UN adopts text to assist developing nations under recession (Roundup)

By JT Nguyen Jun 26, 2009, 21:20 GMT

New York - The UN General Assembly adopted Friday a plan designed to meet demands by developing countries hard hit by the global recession, including stimulus packages worth over 1 trillion dollars.

The 192-nation assembly adopted the text without a vote and allowed some countries, including the United States and Canada, to voice reservations about the feasibility of implementing some of the demands.

The adoption of the so-called outcome document capped three days of debate. More than 140 government representatives and scores of non-government organizations spoke, most of them to bemoan the state of the world's financial and economic crisis.

The 15-page document reflected some demands of developing countries as well as least-developed countries. Developed countries for example had the final say about a proposal to more tightly oversee international finance, and the document rejected a proposal to impose new regulations on world finance.

In the final document, rich countries are blamed for causing the recession, and poor countries are portrayed as the real victims. Wealthy nations are called upon to provide additional funding in the form of stimulus seen in the United States and some European nations.

The UN has predicted a fall of 2.6 per cent in the world's gross economic product in 2009, the first such decline since World War II, threatening 'calamitous human and development consequences.'

Creditors are urged to honour their commitments to debt relief in the document, but debtors are also called upon to show a sense of responsibility.

The General Assembly called for increasing global liquidity to help overcome the financial crisis, and underlined the urgent need for the implementation of the first step - an allocation of 250 billion special drawing rights (SDR) for poor countries.

The arrangement allows the recipients to convert the SDR to one of the currencies approved by the International Monetary Fund (IMF), which is responsible for the SDR basket.

Reforms of the IMF and World Bank that allow more developing economies to the decision-making table are seen as key to the success of the proposals, as is strengthening the United Nations system.

The United States pointed out that the United Nations is not equipped to handle some of the tasks mentioned in the document, particularly those dealing with foreign exchanges, the World Trade Organization and the complex funding usually adminsitered by authorities of the World Bank and the International Monetary Fund.

The Czech Republic's envoy, speaking on behalf of the European Union, praised the adoption of the document, and made no reservations.

The US and Canada however were concerned about issues of immigration and debt relief, and they warned the UN not to duplicate the work of other financial organizations like the World Bank and IMF.

Poor countries used the opportunity of the UN debate to blame the rich ones for the global recession and the consequences on developing nations.

One key provision in the document called for the implementation of the commitment of the G20 - the world's wealthiest 20 countries - to provide additional funds of 1.1 trillion dollars to revitalize the world economy. The commitment, which was made in London in April, would give a limited share of 50 billion dollars to low income countries.

'We call on the G20 to further consider addressing the financial needs of developing countries, especially low income countries. We call on the G20 to follow through with the commitments and to monitor the implementation of them,' the Assembly said in the document.

The G20 is scheduled to meet in Pittsburgh in September to pursue their discussion on the world economic situation.

During Friday's debate before the adoption, Brazil's Foreign Minister Celso Amorim, whose country's emerging economy appeared brighter than that of many other developing nations, said the UN debate had brought together the world to deal with the recession.

'The fact that we have been able to agree on (a) balanced and ambitious outcome document is a testament to the vitality of the UN,' Amorin. 'It has disproved many of the skeptics.'

G20 member Turkey urged the group to deliver on its promise to make available over 1 trillion dollars to the poor.

Envoys from the Pacific small island states said in a joint statement that they were grappling with both the economic downturn and the effects of climate change.

The group said it has experienced a significant drop in export demands from customers in the West. 'Our trade balance and official foreign reserve levels will also be negatively affected, compromising our ability to weather economic fluctuations in the future,' the group said.