was imperative, the Secretary-General said the Asian financial crisis and its ensuing economic, social, developmental and political consequences served as reminders of the interrelationships between the responsibilities and the work of the United Nations, the International Monetary Fund (IMF) and the World Bank. The international ramifications of the Asian crisis, he said, were vivid proof of the risks that come with the benefits of globalization and also the stark evidence of the need for more integrated discussions and approaches to development issues.

The special meeting of the Economic and Social Council, convened on 18 April, was mandated by a 1996 decision of the General Assembly, which called for improved communication and cooperation at the intergovernmental level between the Council and the international financial and trade institutions, at the ministerial level. The Council was invited to periodically schedule a high-level meeting close to the semiannual meetings of the Bretton Woods institutions, to take advantage of the ministerial participation and that of senior officials of financial and trade institutions and other relevant organizations, to promote dialogue among them in order to give impetus to the new development agenda emerging from the world conferences.

Addressing the meeting, the IMF Managing Director, Michel Camdessus, said past coordination with the United Nations should be built upon to improve and expand cooperation between them. Referring to the appeal for a new architecture of international financial systems, he said it was an ambitious undertaking, and the IMF was still taking stock. The Fund must implement most forcefully its surveillance role of the economies of countries with systemic problems, and the conclusions resulting from such surveillance must be heeded. Countries showed their problems when it was too late to avert the crisis, he said, adding that the IMF was at the service of any country or group of countries which needed help to overcome their economic problems.

The Managing Director of the World Bank, Sven Standstrom, said he had no doubt that the Asian miracle would resurge. He stressed the need to ensure that globalization was a strong force for poverty reduction, noting that there had not been mention at the special meeting of the strong performance of poor countries in Africa, which had their growth increased to 4 per cent, although they needed to do more to reduce poverty. He called for better collaboration and coordination between the Bank and United Nations agencies at the agency and country levels, with Governments at the driver's seat.

The Council's Acting President, Francesco Paolo Fulci of Italy, in summary conclusions of the event said the main point of the dialogue had been the recognition that globalization had changed the world, and the world must respond. There was universal recognition that global financial integration is not an option - it is an historic shift, which offers great opportunities but also great challenges. "The Asian crisis has resulted in great attention being given to the sharing of risks and benefits in times of financial turmoil."

The discussions among the participants at the meeting demonstrated that international institutions and national Governments still have a lot to learn about responding to the forces of global financial integration, the summary states. A number of interesting and innovative ideas were presented, demonstrating that the meeting had been an important opportunity to exchange views on the types of action that need to be taken by all, individually and collectively.

The summary recalls that the reason that the Economic and Social Council was originally conceived by the fathers of the United Nations, the vision and motivation driving recent efforts to renew economic and social sectors, and the inspiration behind the historic meeting, all focus on a single goal: "To make this world a better place in which to live for all the people of the planet, by giving the developing countries, especially the least developed countries, a better chance to improve their sort." It concludes by stressing that development must remain the top priority of the United Nations.

The special meeting, attended by a record number of 30 ministers and an even larger number of high-level officials from the world of finance and development from every region, consisted of four panel discussions, with two presentations by special guests, followed by questions and comments by ministers and other senior officials.

Issues raised during the panel discussions included: the effects of financial crises on vulnerable groups and other countries; poverty eradication and globalization; liberalization of capital flows and the need to safeguard them against speculation and volatility; and debt relief. There were calls for correction of inequities, particularly corruption, and the prevention of financial crises. Some participants supported the idea of establishing an economic Security Council.