A more equitable trading system and the cessation of unilateral sanctions would be critical to achieving sustainable development, speakers told the Second Committee (Economic and Financial) today during its debate on macroeconomic policy questions.
Namsuk Kim from the Development Policy Analysis Division of the Department of Economic and Social Affairs introduced the Secretary-General’s report on unilateral economic measures as a means of political and economic coercion against developing countries (document A/72/307).
He noted that many States had expressed their disagreement with imposition of unilateral economic measures, adding that they went against principles of the United Nations Charter, norms of international law or the rules-based multilateral trading system. Such measures hampered trade flows, negatively impacted socioeconomic development in affected countries and weakened their contributions to international sustainable development.
Iran had been experiencing economic coercive measures, and it remained opposed to the application of unilateral economic and trade measures against other countries, said that country’s representative. The use of such measures adversely affected developing countries, international economic cooperation, and the promotion of a non-discriminatory and open multilateral trading system. Despite such sanctions, Iran’s economy had demonstrated unparalleled potential for expansion and growth, he continued. Not only did economic measures fail to impede Iran, but they solidified collective resolve to enhance domestic production.
In a similar vein, Cuba’s delegate said his country had rejected unilateral coercive economic measures, including the economic, commercial and financial blockade imposed on it. The blockade caused deprivation to the Cuban people, constituted the main obstacle to the country’s development and macroeconomic policy objectives, and was the source of significant economic damage.
The representative from Syria said she had hoped the Secretary-General’s report on coercive measures would include an in-depth assessment of affected countries, but it only spoke briefly of unilateral measures, mainly their unintended consequences. She voiced opposition to unilateral economic measures, as they contravened globalization measures by the same Governments that imposed them.
The high level of uncertainty in the international policy environment and the overall outlook on external debt sustainability in developing countries continued to worsen, noted the representative from the Philippines. Expressing regret for the emerging mistrust in the trading system and the rising trend to resort to unilateralism and protectionism, she said such trends endangered trade as a main driver for inclusive growth.
Venezuela’s representative, while noting concern about the effects of the capitalism crisis, said the international community must redefine what was just and equitable. Development processes must be autonomous and respect the sovereign management of resources without intermediation of transnational corporations. Unilateral and coercive measures, she echoed, were incompatible with the United Nations Charter and hindered development efforts.
The delegate from Belarus echoed those sentiments, adding that current global conditions did not inspire optimism. Expressing concern over the decline in global trade particularly for middle-income countries, she called for coordinated assistance and the cessation of unilateral sanctions. She remarked that such measures also had an extraterritorial impact on regional economic cooperation.
Speakers also presented the report of the United Nations Conference on Trade and Development (UNCTAD) Trade and Development Board (documents A/72/15 part I, II, III, IV and V), and the Secretary-General’s reports on international financial system and development (document A/72/306), external debt sustainability and development (document A/72/253), international trade and development (document A/72/274), and world commodity trends and prospects (document A/72/254).
Also speaking were representatives of Ecuador, Indonesia, Bangladesh, Jamaica, Maldives, El Salvador, India, China, Singapore, Russian Federation, Mexico, Guatemala, Qatar, Liechtenstein, Norway, Iraq, Lao People’s Democratic Republic, Thailand, Malawi, Burkina Faso, Brazil, Nepal, Ethiopia, Nigeria, Zimbabwe, Morocco, Kenya, Algeria, Maldives, Cabo Verde, and Togo, as well as the Holy See and Common Fund for Commodities.
The Committee will meet again at 10 a.m. on Monday, 9 October, to discuss sustainable development.
Introduction of Reports
TUDOR ULIANOVSCHI, President of the United Nations Conference on Trade and Development (UNCTAD) Trade and Development Board, introduced reports (documents A/72/15 part I, II, III, IV and V) highlighting the need for enhanced collective actions to implement the 2030 Agenda for Sustainable Development. Urging the international community to focus on collective actions, he called attention to the significant progress made by UNCTAD, as seen in the Nairobi Maafikiano document. That consensus document strengthened the role of the Conference as the primary focal point for trade and development, and supported the gainful integration of all countries into the international economy.
He said that UNCTAD had in 2016 launched the Intergovernmental Group of Experts on Financing for Development and the Intergovernmental Group of Experts on E-Commerce and Digital Economy. Recognizing the need for the Conference’s work to feed into the General Assembly, the Board elected to postpone its annual session to June 2018. He encouraged Member States to provide inputs on the work of the Board to Geneva. Continuing, he noted several high-level dialogues and deliberations which furthered efforts to enhance investment policies, and address trends in the financial markets and flows, among others. The Board also considered assistance to the Palestinian people, and he stated that many delegations expressed concern at the worsening socioeconomic conditions in the Palestinian territory. Other discussions highlighted economic development in Africa, among others.
ALEXANDER TREPELKOV, Director of the Financing for Development Office, Department of Economic and Social Affairs, introduced the Secretary-General’s report on international financial system and development (document A/72/306). He said analyses of high frequency data on developing countries had shown that they were subject to periodic episodes of high volatility. Developed country central banks were introducing new measures, including the reduction of interest rates, which would increase the risk of volatility in developing States. Institutional investors, who were the main drivers of portfolio flows, could play a role in financing, but they currently had a short-term bias. Reallocation of investment to the long-term would require changes to incentives. International financial flows were important because they played specific roles in financing activities benefiting all of society. Official development assistance (ODA) to least developed countries fell by 3.9 per cent in 2016, with many individual contributions below the United Nations target of 0.7 per cent. Noting that there was no single solution in addressing developing country financial stress, he said the best was likely prevention. International and national systems should help countries return to financial stability, while not compromising the Sustainable Development Goals. Some reforms to the financial regulatory system were proceeding well, but others required more effort. Efforts to include all elements of the Goals into the financial system reform agenda were still in their infancy. International public financial institutions played a unique role, and new development banks were now contributing resources to many sustainable development projects.
STEPHANIE BLANKENBURG, Head of Debt and Development Finance Branch, United Nations Conference on Trade and Development (UNCTAD), introduced the report of the Secretary-General on external debt sustainability and development (document A/72/253). Noting that the overall outlook on debt sustainability was worsening, she said current policy initiatives to bolster it and mobilize resources could prove too gradual to mitigate the growing risks. The report provided a comprehensive overview of debt indicators, debt sustainability and main directions in international policy initiatives to mitigate global challenges. Regarding trends and debt indicators, the post-financial crisis period demonstrated that the debt to gross domestic product (GDP) ratios in developing countries remained stable; however, those indicators concealed troubling increases in debt to export ratios and increases to debt service burdens. She called attention to the plight of small island developing States which registered among the worst debt indicators of any group. Given the increase in natural hazards because of climate change, she urged for greater creditor actions to reduce the debt burden for most disaster-affected countries. Least developed countries were also a growing concern. While welcoming the 0.32 per cent gross national income contributions to ODA, she however noted that the 0.7 per cent international target was missed. Problematic trends continued in large private sector debt and debt service ratios in the private sector and she expressed concern that countries remained ill-equipped to successfully manage the related challenges. The international community’s reliance on volatile markets and unstable domestic financial systems called for greater efforts to risk mitigation. To that end, she encouraged greater focus on State-contingent debt instruments, soft-low principles and the promotion of new financial instruments. She urged Governments to consider immediate policy coordination, enhanced debt relief or cancellation, and the improvement of data and analysis on debt sustainability.
NAMSUK KIM, Development Policy Analysis Division, Department of Economic and Social Affairs, introduced the Secretary-General’s report on unilateral economic measures as a means of political and economic coercion against developing countries (document A/72/307). He said the Secretariat had invited Governments, relevant international organizations, programmes and agencies, within and outside the United Nations system, to provide their views and any pertinent information on that matter. Twelve Member States and three regional commissions had replied. Member States expressed their disagreement with the imposition of unilateral economic measures as an instrument of political and economic coercion, stating that those actions were not in accordance with the principles of the United Nations Charter, the norms of international law or the rules-based multilateral trading system. They also expressed concern about the negative impact of unilateral economic measures on the socioeconomic development of affected countries. The regional commissions concurred, indicating that unilateral sanctions adversely impacted populations of affected countries, especially the most vulnerable groups. Such measures hampered trade flows and their potential contribution to development.
MARISA HENDERSON, Economic Affairs Officer, United Nations Conference on Trade and Development (UNCTAD), introduced the report of the Secretary-General on international trade and development (document A/72/274).
The report demonstrated that the value of international trade increased from $5 trillion in 1994 to $24 trillion in 2014, she said. Twenty years ago, 60 per cent of world trade was between developed countries, 30 per cent between developed and developing countries, and only 10 per cent in South-South trade. Recent trends had pushed the expectation that trade would be split equally in three ways. In less than three decades, trade facilitated significant economic gains; however, the 2016 trade values declined for a second consecutive year despite growth in GDP. Similarly, the overall trade volume growth from 2008 to 2016 was weak at 1.3 per cent and reflected deeper structural challenges. Investment spending slumped in the United States, and China continued to rebalance its economic system away from investment and towards consumption. Thus, the ratio of trade in China over GDP declined from 65 per cent in 2005 to 35 per cent in 2015. Parallel declines were observed in many East Asian economies.
The benefits of innovation in information communications technology (ICT) were exhausted and trade regulatory harmonization had not progressed fast enough to match incentives, she continued. Additionally, least developed countries’ exports were on a downward trend since 2011 and many such countries struggled to compete in global economy. The Sustainable Development Goal targets called for the integration of poorer countries in the global economy; however, the current system lacked inclusiveness and remained unequal. Gains from openness and globalization have not been shared equitably or fairly, she stated. The international community must address that shortcoming with dialogue and action, including through technological assistance and capacity-building for least developed countries. Without action to address those gaps, the lack of trust in trade and trade policy could erode the legitimacy of international trade measures.
Ms. Henderson also presented the Secretary-General’s report on world commodity trends and prospects (document A/72/254), noting that 2016 marked an end of the five-year downward trend in commodity prices. However, the subsequent increase in 2016 prices met with a reversal during the first four months of 2017, as several commodity groups dropped again in price. She stressed that commodity-dependent developing countries must diversify to reduce their vulnerability to commodity price volatility in achieving the Sustainable Development Goals.
In an ensuing discussion, the delegate from Iran requested greater clarity on the Conference’s work to promote regional integration and best practices. Mr. Ulianovschi responded that discussions during the recent high-level panel included a focus on the African region, with a view to establishing larger cooperation to facilitate trade. The discussion included efforts to reduce barriers, including through the promotion of a single-window system in national customs departments to ensure automatic data sharing and exchange.
Jamaica’s representative asked about the impact of regular trade changes and regulatory requirements on banks and financial institutions, to which Mr. Trepelkov said that data on the sustainable development impacts of all financial regulatory efforts was currently limited. Efforts to include all dimensions of sustainable development into the reform agenda are still in their infancy, he said. While it would be too premature to draw conclusions based on the regulatory reforms, preliminary data showed it would likely become more challenging.
MARIO A. ZAMBRANO ORTIZ (Ecuador), speaking on behalf of the Group of 77 developing countries and China, reaffirmed the importance of debt restructurings being timely, effective and fair. Sovereign debt matters should concern both developed and developing countries. It should be considered as a matter with the potential to adversely impact the global economy, he continued, stressing also the need to assist developing countries in attaining long-term debt sustainability. Debtors and creditors must work together to prevent and resolve unsustainable debt situations. Many commodity-dependent developing countries and economies in transition continued to be highly vulnerable to commodity price fluctuations. As such, it was essential to improve the regulation, efficiency, responsiveness and transparency of commodity markets to address excessive price volatility.
He noted with concern the steady increase in the illicit flows of funds, particularly from developing countries, and the negative impact it posed to sustainable development and rule of law. The Group reiterated its call for greater international cooperation to combat illicit financial flows. As the United Nations was the only universal forum where tax matter issues could be discussed in an open and inclusive manner, the Group reiterated the need to upgrade the Committee of Experts on International Cooperation in Tax Matters to an intergovernmental body and provide it with the resources to carry out its work. The Group also reaffirmed that coercive economic measures, including unilateral sanctions, did not contribute to economic and social development. Stressing the need to work towards a freer and fairer multilateral trading system, he stressed the need to implement the Addis Ababa Action Agenda.
INA HAGNININGTYAS KRISNAMURTHI (Indonesia), speaking on behalf of the Association of Southeast Asian Nations (ASEAN), noted that the global economy had undergone a prolonged episode of relatively slow growth following the 2008 financial crisis. In 2016, the global economy experienced the slowest rate of growth since 2009, expanding by just 2.3 per cent. Real international trade growth fell below the world’s gross domestic product (GDP) during 2015-2016 for the first time in 15 years. The global economy also experienced protracted weak investment growth, falling commodity prices and growing vulnerabilities to increased external debt. Despite modest recovery in early 2017, economic growth in many regions remained below the level needed to achieve the Sustainable Development Goals.
In addressing those issues, she stressed the need to enhance international cooperation to mobilize resources for development. Continuous capacity-building was also needed, especially to tackle illicit financial flows, asset return and tax matters. She urged developed countries to fulfil their commitments, as ODA remained the main source of development financing for many least developed nations and small island developing States and an additional $100,000 per year was needed for climate financing. In addition, there was a need for improved market access and enhanced investment inflows for sustainable development-related sectors. International trade was an engine for inclusive economic growth, especially in goods and services related to labour-intensive sectors and rural economic activities. As such, an open, rules-based, transparent, predictable, inclusive, non-discriminatory and equitable multilateral trading system was imperative.
MASUD BIN MOMEN (Bangladesh), speaking on behalf of the Group of Least Developed Countries and associating himself with the Group of 77, expressed concern that merchandise exports of least developed countries in 2015 contracted by 25 per cent. Calling upon members of the World Trade Organization (WTO) to address the marginalization of least developed countries in trade, he emphasized the need for developed and developing members to implement duty-free and quota-free market access on all products originating from the least developed countries. Looking ahead to the eleventh WTO ministerial conference to be held in Buenos Aires, he called for an outcome that produced tangible progress in the areas of relevance for least developed countries. Many of those countries still struggled with a heavy burden of external debt, which continued to present a major obstacle for economic growth and sustainable development.
He called on the international community to undertake measures to address the debt problems, especially through full cancellation of all multilateral and bilateral debt owned by least developed countries to creditors, both public and private. For their part, development partners must increase their ODA and other concessional lending to ensure debt sustainability. Corruption, tax evasion, transfer havens and money laundering had serious impacts on domestic resource mobilization. Increased international cooperation was essential to recover stolen assets and return them to their countries of origin. He also urged donor countries to fulfil their ODA commitment of 0.2 per cent of their gross national income.
COURTENAY RATTRAY (Jamaica), speaking on behalf of the Caribbean Community (CARICOM) and associating himself with the Group of 77, Community of Latin American and Caribbean States (CELAC) and the Alliance of Small Island States, voiced concern about the persistent tendency by some nations to view international trade openness as a zero-sum game as well as a rise in protectionism. Strongly rejecting such policies and attitudes, which ultimately constrained aggregate demand and perpetuated the current low-global-growth environment, he voiced the Community’s commitment to the maintenance of an open, rules-based international trading system as embodied by the WTO.
As trade benefits accrued unevenly and increased competition had led to economic dislocation, he underscored the obligation of policymakers to develop and implement programmes to help workers be reskilled, educated and trained to compete for the technology-based jobs of tomorrow. Governments should also fully address the unique vulnerabilities of small island developing States as well as the persistent economic and social challenges of States in special situations, such as middle-income nations. With the unique challenges that Caribbean [small island developing States] face in the context of sustainable development, we insist that our specific needs and circumstances � especially as they relate to scale, capacity and local context � are also taken into consideration, he said.
Ms. ZAHIR (Maldives), speaking on behalf of the Alliance of Small Island States and associating herself with the Group of 77, noted that small island developing States continued to feel the impact of a slow recovery from the global economic and financial crisis. As commodity-dependent countries, those States were particularly concerned about declining commodity prices, especially in fishing and agriculture. Also contributing to a negative economic impact were the declining performance of their export sectors, reduction in tourism revenues due to the downturn and the impact of climate change on fish stocks and crop yields. Structural constraints faced by island States made diversifying their economies difficult, she observed. Turning to natural hazards, such as recent hurricanes, she said that they were not just one-off events. Instead, they signalled the beginning of an even more challenging recovery processes. Island States had to contend with many systemic factors making recovery and rebuilding more difficult. That process was made possible through additional borrowing, compounding existing debt problems. Though small island developing States were the most highly indebted countries in the world, concessional financing remained elusive because of their middle-income status. As such, the Alliance reiterated its call for a GDP plus criteria to gauge eligibility for concessionary financing to better reflect inherent and structural vulnerabilities faced. Turning to the Economic and Social Council Forum on Financing for Development process, she commended the interagency task force’s work but called for a depoliticizing of the Forum’s activities. She expressed disappointment at the lack of engagement on issues critically important to the bloc, such as climate change and trade.
PABLO JOSA� SORIANO MENA (El Salvador), speaking on behalf of CELAC, stressed the importance of reforming the international financial system, especially the International Monetary Fund (IMF), to enhance the voice and participation of developing countries in international decision-making and establishment of norms in economic matters and global economic governance. In addition, developing countries should scale up international tax cooperation and combat illicit financial flows to mobilize domestic resources for the Sustainable Development Goals. There was also a need to eliminate safe havens creating incentives for the transfer abroad of stolen assets and illicit financial flows. He emphasized the importance of disclosure and transparency in source and destination countries, including in financial transactions between Governments and companies for relevant tax authorities.
He recognized the positive contribution of migrants for inclusive growth and sustainable development in countries of origin, transit and destination. Remittances from migrant workers could be equated with other international financial flows, such as foreign direct investment (FDI) or ODA. He also stressed the importance of debt relief, including debt cancellation and restructuring. Debt restructuring should have as its core element a determination or real payment capacity so it would not compromise national growth. There was an urgent need for the international community to constructively cooperate with the United Nations and international financial institutions to enhance transparency, supervision, regulation and good governance of the international financial system to examine options for an effective, equitable, independent and development-oriented debt restructuring and international debt resolution.
ASHISH KUMAR SINHA (India) stressed that open trade was a means of creating employment and contributing to achievement of the Sustainable Development Goals through greater economic activity and revenues. Developing countries derived significant benefit from an open, fair, rule-based, predictable and non-discriminatory trading and financial system. Trade liberalization could contribute to increased growth by enhancing access to technology, intermediate and capital goods and increased competition, which in turn could reduce poverty through employment creation. He also emphasized the continuing relevance of ODA for several developing countries, especially the more vulnerable least developed countries and small island developing States, although Governments must also expand domestic revenue basis, stop leakages and corruptions and attract investment. The Addis Agenda recognized that the foremost driver of domestic resource mobilization was economic growth requiring Governments to strengthen tax administration and combat corruption.
ZHANG YU (China) said the international community must strengthen policy coordination to promote reforms for a more inclusive and equitable global economy. She called for States to avoid protectionism and promote the integration of developing countries into the international markets. China undertook numerous efforts to facilitate trade and strengthen macroeconomic policy growth on many fronts, including the provision of interest-free loans and assistance to States struggling to repay debts. China additionally promoted digital financial inclusion, as demonstrated in recent reforms for rural financial institutions. Corruption, the illicit exploitation of natural resources, and tax evasion remained significant challenges. In response, China participated in the Skynet operation which recovered 240.8 million Chinese yuan. She called on all States to fulfil their ODA commitments. To that end, China established and provided financial assistance to numerous regional and international development funds.
MARIA ANGELA PONCE (Philippines), associating herself with ASEAN and the Group of 77, said that while there had been a 2.7 per cent acceleration of the world gross product in 2017, many regions remained below the level needed to achieve sustainable development. There remained a high level of uncertainty in the international policy environment and the overall outlook on external debt sustainability in developing countries continued to worsen. She underscored the need for freer and fairer trade through a rules-based, transparent, equitable and inclusive multilateral trading system. She also expressed regret for the emerging mistrust in the trading system and the rising trend to resort to unilateralism and protectionism. This endangers trade as a main driver for inclusive growth, she stressed. As a middle-income country, the Philippines was highly dependent on primary commodities and was thus concerned with the volatility of prices. Noting that her country remained among the fastest growing economies in Asia, she said the Government was working to lower poverty and combat illicit financial flows.
LUM HUI ZHEN (Singapore), associating herself with the Group of 77, Alliance of Small Island States and ASEAN, underscored the need to strengthen the role of the United Nations in global economic governance. Emphasizing that global problems required global solutions, she noted that no one country could have all the answers in today’s interconnected world. In that context, the United Nations must play a key role in ensuring that multilateral institutions worked together in a complementary manner. Moreover, strengthening the relationship between the United Nations and G-20 must be part of efforts to enhance global economic governance. Respecting the mandates of relevant multilateral institutions was also critical. Economic and financial issues are inherently complex, she added. Of course, the current global financial architecture, established over several decades, has to evolve, she continued. In that regard, Bretton Woods Institutions and other international organizations must adapt to the new challenges and be more inclusive to give developing countries a greater say. Stressing the need for an open, rules-based, multilateral trading system, she said that WTO, for all its limitations, was the ultimate forum for all trading nations to work together.
GHOLAMALI KHOSHROO (Iran), noting that his nation had been experiencing economic coercive measures, said it remained opposed to the application of unilateral economic and trade measures against other countries. The use of such measures adversely affected sustainable development efforts of developing countries and generally had a negative impact on international economic cooperation as well as worldwide efforts to move towards a non-discriminatory and open multilateral trading system. Such actions constituted a flagrant violation of the principles of international law set forth in the United Nations Charter as well as basic principles of the multilateral trading system. Iran’s economy had demonstrated its unparalleled potential for expansion and growth. Not only did economic sanctions fail to impede Iran, but they solidified collective resolve to enhance domestic production. Achieving one of the highest global growth rates in 2016 had proven that Iran’s economy could become the most vibrant emerging economy within the next 20 years. Its strategic choice for achieving such sustainable and balanced growth was extensive global partnerships.
TAMARA KHARASHUN (Belarus) said current global conditions did not inspire optimism, and she expressed concern over the decline in global trade. The Secretary-General’s reports on macroeconomic policy painted a complex picture, which emphasized the importance of joint efforts by all States to promote global partnership. The international financial system required favourable conditions to eradicate poverty on a sustainable basis. She recognized the important role of UNCTAD, particularly in research on trade and investment policy. As a middle-income country, Belarus called for coordinated assistance and the cessation of unilateral sanctions. Sanctions, she remarked, had a significant extraterritorial impact on regional economic cooperation. Similarly, she called for enhanced regional integration, as well as the full inclusion of new members in the WTO. Belarus was the only member of the Eurasian Union of States without membership in the WTO. In closing, she urged for an agreement on technological mechanisms to help bridge digital divides.
Mr. GONZALEZ-PEA�A (Cuba) said the international environment was an obstacle for most countries in the South, and structural changes would be urgently required on the economic, commercial and international levels. He called for the mobilization of predictable and unconditional resources for developing countries to meet their development goals, as international public financial flows were insufficient to cover funding gaps. Cuba supported external debt relief, including the cancelation and restructuring of debt, and he urged for the implementation of a fair and development-oriented multilateral sovereign debt restructuring mechanism. His country rejected unilateral coercive economic measures, including the economic, commercial and financial blockade imposed on it. The blockade caused deprivation to the Cuban people, constituted the main obstacle to the country’s development and macroeconomic policy objectives, and caused significant economic damage.
Mr. MASLOV (Russian Federation) stressed that stimulating trade required regional integration. His country had strengthened integration with neighbouring countries through a regional economic union, which now had one service market. By 2025, it would have one oil, gas and energy market. One of the union’s priorities was to focus on sustainable development. By pooling efforts, other integration could establish one economic space from the Atlantic to Pacific. Partnership must be open to all countries and must be done so based on mutual interest and respect. The Russian Federation was broadening cooperation with multilateral financial institutions, including the World Bank and Asian Development Bank. It was committed to the implementation of the financing for development agenda.
Mr. PINEDA-GONZALEZ (Mexico) associated himself with the Economic Commission for Latin America and the Caribbean (ECLAC) and called for the convergence of economic financial tools at all levels. Public policy required partnership and improved public-private investment. Reforms to the international financial system, he said, must be sequenced, phased and gradual and with respect to the structural gaps facing middle-income countries, including Mexico. To that end, all States must work collectively to defend world trade, promote greater financial inclusion, strengthen sustainable management, reduce debt and address illicit financial flows.
ROUA SHURBAJI (Syria) said one of the most important obstacles to development was unilateral economic measures as a means of political coercion against developing countries. She had hoped the Secretary-General’s report on that topic would include an in-depth assessment of affected countries, but it only spoke briefly of unilateral measures, mainly their unintended consequences. She voiced opposition to unilateral economic measures, as they contravened globalization measures by the same Governments that imposed them. The sustainable development agenda called on Member States to refrain from unilateral financial and trade measures, which impeded the achievement of development goals.
JORGE SKINNER-KLA�E (Guatemala), associating himself with CELAC, called for strengthened cooperation on tax matters and illicit asset recovery. He urged for increased attention to commodities, noting that his country’s GDP depended on agricultural commodities which were vulnerable to speculation and market manipulations. Additionally, the impact of climate change as well as other disasters threatened Guatemala’s food security and employment. To that end, he underscored the importance of regulation to mitigate risks and ensure an equitable trade system. He called for the international community to address illicit financial flows. In response, Guatemala promoted numerous domestic actions and policies to enhance asset recovery and international cooperation.
Ms. AL-SHAMMARI (Qatar) said economic crises, high unemployment and debt burdens were all challenges affecting the common global vision of promoting economic growth, especially in developing countries. She stressed the importance of the multilateral trading system, which would contribute to sustainable development and employment creation. It was vital to push forward the Doha Development Round in strengthening the multilateral trading system to achieve the Sustainable Development Goals. Her country supported a United Nations system that would step up efforts to create a favourable economic environment, but opposed the use of unilateral coercive measures that negatively affected the multilateral trading system and economic cooperation.
Ms. OEHRI (Liechtenstein) said her country’s policies and regulations to combat illicit financial flows and criminal activities were internationally recognized, and set in international standards. She emphasized the importance of asset recovery through international cooperation and with trusted legal instruments. Liechtenstein’s financial intelligence unit led the fight against illicit financial flows, and highlighted the linkages with human trafficking, slavery and terrorism. She urged for the strengthening of rule of law and hoped that such national initiatives would be included in the Committee’s work on the sustainable development agenda.
MARIANNE LOE (Norway) said her country allocated 1 per cent of its GDP to ODA, the greater part of which was spent in developing countries. She urged States to utilize ODA in catalytic ways to leverage additional resources of finances, and noted new measures by multilateral banks. Domestic resource mobilization should be decisive and entail more effective tax collection and a broadening of the tax base. Low-income countries should be protected from tax erosion and corruption, she said. Curbing massive illicit flows remained a key priority. Trade was crucial for development and growth, and to that end, she expressed concern that protectionism and isolation would reverse common development. She encouraged a strong sharing system and the use of trade as a development policy instrument, particularly in integrating developing countries into the global financial system and through responsible borrowing and lending. She called attention to signs of new debt distress in some countries and urged States not to repeat expensive lessons from recent history.
CRISTIANE ENGELBRECHT SCHADTLER (Venezuela), associating herself with the Group of 77 and CELAC, expressed concern about the effects of the capitalism crisis. The international community must redefine what was just and equitable. Development processes must be autonomous and respect the sovereign management of natural resources without intermediation of transnational corporations. States must work together to combat plundering of those natural resources and the resulting loss of proceeds from them. Unilateral and coercive measures, she continued, were incompatible with the United Nations Charter and hindered development efforts. Venezuela also called attention to the responsibility of developed countries in financing development and urged them to fulfil their pledge of 0.7 per cent GDP to ODA. Turning to debt, she called for an enhanced analysis to resolve distortions from the neoliberal capitalism model. Similarly, she encouraged the international community to drop prices of commodities, stop the contagion of financial crises and address the negative impact of debt. To that end, she called for the establishment of an international mechanism for restructuring debt.
Mr. ALI (Iraq) noted that developing countries had lower rates of foreign debt to GDP, but the international community must make further efforts to lesson debt burdens. He also called for an increase in humanitarian and cultural support for his country in achieving the Sustainable Development Goals. Such help would allow it to overcome challenges, achieve development and boost prosperity in the entire region. It was essential that Iraq overcame the effects of terrorism and regained its natural resources in achieving development. His State had managed to reduce its budgetary deficit and increase non-oil revenues. Supporting slow-growing economies would help them move towards sustainable development, create conducive working environments and reduce the brain drain of their populations.
KHIANE PHANSOURIVONG (Lao People’s Democratic Republic) said recovery in global trade and strengthened investment would translate into increased resources available for the Sustainable Development Goals. His country had exerted its utmost to mobilize more domestic resources by creating an enabling environment and adopting necessary policies and measures to promote economic growth as well as improve revenue administration through improved tax policy and more efficient tax collection. It had also invested significant resources to improve infrastructure and connectivity and actively participated in regional integration so that trade could thrive. However, as a least developed country and landlocked with a small economy, it needed continued external support such as ODA.
Ms. SRISAWANG (Thailand) stressed the need for better global economic governance as well as strengthened developing country voices in global economic and financial decisions. The developing world also needed free and fairer trade, the elimination of trade barriers and a universal, rules-based, open, transparent, inclusive, non-discriminatory and equitable multilateral trading system. The WTO played a crucial role in dispute settlement and regional as well as bilateral trade were also vital. Adding that efforts were also needed to better finance sustainable development, she stressed the importance of ODA as well as domestic resource mobilization through good governance and domestic and international public-private partnership.
NECTON D. MHURA (Malawi) associated himself with the Group of 77 and the Group of Least Developed Countries. His State strived to respond, adapt and engage in cooperation at all levels, however he noted numerous risks associated with shaky policy and the unequal global economic architecture. Each country had a primary responsibility for its development; however, he said national efforts should be complemented by supportive global programmes, measures and policies to expand opportunities for development. Each country existed under specific circumstances, and all were impacted differently by external shocks. Therefore, national contexts remained the primary detectors on how States respond and implement sustainable development. He welcomed reforms to the development system and stated his country’s intention to seek greater international partnerships.
YEMDAOGO ERIC TIARE (Burkina Faso), associating himself with the Group of 77 and the Group of Least Developed Countries, said his nation had made significant macroeconomic progress characterized by an average annual growth rate of 5.5 per cent. However, despite progress, numerous challenges remained, including a high poverty rate of 40.1 per cent. The Government endeavoured to maintain fiscal viability, including through a robust macroeconomic framework which was the bedrock of the national development plan. He called for an end to protectionism, which distorted trade and was contrary to agreements in the WTO. To that end, he invited developed countries to lift non-tariff barriers. He encouraged the development of a more fair and equitable international trade system, wherein the global trade market would form major economic blocks to work collectively, particularly in Africa. Burkina Faso said there was a need to bolster international economic and South-South cooperation, and combat illicit financial flows. Middle-income countries were particularly affected, and faced additional challenges in servicing debt. In response, he called upon donor countries to provide greater support to mitigate the risk of new debt crises and tackle infrastructure deficits.
PHILIP FOX-DRUMMOND GOUGH (Brazil), associating himself with the Group of 77, said one of the key aspects in achieving the Sustainable Development Goals was growth. Establishment of a recent forum on financing for development was a notable achievement but the outcome could have been more ambitious, as it did not provide enough guidance or lead to the needed results. Trade was needed to promote structural change and sustained economic growth, but developing countries needed an inclusive, fair and transparent system. There was also an urgent need to work further to curb illicit financial flows. That must be a common endeavour as it would never be met without the participation of source, transit and destination countries.
LOK BAHADUR POUDEL CHHETRI (Nepal), associating himself with the Group of 77 and the Group of Least Developed Countries, said the global outlook was still uncertain after the economic recession. Sluggish economic growth, declining ODA and decreasing commodity prices were affecting the health of many developing countries. In least developed countries, the trade balance was worsening, with widening deficits and low preferential market access in key sectors. Such conditions were worse in landlocked countries, where trade access was more difficult and integration was needed to gain a market edge. Stressing the importance of trade as a key economic enabler, he said implementing the Doha Round was in the interest of all WTO members.
GEBEYEHU GANGA GAYITO (Ethiopia) associated himself with the Group of 77 and the Group of Least Developed Countries. He said the commodity sector remained critical, however economic stability of commodity-dependent countries, including Ethiopia, was affected by the global price slump. In that regard, he highlighted the importance of sustainable and productive economic diversification. Achieving structural transformation remained one of the country’s development pillars. Towards that objective, Ethiopia promoted economic diversification by adding value to its primary products, and called for relevant entities to intensify capacity-building programmes in line with national priorities. Ethiopia implemented a national financial inclusiveness strategy and continued endeavours to expand financial services through an inclusion council. He urged all States to measure and track illicit financial flows, as Africa lost billions of dollars’ worth of its resources that could have been used to finance its anti-poverty projects. Ethiopia established necessary legal and institutional frameworks to combat money laundering and financing of terrorism, however those remained global challenges that required enhanced international cooperation and coordination, he said.
TIJJANI MUHAMMAD-BANDE (Nigeria), associating himself with Group of 77 and the Africa Group, said the relevance of ODA could not be overemphasized. Nigeria, like most developing countries, was concerned that the total amount of ODA from developed countries was far below the target of 0.7 per cent of GDP. As such, he reiterated the call on developed countries to meet the target. As a founding member of the WTO, Nigeria was committed to the principle of the multilateral trading system and would continue to comply with its market access commitments. Nigeria called for other countries to grant market access and support a non-discriminatory and equitable multilateral trading system. In that regard, his country would stand ready to support any effort to achieve a single package on trade facilitation, services, agriculture, development and least developing countries issues. The Government established a presidential enabling business environment council, and issued three executive orders to promote business transparency and efficiency. Nigeria also remained committed to the recovery and repatriation of illicit funds to countries of origin, and invited the private sector to participate more in international public funding.
VUSUMUZI NTONGA (Zimbabwe) said trade was needed to promote economic growth, human development and prosperity in reducing poverty and inequalities. It was important for the WTO to have rules that created flexibilities for developing countries to enact policies promoting domestic manufacturing capabilities, stimulate technology transfer and promote access to affordable medicine. Governments across the world derived their wealth and economic power mainly through trade, manufacturing and agriculture. They should also be able to tax, borrow and regulate financial markets, but the current international financial system threatened those abilities owing to its several fundamental weaknesses. He also noted that the problem of illicit financial flows continued to stifle efforts of many developing countries to achieve sustainable development and eradicate poverty, as it undermined the tax bases of those countries. Funds lost through illicit flows should be used to finance development programmes and infrastructure projects. Several studies had indicated that without the problem of illicit financial flows, most developing countries could have achieved their domestic and internationally agreed development programmes.
Ms. HAMDOUNI (Morocco), associating herself with Group of 77, encouraged Member States to adopt a compromise approach to implement development programmes. Her country adopted numerous rigorous macroeconomic policies and reforms to strengthen financial globalization and trade openness. Her Government put together a trade development strategy for 2016 to 2020, and presented its voluntary national report. Morocco continued to promote strong regional South-South cooperation with an emphasis on African partnerships. Illicit financial flows were a major challenge to the region, thus Morocco favoured strengthening measures to combat money laundering and abusive use of financial system
ARTHUR AMAYA ANDAMBI (Kenya), associating himself with the Group of 77, said his country had a high fiscal deficit because of macroeconomic-related development challenges including a low export base and falling commodity prices. Low export earnings had exacerbated the situation of the rising current account deficit, which had further depleted scarce foreign exchange reserves from the high import bill. However, the economy had recorded a growth of 5.9 per cent in 2016, up from 5.6 in 2015. Moreover, Kenya’s public debt remained sustainable. A recent Debt Sustainability Analysis showed that the risk of distress for the current debt level was still low. The recorded rise in debt level was directly attributed to the increase in development spending on infrastructure. That spending was expected to alleviate binding constraints to the productive capacity of the economy, ultimately leading to a decline in debt ratios.
MEHDI REMAOUN (Algeria), associating himself with the Group of 77 and the African Group, said unilateral coercive economic measures should be eliminated. Algeria wished that the Secretary-General’s report, in pointing out studies on unemployment in developed countries due to trade liberalization, also paid attention to similar effects in developing countries, including those where manufacturing and industrial sectors were in nascent stages. While ODA remained crucial, best practices � including those aimed at transforming long-term commitments in immediate liquidities, guaranteed by international institutions � were likely to be an instrumental solution, he said.
Ms. ZAHIR (Maldives), associating herself with the Group of 77 and the Alliance of Small Island States, said international financial institutions must align their policies and lending decisions more closely to efforts in achieving the Sustainable Development Goals. In the case of Maldives, investment in infrastructure was crucial for achieving the Goals � building adequate hospitals, roads, harbours, airports, seaports and houses. Infrastructure projects in the Maldives were directly linked to almost all the Goals. Yet the narrow financial sector in the country did not have the capacity to provide adequate financing for those investment programmes. Moreover, the country needed investments in such programmes in external hard currency, as it had to import almost every material used and the impact on its balance of payments tended to be high. The only option was to go to external financing.
JOSA� LUIS FIALHO ROCHA (Cabo Verde), associating himself with the Group of 77 and the Alliance of Small Island States, said much remained to be done to mobilize adequate and predictable financing to implement the Sustainable Development Goals. The time had come to focus on each State’s specificities and needs, and to adapt responses on a country-by-country basis, he said, adding that a national financial framework could be an important tool to mobilize resources. Emphasizing the real threat of climate change, he said financing and development finance were critical for small island developing States, yet several obstacles persisted regarding preparing viable projects, eligibility and access to finance.
Mr. DONKO (Togo), associating himself with the Group of 77, noted that the major challenge to development was funding and urged Governments to honour financing commitments. However, although ODA had remained vitally important, especially for poorer countries, it was insufficient in meeting all needs in achieving the 2030 Agenda for Sustainable Development. Financing for development was also dependent on public policies that brought in a more favourable business environment. In addition to measures to collect public resources, Togo had improved its ability to collect revenues, increasing its tax base and leveraging resources for development. It had also optimized financing of infrastructure by taking advantage of public-private partnerships and had improved the business environment in attracting foreign investment in infrastructure.
BERNARDITO CLEOPAS AUZA, Permanent Observer of the Holy See, noting with concern the steady decline in international trade in 2015 and 2016, agreed with the Secretary-General’s report that the solution should not be less trade, but better trade. That should be guided by the principles of inclusivity and equity for all and consistent with Pope Francis’s call for an inclusive economy focused on the common good. Underscoring the need to give special attention to least developed countries, he said that even a modest lowering of protective tariffs on some agricultural products could significantly benefit small farmers in those countries. Large external debt variations among developing countries would require careful monitoring and additional capacity-building, as well as possible recourse to further debt relief mechanisms.
The representative of the Common Fund for Commodities said new European Union regulations entering force in January 2018 would hopefully enhance the transparency and efficiency of commodity price discovery, directly affecting the investment climate in commodity-dependent developing countries. Less volatility in commodity markets could improve investments in those countries at the grassroots level of commodity value chains. He expressed hope that the flow of commodities, including South-South trade, could greatly benefit from technological development.
Source: United Nations