New Zealand associates itself with the statement delivered by Singapore on behalf of the 3G countries; and particularly supports the call to formalise the participation of the UN Secretary General and his “Sherpa” at G20 Summits and preparatory meetings.
We thank the Co-Chairs for organising this series of meetings which have provided a valuable opportunity to hear directly from experts on a range of issues relating to the global financial crisis.
In the past, the United Nations’ relationship with the Bretton Woods Institutions (BWIs) has been “patchy”, to say the least.
It’s therefore good that so many member states, from a diverse range of economic outlooks, supported briefings from such bodies.
Likewise, we’re pleased the President of ECOSOC participated in the recent BWI meetings in Washington DC; although, separately, we also recognise the importance of ECOSOC reviewing its own functions in the light of the financial crisis.
All this has added to our knowledge about both the current state of the global financial crisis and the steps being taken by various bodies to address its impacts; and should also have improved the relationship between the UN and the BWIs.
If there’s a single message we can take away from all this, it’s the complex nature of the international financial system, and the specialist knowledge and expertise required to identify options and solutions.
Today’s session, entitled
"Strengthening the role of the United Nations in Global Economic Governance, is highly relevant because, when the financial crisis began, it disclosed alarming gaps in global economic governance. "
New Zealand’s main interest at that time was ensuring that markets remained open, that there was sufficient liquidity (including trade finance) to prevent financial system collapse, and that we did not react in a way (for example, with protectionist trade restrictions and tariffs) that would only have exacerbated the crisis.
There was little doubt that action was required, and quickly.
We therefore supported the emergence of a forum that enabled cooperation and effective action to be taken by both emerging and established economic powers; and believe the G20 had both the critical mass and the flexibility to move with speed and effectiveness, and that its summit outcomes helped address the immediate effects of the crisis.
What Helen Clark described as its “decisive actions” – and, let’s be clear, also its rhetoric – helped avert what, at the beginning of last year was shaping up to be a global depression that could have been years in the recovery.
The G20 has, of course, been with us for some time, meeting as finance ministers, and has only recently (and largely in response to the crisis) been elevated to a full leaders’ summit; whether it continues in that form once current concerns are behind us is for its members to decide.
Despite those comments, however, there are still significant stresses and pressure points in the global economy.
Without resolution, there’s the prospect of an unbalanced and unsustainable recovery, which might increase the risk of protectionist responses; so the G20 should continue concentrating its attention on those issues that prompted its re-structuring as a leaders’ summit, dealing with the aftermath of the crisis and taking measures to avoid a recurrence.
But, even if it is the “premier international economic forum”, the G20 is, both by definition and by choice, neither global nor universal.
This United Nations is the only global body with universal participation, unquestioned legitimacy and convening power.
Only the UN has the range of development and other specialised agencies that can deliver many of the required, practical outcomes, on the ground.
It should, therefore, have a role to play in any discussion of global governance issues, as these are of vital importance to all states.
In the economic context, the challenge, for the UN, is to make a timely and relevant contribution; because, without that, we can have no claim to a role and, as the 3G statement makes clear, will have wasted our legitimacy and our universality.
In our view, that requires that we acknowledge the reality of the market place and its mechanisms – a market that has, after all, been with us in various, developing forms for, quite literally, thousands of years.
Further regulation at both the national and global levels may well be required to curb any damaging excesses; but there is little point in calling for – let alone implementing - such controls unless we have a clear understanding of their impact on market efficiency, unless we have drawn on the experience of others, and unless we can properly identify the benefits as against the likely costs.
Chrystia Freeland referred to the debate on these issues between politicians and bankers.
Well, I’m both a former politician and a former banker, and, as such, I know that political rhetoric will always be trumped by a responsible and independent cost-benefit analysis; and, in designing any new economic order, we should expect nothing less.
Nothing is gained by the UN and its members – and credibility and relevance will be lost – if all we do is continue to recite the respective mantras of pro- and anti-market sentiments.
That’s the stuff for academic classrooms and for abstract, philosophical debating chambers.
If the UN is to be relevant in this debate, it must move beyond those norms, and must offer meaningful, workable, cost-effective solutions that have full regard to the reality of the marketplace.
It’s also important to avoid duplication of effort.
Our objective should be to ensure appropriate and timely responses to the challenges presented by the economic crisis.
While the G20 took the early initiatives, other bodies, including this United Nations, also have a role to play within their particular areas of expertise or mandates.
The briefings the Co-Chairs arranged from the BWIs and others – and the crisis itself - clearly showed, for example, that the IMF’s mandate has not kept pace with the changing global economy; so we welcome the reforms described in the various presentations.
To encourage, promote, and achieve economic recovery, there is also a need to avoid prolonging any protectionist measures that might have been taken as a perceived short-term solution to economic difficulties, and that we maintain political momentum towards open trade.
Agricultural protectionism, particularly, is seriously damaging to developing economies - restricting their ability to sell.
As an agricultural producer, New Zealand knows what can be achieved through free and open markets, and urges the expeditious conclusion of an ambitious and balanced Doha Round which would help stimulate global economic recovery and growth, and from which, as was said earlier, developing countries have the most to gain.
And, if our efforts here are to have any meaning, we should define what we might regard as successful outcome for our discussions.
Is it the occasional headline – because so far, as Chrystia Freeland made clear, for these discussions and those that preceded them, there have been precious few headlines – and the satisfaction of some well-delivered criticisms?
Or is it a world where small farmers, barely beyond subsistence, can, at a fair price, freely sell their surplus produce to the world?; where the poor can get meaningful, productive jobs that lift them from poverty?; where small, local businesses (the lifeblood of all economies) can secure the funding and the access to markets to sell their goods and services?; and where governments can deliver quality education and health services, and help those in need.
History has shown how these are best delivered; and it’s also shown how they can be destroyed.
This United Nations was established, not just because of war and human rights abuses; but also in response to the economic depression and recessions of the 1930s; and, to address those needs, the organisation assumed a global mandate to promote economic and social development.
That mandate still exists; and, today, we have a global responsibility to be relevant to those objectives.
Helen Clark, UNDP Administrator, was one of three panelists who introduced the Ad Hoc Working Group’s discussions.
Chrystia Freeland, Global Editor-in-Chief of Reuters News, was another of the three panelists who introduced the Ad Hoc Working Group’s discussions.