Jul 12, 1985
UNITED NATIONS: THIRD WORLD CALLS FOR STRENGTHENED MULTILATERALISM.
GENEVA, JULY 10 (IFDA/CHAKRAVARTHI RAGHAVAN) — Third World countries called Wednesday for strengthened multilateralism and asked the UN General Assembly and the Economic and Social Council to address the inter-related issues of trade, money and finance and debt in an integrated way.-Algeria, India, Indonesia and Venezuela all called for coordinated efforts to tackle these problems and restore sustained growth in world economy and development in the Third World.- Speaking in the general debate in the Economic and Social Council, all the four highlighted the grave problems faced by the Third World in the face of weakening multilateralism, and called for structural and systemic reforms.- The Director-General of the ILO, Francis Blanchard, focussing mainly on the unemployment situation in the Industrial countries argued that with inflation under control, the Industrial countries should take adequate measures to expand growth to levels where unemployment could be overcome.- Algeria’s Bashia Ould Rouis said there was a continuing crisis in the world' s political and economic environment.- In the political arena, tensions and rivalries for power and the arms race as a source of considerable concern.- International economic cooperation was marking time while poverty was spreading and the development prospects of the Third World remained dark.- The difficulties facing some of the Industrial countries could not be compared to the problems of the Third World - the external indebtedness, the worsening trade and commercial conditions, renewal of protectionism, stagnation or even drop in ODA flows.- Expansion of growth in a few Industrial countries could not result in expansion of the world economy.- The recovery would remain fragile and precarious so long as there was a sectoral approach and fragmented action, and the problems of the Third World were marginalised.- Only a concerted consideration of problems and coherent and integrated solutions through global negotiations could solve the ills of the world economy.- Enrique Ter Horst of Venezuela warned that if international economic policies were not corrected, there would be another explosion of the debt problem.- The slowing down of the U.S. and Japanese economies would make debt servicing difficult.- Ter Horst described as "irresponsible" the view (put forward by the U.S. in the debate) that fall in energy prices would promote growth in the world economy.- "The U.K., Norway, and Alaska will have to shut down their oil production, and past investments will be lost, if prices dropped", the Venezuelan delegate said.- "Investments in alternative energy sources, and with it the transition to a non-oil energy era, will suffer the same fate, and problems of major oil producers who also have major debt problems, would impact on the international monetary and financial system".- "Producers and consumers should jointly seek solutions to stabilise the prices and markets for the future", he added.- The Indian delegate, Muchkund Dubey, said it was time the principal economic forums of the UN - the ECOSOC and the General Assembly - debated the critical issues and reached conclusions.- The growing convergence of ideas on the changes needed in the international monetary, financial and trading systems should be seized, and the discussions in ECOSOC and the UN General Assembly should result in a preparatory process that would lead to the convening of the International Conference on Money and Finance for Development, as called for by the non-aligned summit.- All the indicators and developments showed that the structural and systemic problems of the world economy would not be solved by cyclical upturns, but only through cooperative intergovernmental actions.- A number of reports over the last 2-3 years clearly brought out the deficiencies in the present systems of trade and money and finance, and the directions of change needed.- The present approach of tinkering in one area without tackling the fundamental issues and without regard for consequences in other areas had been shown to be utterly inadequate.-. The ad hoc arrangements instituted after the collapse of the Bretton woods systems and its rules, had resulted in "a dismal failure to achieve any of the principal objectives of the articles of agreement of the IMF".- The fund did not have necessary authority to ensure adequate coordination of macro-economic policies, nor was it able to exercise effective surveillance on major industrial countries.- And so long as the surplus and reserve currency countries remained outside the purview of the IMF surveillance, and acceptance of policy advice of the IMF was left to the discretion of the major countries concerned, it was a misnomer to call it IMF surveillance.- Macroeconomic policy coordination among a limited group of countries outside multilateral framework (as agreed to recently by the group of ten in Tokyo) was hardly a response to one of the most important and urgent needs of international cooperation.- Despite the progress in its short-term management, if the debt problem was not seriously tackled and growth reactivated in the indebted countries, it would continue to be a standing and ever-menacing threat to the stability of the international financial, monetary and trading system.- In the area of trade, the preservation of the multilateral trading system was an essential pre-requisite to its strengthening.- The proclaimed allegiance of Industrial countries to GATT rules and principles and to free multilateral trading system "must be demonstrated to be serious and sincere through individual and joint actions to dismantle restrictions imposed in violation of GATT rules".- The real test would lie in the progress to bring trade in textiles under GATT rules.- But even as proposals were being made for new initiatives in trade liberalisation, the discriminatory and restrictive MFA regime was being tightened and made more discriminatory.- Third World countries were bound to take the past and continuing present actions of the Industrial world as an indication of future intentions.- There could also be no question of Third World countries agreeing to their attention being "diverted to new ventures and themes alien to jurisdictional competence of GATT".- Indonesia's Amb. Poedji Koentarso said the Third World countries continued to suffer hardships due to asymmetric inter-dependence and uncertainties in the world economic situation.- The adverse external environment posed a very serious threat to their development and could undermine their economies.- The International Community should give concerted attention to the inter-related problems of money, finance, debt and trade.- For Indonesia, as for other ASEAN countries, a new round of Multilateral Trade Negotiations would be meaningful only if it would result in liberalisation of trade in agriculture, tropical products, natural resource based products, textiles and other products of interest to the Third World.- Also there should be continued commitment to the principle of special and differential treatment for Third World countries on a non-reciprocal basis.- There should also be higher priority to the incomplete work of the Tokyo Round and the 1982 GATT Ministerial meeting than to new items.- There was also immediate need of attention to commodity trade issues.- The current situation where there was a reverse flow of resources from the Third World to Industrial World should be corrected, and no efforts spared by Industrial countries and international financial institutions for increased mobilisation of resources in favour of the Third World.- Unstable and misaligned currencies showed that the international monetary regime was not well adapted to needs of world development.- Indonesia only hoped that the UN Secretary-General's view that there was now a better recognition of the problem in Industrial countries would lead to the convening of the International Conference on Money and Finance for Development, called for by the 1983 non-aligned summit in New Delhi.-