NOBEL-WINNING ECONOMIST SAYS UN BEST SUITED TO OVERSEE GLOBAL ECONOMIC OVERHAUL

The United Nations is the only institution with the legitimacy to oversee democratic reforms of the global economic system to pull the world out of the current recession, Nobel prize-winning economist Joseph Stiglitz said today.

The UN has a crucial role to play in addressing the roots of the downturn and in reshaping the global economy into a more fair and sustainable system, he said at the UN Economic and Social Commission for Asia and the Pacific (ESCAP) in Bangkok, Thailand.

"As this is a global crisis, a small group of industrialized countries are ill-equipped to deal with it," he said.

"There are 192 countries in the world, [and] 20 is a small percentage," he added, referring to the so-called Group of 20 (G20) industrialized countries. "Obviously what is necessary to respond to the crisis is not a G20 but a G192."

The economic system prior to the current crisis – characterized by excessive financial deregulation coupled with massive consumption financed by debt – is unsound and must be reinvented, Mr. Stiglitz said.

"As we think about this crisis – and we think about the world that will come after it – we should think about how we can create a global economic architecture which works better, for more people, in a more sustainable way."

Protectionist practices, although they may benefit nations in the short-run, can slow global recovery, and any successful response to the crisis requires paying closer attention to the needs of developing countries, said Mr. Stiglitz, who chairs the UN Commission of Experts on Reforms of the International Monetary and Financial System.

Earlier this year, that group called for the drastic overhaul of international finance structures, urging wealthier nations to direct one per cent of their economic stimulus packages to help developing countries address poverty. It also underlined the importance of setting up an elected and representative Global Economic Coordination Council, as part of the UN, to meet annually at the head-of-State level to assess development.

"We've now created a global economy but we haven't created the institutions to make that economy work," Mr. Stiglitz, winner of the 2001 Nobel Prize in Economic Sciences and professor at Columbia University in New York, said today.

Also addressing today's event on the "UN System and the economic crisis: towards a new global financial and economic architecture" was ESCAP Executive Secretary Noeleen Heyzer, who also appealed for developing nations to have a greater say in reshaping globalization.
In Asia and the Pacific, an agenda for inclusive and sustainable development that is "about bringing economic, social and ecological balance in an integrated whole to address various development deficits and inequalities facing our region is essential, she said.

TOP UN ASIA-PACIFIC OFFICIAL PUSHES FOR POOLING OF FISCAL RESOURCES TO BEAT RECESSION

Large-scale government stimulus packages are closed off to many nations across Asia and the Pacific, the top United Nations official for the region told a gathering of senior finance and central bank representatives, promoting a cooperative approach to jump-starting economies out of the global recession.

"We need to recognize that not all countries have the fiscal space to implement counter-cyclical measures at significant scales due to budget constraints," Noeleen Heyzer, Executive Secretary of the UN Economic and Social Commission for Asia and the Pacific (ESCAP), said yesterday.

Shrinking resources and other fiscal issues have left several countries in the region with little room to manoeuvre in their efforts to reignite suffering economies, Ms. Heyzer said in a message to the regional high-level workshop on the role of monetary, fiscal and external debt policies in responding to the financial crisis.

In her address, Ms. Heyzer pointed to the international community's response to the crisis and noted that the Asia-Pacific region, with over $4 trillion in foreign exchange reserves, can work together to spur recovery and restore economic growth.

Ms. Heyzer added that ESCAP can bring countries together to share experiences and coordinate their development activities for greater regional results, as exemplified by the high-level meeting in December 2008 in Bali, Indonesia, on the food and fuel hike, financial market meltdown and climate change crisis.

"The huge scale of government spending in the pipeline in many countries offers an unprecedented opportunity to design policies that will bring about more inclusive and sustainable development," she told participants at the four-day workshop in Dhaka, Bangladesh.

The ESCAP workshop looking into various economic policies used by governments in the region to deal with the global financial crisis, hosted by the Bangladesh Bank, has brought together top officials from the finance ministries and central banks of Bangladesh, Bhutan, Cambodia, China, Fiji, India, Laos, Malaysia, Maldives, Nepal, Pakistan, the Philippines, the Republic of Korea, Russia, Sri Lanka, Thailand and Viet Nam.

Also attending are experts from international organizations, including those from the Asian Development Bank (ADB), the International Monetary Fund (IMF), the UN Development Programme (UNDP), World Bank and civil society organizations.
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AGRICULTURE WEATHERING ECONOMIC CRISIS BETTER THAN OTHER SECTORS: UN-BACKED REPORT

Since food is a basic necessity, the agriculture sector has taken less of a hit than other industries as a result of the current economic crisis, according to a new report by the United Nations Food and Agriculture Organization.

So long as the global economy begins its recovery within the next two to three years, the "Agriculture Outlook 2009-2018" – jointly released by the Organisation for Economic Co-operation and Development (OECD) – says that drops in agricultural prices and in the production and consumption of farm goods will likely be moderate.

The recession will dampen food prices, in turn easing pressure on cash-strapped consumers, it added.

While prices have fallen from their record highs in 2008, they are still high in many countries, and the new report projected that the prices of all farm commodities, except for beef and pork, will probably not fall back to their pre-2007-2008 averages.

Crops are estimated to cost 10-20 per cent more in the next decade, when adjusted for inflation, compared with the average for the 1996-2006 period, while vegetable oil prices are expected to surge 30 per cent.

The FAO-OECD study also said that the main forces underpinning agricultural commodity prices and markets over the medium-term are an expected economic recovery, renewed food demand growth on the part of developing countries and the emerging biofuel markets.

But it cautioned that extreme price volatility, as experienced last year, could occur again, given that commodity prices are increasingly tied to oil and energy costs, with environmental experts cautioning of erratic weather conditions.

The report points to access – and not availability – as a longer-term problem, stressing that poverty reduction and economic growth will be a large part of the solution.

It also called on governments to boost domestic agricultural development through infrastructure investment and incentivizing sustainable soil and water use, among other targeted policies.
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ASIA-PACIFIC REGION FACES ‘TRIPLE THREAT’ TO ECONOMIC DEVELOPMENT, WARNS UN REPORT

ASIA-PACIFIC REGION FACES 'TRIPLE THREAT' TO ECONOMIC DEVELOPMENT, WARNS UN REPORT
New York, Mar 26 2009 12:00PM

The triple threat of the global economic recession, volatile food and fuel prices, and bearing the brunt of the world's natural disasters has hit countries in the Asia-Pacific region particularly hard, a new United Nations report warned today.

With almost two-thirds of the world's poor and half of its natural disasters, the region is at the epicentre of these crises, according to the report by the UN Economic and Social Commission for Asia and the Pacific (ESCAP).

The report, entitled "Addressing Triple Threats to Development," noted that record high oil prices in 2008 of $147 dollars a barrel, in combination with hording and price speculation drove the price of rice – the region's staple – up by 150 per cent, hitting the poor the hardest.

At the same time, another ESCAP report showed that almost a quarter of a million people died in 2008 as a result of natural disasters in the region, representing 97 per cent of fatalities worldwide.

"The converging triple threat highlights the need for a more comprehensive, inclusive approach to development," stressed ESCAP Executive Secretary Noeleen Heyzer.

"Not only is there an urgent requirement to resume economic growth, but we have to re-think where that growth takes place and whom it benefits," added Ms. Heyzer.

Prudent macroeconomic policies, implemented in reaction to the previous economic crisis which swept the region in 1997, bolstered the Asia-Pacific at the beginning of the current slump. However, that resilience started to erode, when in the fourth quarter of 2008, trade – the region's engine of growth – moved from double digit growth to double digit declines.

Among the reasons for this reversal in trade is that the region's economy is more integrated with the rest of the world than with itself.

Ms. Heyzer noted that "intra-regional trade among developing countries accounts for only 37 per cent of exports in our region, compared with NAFTA [North American Free Trade Agreement] at 51 per cent and the EU [European Union] at 68 per cent.

"By strengthening our domestic markets, the region can provide a buffer to global market fluctuations and move from being crisis resilient to crisis resistant. A key component in this will be how governments use fiscal policy as a tool of development."

The Survey calls for more intra-regional trade and investment by accelerating the implementation of regional economic cooperation agreements, as well as improved basic social protection. Currently only an estimated 30 per cent of the elderly receive pensions and 20 per cent of the population have access to health-care assistance.
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