2009 UN Conference on Climate Change II

Article about UN Conference on Climate Change, New York

September 2009 

Don’t Waste a Global Economic Crisis – By René Grotenhuis and Aldo Caliari

The global economy isn’t working for ordinary people in the wealthiest nations.  In the poorest countries the situation is getting much worse, and the international system put together after World War II is not responding.

All told, more than 50 million people are expected to lose their jobs. The FAO reported last week that 100 million more have fallen victim to hunger, totaling more than 1 billion people being under or malnourished. As an economist wrote, it would be a mistake to waste a crisis.  This is no time for tinkering; we need substantial, democratic reform of global institutions to make them responsive to the world’s needs. But the multilateral institutions keep silent. The Doha round of the WTO never fulfilled its promises to benefit developing countries. Last year’s Doha conference on financing for development chose to kick the issue forward for six months, which is now. The clock is still ticking for the poor who did not cause the crisis but suffer its worst impacts.

This week, government officials from across the globe are gathered at the United Nations in New York for a follow-up conference. Unfortunately, no leaders from developed countries are expected to attend, risking another postponement of the hopes of the worlds’ poor.  We are attending on behalf of a group of Catholic antipoverty agencies, together with other humanitarian groups trying to influence the outcome.

Here’s what’s at stake: The Millennium Development Goals, basic steps for global justice and dignity like improving access to clean water, reducing hunger, and getting every child in school, are clear, overarching goals agreed by all UN member nations, including the U.S.  They have led to grassroots and online campaigns that have allowed tens of millions of people to urge their governments, rich and poor, to commit to what’s necessary. Despite this outpouring of support for policies agreed by every country’s government, attaining them was a challenge before the current crisis.  Now the inadequate development aid already promised is in doubt. Worse than that, record levels of poor-country borrowing and inability to raise hard currency in an environment where trade is contracting for the first time since the Great Depression threaten to produce a new debt crisis.

The Commission of Experts chaired by Nobel prizewinning economist Joseph Stiglitz has made an important and relevant proposal as a framework for better international economic policies: a new and powerful Global Economic Council within the United Nations. The council would have a limited number of countries representing all U.N. members, and responsibility to coordinate policies that work for the world. A Global Economic Council is a clear deliverable absolutely necessary to democratize the global economic system. Global reform needs to be inclusive and can’t happen without the voices of developing countries.

This is directly linked to the failings of the current system. The U.S. and Europe effectively control the World Bank and IMF, set up in 1944 to help stabilize the post-war economy. The U.N. was given a mandate at its founding in 1944 to address global economic issues, but its capacity to do so has been constantly undermined.

The effect is that self-selected, ad hoc groups like the G8 and G20 nations set policy in these areas.  These are not organizations – and don’t even have a Secretariat!—but ad hoc gatherings of a group of countries.  Many of their members would gladly admit that they are neither expected to be accountable to the broader international community, nor to make decisions of universal reach.

The net impact is inaction on the issues that are most important to the least developed countries: for instance, areas like country-by-country reporting of all financial transactions to end global tax evasion, or measures to end secret offshore banking by repealing bank secrecy rules.  These simple steps would go a long way to stop the drainage of resources that developing countries need now.  Strengthening the capacities of developing countries to mobilize their own resources is urgently needed in view of the current crisis which highlights the dependency and therefore the vulnerability of these countries on aid. Likewise, the looming debt crisis cannot be addressed without emergency solutions like a moratorium on debt service and a sovereign bankruptcy process.  To get there, we need more democracy at the international level.

The UN meeting this week must not become the next missed opportunity. Let us not forget that this meeting on the economic crisis is also on credibility and accountability towards one billion people.

René Grotenhuis is President of CIDSE, an international alliance of Catholic development agencies working together for global  justice. Aldo Caliari is Director of the Rethinking Bretton Woods project at Center of Concern, a U.S. member of CIDSE.