At the closing of the UN Conference on the Financial and Economic Crisis and its Impact on Development, governments adopted an outcome document reflecting months of negotiations. The following analysis looks at 7 key issues that civil society deemed crucial for the success of the conference.
27 June, 2009
From the Global Social Economy Group - ANND, NGO Committee on FfD, CIDSE , New Rules for Global Finance Coalition, EURODAD, AFRODAD, Third World Network, Social Watch - Third World Institute, LATINDADD, UBUNTU Forum, ITUC, Women’s Working Group on Financing for Development, AWEPON
Today, at the closing of the UN Conference on the Financial and Economic Crisis and its Impact on Development, governments will adopt an outcome document reflecting months of negotiations. The following analysis looks at 7 key issues that civil society deems crucial for the success of the conference. Although some progress was made on a few issues, the overwhelming majority of outcomes falls far below what is necessary to provide developing countries with the resources and tools they need to deal with the crisis.
| Key issue | What’s needed & why | Outcome document | Score |
| Debt : World Bank estimates 40 countries heading for debt crisis | Cancellation: No country should have to pay debt at the expense of its own population Moratorium: A temporary halt to debt repayments will help ease the debt burden Work out mechanism: A fair and transparent debt framework to end the vicious cycle of indebtedness | · Recognises the urgency and need for extraordinary measures · Mentions the solution is a combination of debt relief, grants, debt standstill and a more structured debt framework · Does not commit to do anything more than explore and consider these solutions · Leaves countries to fend for themselves | 2/5 |
| Conditionality: Rich countries can borrow and spend billions to stimulate economies and pay for social safety nets. Poor countries are forced to freeze wages and cut social spending | Counter-cyclical measures: Developing countries should have the right to create jobs and social safety nets to deal with the impact of the crisis | · Recognises that many developing countries have been calling for “greater policy flexibility” · Does not call for an end to conditionality · Leaves countries to make unpalatable choices: taking out loans that force them to cut social services vs. risking liquidity crisis | 1/5 |
| Tax: Over $500 billion in revenue is lost by developing countries through corporate tax evasion and avoidance | An end to bank secrecy and tax avoidance: Make tax havens illegal and require banks to open up their books to scrutiny An Intergovernmental Tax Organisation: Nothing short of a body that formulates globally enforceable rules can stop tax dodging | · Recognises the problem · Calls for further cooperation · Requests ECOSOC to look into strengthening international institutions | 3/5 |
| Additional resources: According to DESA $1 trillion extra is needed to cushion the blow of the crisis to the developing world | Aid: Donor governments must fulfill promises already made by delivering on time-bound ODA commitments Special Drawing Rights:The IMF’s new SDR allocation should be divided according to the needs of developing countries and SDRs should be regularly allocated by the IMF Stimulus for all, not just the rich: Developed countries should commit at least 1% of their stimulus packages to developing countries Innovative resources: A financial transaction tax can raise important funds and discourage excessive speculation | · Confirms ODA commitments · Asks for early implementation of SDRs allocated through the IMF, but does not call for developing countries to get a greater share · Provides for no agreement on the future role of the SDRs · Does not call for any proportion of stimulus packages to be allocated to developing countries · Commissions a report on innovative resources, but their use is to remain voluntary | 1/5 |
| Financial architecture reform: The same institutions that created the crisis are now back in business without sufficient reforms in sight | Reform of the institutions: The IMF and World Bank should be reformed along principles of democratic governance and made to work in coherence with the UN system | · Recognises need for deeper and quicker reforms of IFIs and includes a timeline · Provides no concrete guidelines for this reform | 2/5 |
| Global governance: The global economy must be overseen by a representative and accountable institution | Global Economic Council: A body should be set up within the UN, the only legitimate global governance institution, to oversee the global economy | · No mention of the Global Economic Council | 0/5 |
| Follow up to the conference: A strong follow up mechanism is needed to ensure that the outcome document goes beyond just nice words | Working groups: In order to get action on the commitments made, working groups on specific themes need to be created and start work immediately Global expert panel: A panel should be created to advise the UN and other institutions | · The General Assembly will create one ad hoc open ended working group to report back by September 2010 · ECOSOC is asked to “consider …the possible establishment” of an ad hoc panel | 2/5 |
| Total Score: | 11/35 |