January 12, 1999 United Nations - Foreign Minister Clement Rohee of Guyana, the new chairman of the Group of 77, has described the international monetary system as "severely flawed."
"This system holds as much risk for devastating failure," he said, at formal ceremony to mark the turnover of the G-77 chairmanship from Indonesia to Guyana. The foreign minister said that the recent financial turmoil in East and South East Asia has "brutally demonstrated" the system's incapacity to safeguard against currency speculation and the destabilizing cross-border movement of amounts of capital with all of the swiftness allowed by today's technology. "The contagion effects of the financial and now economic crises of this once prospering region have resulted in a threatened global economic recession. There are obvious lessons to be learnt and preventive measures to be taken," he added.
Rohee called for systematic review of the mechanisms of the international monetary system and its management of global capital and investment with a view to modifying what exists and if warranted, creating new structures which better serve current global needs.
The debate on the reform of the Multilateral Financial Institutions has become increasingly resonant since the disastrous response of the Bretton Woods institutions to the Asian financial crisis, he noted. "There is now an ever growing con census on the need to create a new financial architecture, to retool existing institutions for anticipatory and preventative action in order to preserve and build upon the gains of past economic progress and thus contribute to the realization of genuine human development," he added.
"Our aim should be the democratization of the international institutions so that they might better defend the interests of all their clients. We must begin to engage, along with the industrialized countries, in a profound examination of the issues related to the reform of the International monetary and financial system," Rohee said.
Effectively, developing countries must negotiate for an international monetary and financial environment which facilitates the development priorities of the South, he added. Rohee said that the raison d'etre of the Group of 77 and China - the largest association of developing countries in the world today - has at no time been more patently vindicated than now, at the dawn of a new era, when priorities of the South continue to be subsumed by the imperatives of the North.
The dialogue between the North and the South has fallen silent for some time now, and the international development issues have been all but eliminated from multilateral negotiating agendas, he said. "The global economic outlook at best is bleak. Three and a half decades into our existence as a deliberative group, the G-77 countries remain on the periphery of policy and decision making in the global economic system," Rohee said.
As globalization has taken hold, and its philosophy has taken root, the South has lost ground in the global arena, not only in economic terms, but equally in the replacement of its priorities on multilateral negotiating agendas, he added.
High on the 1999 G-77 agenda are preparations for an international conference on financing for development, the South Summit in Havana in 2000 and follow up on the major UN conference on issues relating to social development, women, the global habitat, population and development and the environment. "Experience has shown that the agreements reached at these summit meetings are yet to bear full fruit. These disappointing yields have been largely due to grossly inadequate financing and equally disappointing technical transfers," he added. A frank analysis of these short-comings together with renewed political will to remedy them can yet put these outcomes back on track.
The mid-term review of the SIDS Conference and the Barbados Action Programme scheduled to take place this year offers a fresh opportunity to satisfy the aspiration of a group of states which is especially vulnerable to economic adversity. "We must work to ensure the success of that review," he added. "As our Group intensifies its pursuit of international development cooperation through multilateral negotiations, and effectively renews its dialogue with the North, we cannot lose sight of the need to fortify our positions through broader and more consistent South-South cooperation", Rohee said. "As we celebrate this the thirty-fifth Anniversary year of our Group's existence, we are challenged not only to consolidate our past gains, but also to generate new initiatives which respond to a global environment in constant transition", he added.
Group of 77 Web Site
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