President Donald Ramotar yesterday issued a call at the United Nations Headquarters, New York, for a clear agenda of concerted efforts and greater attention to addressing the circumstances of small, vulnerable states.
President Ramotar was presenting a statement on behalf of the Caribbean Community at the High-Level Thematic Debate on the State of the World Economy and he pointed out that the UN has an important role to ensure that all concerns are taken into account and in the fashioning of the global response.
The Guyana leader was speaking in the context of the persistent adverse state of the world economy which remains a matter of global concern, and he emphasized that this demands that the United Nations address itself to the attendant challenges.
“Invested with the hopes of the world’s citizens, and with the mandate of its Charter, the UN has an obligation to ensure that the global response to these challenges is inclusive, effective and sustained,” President Ramotar said in underscoring the responsibility of the UN.
He noted that some 200 million people, including more than 75 million young people, are reported to be out of work and all of these factors have had knock-on effects on the availability of domestic and international financing for development, as well as multiple socio-economic implications.
Pathologies
Ramotar highlighted that the CARICOM reality “reflects a number of these pathologies: slow growth; high unemployment, particularly among youths; high levels of indebtedness and limited policy space for transformative action; depressed tourism receipts; and external threats to legitimate engagement by some of our member states in the financial services sector.”
The Guyanese leader also argued that “middle income status, viewed through the prism of GDP per capita, has become an albatross, belying the real challenges faced by our countries and constraining access to much needed resources. Crime and violence are the worst manifestations of the challenges faced in our societies.”
He then noted that CARICOM economies have been significantly impacted, particularly in the services and financial sectors, given their heavy dependence on services and on trade with, and tourism flows from, North America and Europe.
“Contracting demand in those countries resulted in a virtual collapse in tourism and in the prices for many of our exports,” he said, adding that “this situation, coupled with unfair regulatory action against the financial services sector has caused major economic dislocation in a region with limited scope for diversification.”
Ramotar acknowledged that just as the Caribbean made no contribution to the financial crisis but faces major economic devastation as a result, in the same way the countries in the region face potential decimation by a climate crisis caused by others.
“Rio+20 will be an important opportunity for forging a comprehensive response to the challenges of sustainable development and I hope we will grasp that opportunity,” Ramotar stated.
He also drew attention to the fact that while the G-20 action may have helped to forestall a deepening of the crisis and to mitigate some of its worst effects, “CARICOM believes that the pace and range of actions taken by the international community have not been commensurate with the severity and urgency of the crisis.”
Very little
Ramotar said that very little has been accomplished in improving the working of the international financial system.
He noted that “there is little evidence to suggest that there is better regulation of the global financial system, (and) “even today some of the largest private financial institutions of the world are still coming under threat.”
Ramotar posited that the current global reforms are not as ambitious as desired and the mandates of and representation in the IFIs have not changed substantially.
“Even the reforms being contemplated do not take account of the growing influence of the developing world as a whole – developing countries will drive 80% of the global demand – much less address the concerns of the small countries. How do we ensure that account is taken of this reality?,” he questioned.
Faced with this reality, Ramotar maintained that “it is imperative that the international community craft effective solutions not only to the larger issues at the heart of the global downturn, but solutions that also respond to the peculiar development challenges of the small vulnerable states of our region.”
Countries such as those in CARICOM, because of their economic size, are often lost in multilateral considerations for urgent action, Ramotar added.
He also pointed out that “while the international community is prepared to explore new approaches, policies and initiatives considered taboo or morally hazardous in the past, for the developed countries who now find themselves in difficulties – with huge debt overhang and servicing, huge fiscal deficits and high levels of unemployment – they are unprepared to move with the same broadmindedness on initiatives that the Caribbean regards as vital for a sustainable medium term strategy.”
He emphasized that the Community needs “special consideration of debt relief measures for small heavily indebted middle income countries, (and) for a more structured and inclusive inter-governmental collaboration on international tax matters.”
He contended that especially because of the fiscal difficulties being experienced in developing countries, accountability for delivery on aid commitments assumes greater importance.
“Developed countries must recognize,” he affirmed, “that the cutting of aid to developing countries is not an option as it will endanger their own prospects.”
Ramotar also asserted that “A prosperous Africa or Asia or the Caribbean is good for developed countries as well.”
Ramotar said for the Community “the status quo is neither sustainable nor acceptable.”
He then recommended that the “comprehensive and coherent work to address the central issues of the crisis must be pursued to ensure adequate surveillance of the international financial system, of speculation in financial markets; agreement on mechanisms to encourage countries of systemic importance to respond to policy advice, protecting developing countries, particularly small and vulnerable economies, from the on-going effects of the crisis, and establishing an international framework to facilitate on-going collaboration for early warning and prevention.”
“We must be ready to take the bold steps necessary to ensure that the challenges we face do not result in development remaining the province of a few and an aspiration for many,” Ramotar insisted.
He recalled that three years ago, leaders met in New York for the Conference on the World Financial and Economic Crisis and its Impact on Development. However, he said, today the outworking of that crisis is still a work in progress and the danger of significant reversals is ever present.
He noted too that the IMF had pointed out that after three years of effort at stimulating recovery, the world economy is still fragile and the medium-term prospects are bleak.
“Indeed, talk of recovery can at best be described as premature, (and) even if there are some signs of renewed growth, this growth can hardly be regarded as deeply entrenched and is still extremely uneven,” Ramotar remarked.
He also maintained that “several of the major contributors to global output continue to place a drag on global growth, and are themselves grappling with unsustainable fiscal balances, which hinder their ability to implement adequately the measures needed to stimulate a lasting recovery.”
Ramotar mentioned too that the challenges in the Eurozone, faltering growth in the US economy, and a slowdown in growth in major emerging economies are indicative of the fundamental problems that still exist at the global level.
He referred to the 2009 Conference which tried to fashion an inclusive global response but tangible results remain elusive.
However, according to the Guyanese leader, from the standpoint of developing countries, this entails addressing the fundamental impacts of the crisis on their development prospects, and on achievement of internationally agreed development goals, including the Millennium Development Goals (MDGs).
“Progress towards the MDGs was already slow prior to the crisis, and will inevitably be further slowed as a result of the crisis and a combination of other concurrent challenges, Ramotar observed.
