TWN Info Service on Finance and Development (May09/02)
26 May 2009
Third World Network

Economic crisis conference to be postponed?
Published in SUNS #6706 dated 26 May 2009

New York, 25 May (TWN) -- The United Nations conference on the world financial and economic crisis and its impact on development, which is scheduled to be held on 1-3 June, is now likely to be postponed to 24-26 June.

A meeting was convened by the General Assembly President, Ambassador Miguel d'Escoto Brockmann of Nicaragua, in New York last Friday to discuss the postponement, which had been proposed by Brockmann.

At the meeting, almost all countries and regional groupings, including the United States, had agreed to the postponement to 24-26 June. However, in a surprise move, the European Union said that its member states required more time for consultation and for checking with their capitals.

Another meeting will be convened on Tuesday morning, at which a final decision is to be taken.

According to diplomatic sources, Ambassador Brockmann had announced that in the new schedule, the draft outcome document would be ready by 15 June, while the new dates for the conference would be 24-26 June.

The General Assembly President had been in consultations with many Ambassadors individually and in regional groupings. Just before the Assembly meeting convened, it was thought that there was consensus on the postponement and the new dates.

However, the EU move has rendered the situation uncertain as no formal decision could be taken, and the final decision will now have to wait until Tuesday.

According to diplomatic sources, Ambassador Brockmann had told Ambassadors that in his view there was a need to postpone the Conference because several heads of state that wanted to take part could not come on the original dates of 1-3 June.

Another factor is that there is little time left to negotiate an outcome document, since negotiations on the document only began last week.

The General Assembly President had released a new outcome document early last week, which replaced an earlier version which had been found by many delegations to be too long and filled with rhetoric that was unusual in such a UN document.

The new draft is brief on the causes and impacts of the crisis but rich in proposals for "prompt and decisive action" in four areas: making the stimulus work for all; containing the effects of the crisis and improving resilience for the future; improved regulation and monitoring; and reforming the international financial and economic governance.

In order to implement the proposed measures, the draft has a final section on "The Way Forward", where perhaps the most interesting ideas are placed. Foremost among these is the proposal to set up a new Global Economic Council under the UN to provide coordination and oversight of responses to address the global challenges. This is probably the most important and controversial idea in the document. This kind of strengthening of the UN's role is disliked by the powerful countries.

Another idea is to set up a Panel of Experts (drawn from academics, social movements and the private sector) to give advice to the UN General Assembly on economic, financial, trade and regulatory issues and actions.

The draft also calls for a review of how the UN Economic and Social Council (ECOSOC) can be strengthened and to review the agreement between the UN and the World Bank and International Monetary Fund.

The draft also wants the Conference to remain "open". To follow up on the conference, seven working groups are to be created on the global stimulus; finance for restructuring and survival; trade and debt relief; global and regional reserve systems; regulation and coordination of the global economy; restructuring international institutions; and the role of the UN.

According to diplomats, the developing countries are keen that the Conference take bold decisions on helping them cope with the crisis, on reform of the international financial system, and on setting up new mechanisms to coordinate global policies.

They do not believe that the current institutions (such as the IMF and the G20) can play this role, as they are controlled by the developed countries. The United Nations, which has universal membership, is best placed to coordinate global policies which are in the developing countries' interests.

However, many of the developed countries are reluctant to have the UN play a stronger role, as they are comfortable with the status quo in which the institutions they dominate (G7, G20, IMF, etc.) control the show.

The problem, of course, is that the developed countries and the dominant institutions have done a very bad job, as they promoted the lax financial policies that have led on to this extreme crisis.

Thus, there is an impetus for the developing countries, which are the victims of a crisis they did not create, to have new and more representative institutions set up in which they can have their rightful say. +