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UN to debate financial crisis

UNITED NATIONS, Jun 24 – The UN General Assembly kicks off a three-day high-level conference Wednesday to weigh measures to help the poorest and most vulnerable countries weather the global financial and economic crisis.

Assembly President Miguel D’Escoto Brockmann, the organizer, said the event aimed to "identify emergency and long-term responses to mitigate the impact of the crisis, especially on vulnerable populations, and initiate a needed dialogue on the transformation of the international financial architecture, taking into account the needs and concerns of all member states."

Developing countries, which make up the vast majority of the 192-member assembly, argue that they are paying the price for a crisis that was created by the developed world.

"Although we were not responsible, we are suffering the collateral damage," Martin Khor, executive director for the South Center, a Geneva-based policy think tank for developing countries, said here this week.

Organizers noted that the World Bank is projecting a finance gap of up to 700 billion dollars in developing countries, resulting in additional deaths of 1.5 to 2.8 million infants by 2015 and more than 100 million people tipping over into extreme poverty each year for the duration of the crisis.

Khor stressed that the international response to the global crisis has been undertaken by exclusive clubs such as the Group of Eight (G8) or Group of 20 (G20) while most developing countries have had no say.

"This meeting leaves no doubt that the proper and most fitting venue to discuss this type of problem is the United Nations," D’Escoto said. "After all, we’re talking about global problems and they should be discussed globally."

Nearly 120 UN member states are to attend the parley, including Presidents Rafael Correa of Ecuador and Hugo Chavez of Venezuela, the vice presidents of Iran and Zimbabwe, and the prime ministers of Bosnia, Serbia, Togo and several Caribbean nations.

But in an apparent sign of lack of interest, key developed countries are sending low-level delegations.

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D\’Escoto, meanwhile, said he was "relieved" that a revised outcome document due to be adopted at the end of the three-day meeting has been finalized.

The document is based on recommendations submitted by a panel of economic and financial experts from around the world on immediate and longer-term measures as well as practical steps for reforming the international financial architecture.

These include external financing to make up the estimated one to two trillion dollars shortfall in income from reduced exports by developing countries and the outflow of capital caused by the crisis.

The funding would come from new Special Drawing Rights (SDRs), an international reserve asset, which could be issued by the International Monetary Fund and would be provided on the basis of need.

Other proposals focused on substantial debt relief for poor countries hobbled by the crisis, new and innovative sources of financing for development projects and the need for donors to fulfill their existing bilateral and multilateral commitments for official development assistance.

Khor also said the conference should have a follow-up mechanism, such as a working group of the General Assembly that would monitor implementation of the outcome document and would report back to the assembly.

D’Escoto was tasked with organizing the conference by world leaders during talks on financing and development held in December 2008 in Doha, Qatar.

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