Global Policy Forum

Meltdown Could Derail UN Development Agenda


By Thalif Deen

Inter Press Service
February 26, 2009

Asked whether anybody has delivered a cheque or whether he will see the money at all, he would only say: "I am very much encouraged, even during the crisis of these financial problems, that [world] leaders are committed to see the realisation of the MDGs." And then the secretary-general added: "I hope that this will be implemented"- even as he was reminded that one European Union official had warned last month that donors who promise to meet their pledges are just "lying". Given the gravity of the situation and its possible impact on the U.N.'s development activities, the 192-member General Assembly is planning to hold a special session on the financial crisis on Oct. 24.

Ambassador Anwarul Karim Chowdhury, a former U.N. under-secretary-general and high representative for Least Developed Countries (LDCs), says the present global financial crisis would have "a major slowing down effect" on the momentum that is needed in the remaining years for the achievement of the MDGs by 2015. "It would be nearly impossible for any of the governments of industrialised countries - the traditional donors - to even maintain the current level of official development assistance (ODA), not to speak of any increase for MDGs," he said. That would also have a debilitating effect on the capacity of development financing organisations, he added. Asked if the current crisis will eventually reach out to the development activities of the United Nations, Chowdhury told IPS: "Yes, very soon, I believe." The upcoming U.N. conference on Financing for Development in Qatar in late November would face "a serious challenge in getting a worthwhile outcome in favour of the developing countries". The worst victims would be the 49 LDCs, described as the poorest of the world's poor, because unlike other developing countries these are least attractive for foreign direct investment (FDI) that by itself would see a decline, Chowdhury noted.

Anuradha Mittal, executive director of the Oakland Institute, which has done several studies on issues relating to international trade and development, told IPS the ability of the United Nations to carry out development activities is already adversely impacted by the failure of rich nations to fulfill their promises. For instance, even prior to the financial crisis, the credibility of the G8 countries - the U.S., Britain, France, Germany, Italy, Canada, Japan and Russia - was low given they still haven't met their 2005 aid commitments of doubling aid to Africa.

In fact, between 2005 and 2006, Mittal said, overall aid to Africa increased by a mere 2.0 percent, excluding debt cancellation operations, while total development assistance to all recipient countries, net of debt cancellation, actually decreased by 2.0 percent. "Given this existing lack of political will and commitment, it will not be surprising to see rich nations use the financial crisis, a result of their own policy failures and the lack of effective regulatory mechanisms for Wall Street, to renege on their pledges, while their financial crisis trickles outside their borders to impact communities and the working poor worldwide," she added.

Although all membership dues, officially called "assessed contributions", are mandatory, the funding for U.N. agencies such as the U.N. Children's Fund (UNICEF), the U.N. Development Programme (UNDP) and the U.N. Population Fund (UNFPA) are voluntary. The bulk of the funding for these agencies, which are involved in social and economic development, comes primarily from the United States, Japan and the Western European countries. If the crisis continues, it is likely that at the annual conference next month where countries pledge funds to various U.N. agencies, most donors would reduce funding arguing that their countries are going through a recession.

James Paul, executive director of the New York-based Global Policy Forum, told IPS the financial crisis is extremely serious - "and of this there cannot be any doubt". It is bankrupting companies and it may also bankrupt states, he added. "We may be looking at a future of extreme disorder in social, economic and political life," he said. But this kind of system-transforming event surely demonstrates that a strong global authority is missing and is now needed more than ever. For this, there must be resources, he added. "If governments instead continue their previous set of priorities, in which the United Nations and joint action on global problems is the lowest priority, then surely chaos will prevail," said Paul. The leaders of the rich countries have no problem finding hundreds of billions of dollars to bail out financial firms, or to fund their militaries, but they are having difficulties finding tens of millions to address hunger, poverty and other pressing tasks through the United Nations, Paul declared. "This tells us that the old order is dead, both morally and practically, even before it breathes its last," he said.

Rob Vos, director of the Development Policy and Analysis Division at the U.N.'s Department of Economic and Social Affairs, told IPS that at the Development Committee meeting of the International Monetary Fund (IMF) and the World Bank last weekend, donor countries indicated they would make all efforts to live up to commitments and not let that be affected by the financial crisis. "The only thing we can do is try and keep them to their promise," he said. "The crisis no doubt will hit, and in some cases it will hit hard, on developing countries' economic growth and this will make achievement of the development agenda all the more challenging," Vos told IPS. While the United Nations has no direct role in managing the present crisis, it should take a lead in seeking new ways to deal with the more systemic aspects of the crisis and initiate discussions about fundamental reforms of the international financial system, he added.

Chowdhury said it is necessary that Secretary-General Ban Ki-moon come out urgently with his views in a public statement on the impact of the financial crisis on the global development programmes both bilateral and multilateral. The member states and the U.N. system could then act on the basis of his report and recommendations at the special session planned on Oct. 24, he added. "Just hoping that the MDG pledges would be met is not enough - we need the secretary-general's forward-looking leadership," Chowdhury said. This is the critical time for him to show that, bearing in mind particularly his New Year commitment to the world's poverty-stricken "bottom billion", Chowdhury declared.

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