(TALKZIMBABWE) Statement to UN conference on world financial crisis

Statement to UN conference on world financial crisis
Mon, 29 Jun 2009 23:50:00 +0000

THE following is a statement made by Deputy President, Joice Mujuru at the UN Conference on the World Financial and Economic Crisis and Its Impact on Development. The statement was delivered on June 24, 2009.

Full Text

STATEMENT BY HONOURABLE JOICE T.R. MUJURU
VICE PRESIDENT OF THE REPUBLIC OF ZIMBABWE
AT THE CONFERENCE ON THE WORLD FINANCIAL AND ECONOMIC CRISIS AND ITS IMPACT ON DEVELOPMENT
NEW YORK
24 JUNE 2009

Your Excellency President of the General Assembly, Mr Miguel d’Escoto Brockmann
Your Excellencies, Heads of State and Government;
Your Excellency The Secretary-General of the United Nations, Mr Ban Ki-Moon;
Distinguished Delegates;
Ladies and Gentleman.

It is an honour for me to participate in this important conference on the world financial and economic crisis and its impact on development. I take this opportunity to express my Government’s appreciation of the efforts that the United Nations is making to bring members together to tackle the global challenges facing the world. We are aware that balancing global interests and steering individual member states’ interests is a challenging task. My delegation is confident that with you at the helm of this important conference, all the issues on the agenda will be dealt with in a balanced manner. I therefore assure you of the support of my delegation.

Mr. President,

The world economic and financial crisis is one of the most pressing global issues of our time. Its effects pose a big threat to mankind’s well being. Although the world financial and economic crisis did not originate in developing countries, we now face the worst consequences, as most of us do not have adequate resources to mitigate its multiple negative impacts. Furthermore, we are concerned that the crisis will last longer than originally expected, with devastating consequences on smaller countries like ours.

Mr. President,

The impact of the world economic and financial crisis will be more devastating in developing countries, particularly those on the African continent. At lower levels of development, we are more vulnerable to fluctuations in world markets. Coming on heels of the food and energy crises, the global financial crisis seriously threatens sustained economic growth and sustained development on the continent and could reverse progress so far attained towards the achievement of the Internationally Agreed Development Goals, including the Millennium Development Goals (MDGs).

Already, economic activities in African countries have slowed down with weakening labour markets and rising unemployment, contracting business investments and a slowdown in the tourism sector. Most countries are facing financial constraints ; shrinking trade, reduced foreign remittances, a fall in foreign direct investment and aid flows. We urge members of the international community to partner Africa to alleviate the impact of the crisis, especially on the poorest and most vulnerable among us.

Mr. President,

In the case of Zimbabwe, recurrent droughts, lack of financial resources, the HIV/AIDS pandemic and brain drain continue to slow down economic development in the country. The unavailability of financial resources has negatively affected a lot of companies in Zimbabwe. This has in turn led to decreased Government revenues collections, and limited capacity to achieve sustained development. This situation is now seriously undermining progress by our inclusive Government., constituted by the three main political parties on 13 February 2009, to turn around our economy.

Mr. President,

The lack of external support now threatens the success of our Short Term Economic Recovery Programme whose main thrust is to steer our economy on the recovery path. I therefore take this opportunity to urge the international community to support Zimbabwe, by providing the country with a financial stimulus package to enable us to mitigate and offset the economic and financial crisis. In this regard, Zimbabwe is also of the view that the proposed stimulus packages to developing countries should be tailor-made to support the development priorities of the recipient countries. As an honest broker, the UN system should be the first to take a stand against conditional aid.

Mr President,

Whilst we take note of the efforts of the Group of 20 (G20) to deal with the current global crisis, unlike the United Nations, it is not inclusive. We believe that issues affecting developing countries do not get the full attention they deserve at the G20. We therefore submit that the United Nations is the most appropriate body which can come up with global solutions to the crisis. We therefore call for the strengthening of the role of the United Nations, including its General Assembly and its economic arms, particularly ECOSOC. In particular, the UN should be equipped with the tools, expertise and resources to assist member states in their efforts to overcome the crisis and promote a sustainable and inclusive recovery.

Mr President,

In the recent past, driven by blind faith in the virtues of the market, the role of the state in the regulation of the economy was reduced. Reality has now dawned on many that the role of government is more pertinent, than ever in regulating financial systems, both at national and international levels. It is therefore important that developing countries be given the freedom to choose the best mix of policies to offset this crisis given their unique and individual social, political, economic and environmental conditions.

To complement the efforts of governments there is need to review and reform the international financial architecture to ensure that the problems that led to this crisis are not repeated. This requires addressing three major sources of instability, that is, policies, markets and the current international reserve system. We call for agreement on an effective on an effective multilateral discipline over financial, macro-economic and exchange rate policies and the establishment of an international reserve system which is sensitive to the financial needs of Member States whenever they face a crisis.

Mr President,

We also call for fundamental overhaul of the governance framework of the World Bank and IMF to reflect developments in the global economy. Africa and other developing regions must be given greater voice and representation at the Bank and Fund. We know that we need, and we need to be heard. The voting weights at both institutions must be revisited to remove the bias in favour of the developed countries. This conference offers a unique opportunity to take decisive steps towards the proposed reforms around the core principles of transparency, integrity, responsibility, sound banking practice and international governance.

Withreference to the IMF, we are concerned that its loans still contain the old policy conditions which are the direct opposite of the expansionary and stimulus policies being implemented in the developed countries. We therefore highlight the need to streamline the institution so that it focuses on its main responsibility of safeguarding international monetary and financial stability. We call for the restoration of policy autonomy to borrowing countries.

Mr President,

I believe that more attention should be given to addressing the disparities in the global trade regime and to create a rule based, predictable and non-discriminatory trading system. For developing countries to realise the full potential from international trade, it is important that the barriers to our exports are removed. We share the view that the reinvigoration of the multilateral trade negotiations to conclude the Doha Development Trade Round will go a long way to address the imbalances in the current international trading system. In the same vein, it is critical to increase aid for trade to enable exporters and importers to access affordable credit.

For many African countries, including Zimbabwe, stabilization of commodity prices and fair remuneration to producing countries has also become a priority issue. Fair prices for commodities will go a long way to boost financial resources for our countries. This would assist us in meeting our development challenges.

Mr President,

We believe that the World Bank and other Regional Development Banks (RDBs) can play a pivotal role in mitigating the effects of the crisis through infrastructure financing and micro-finance, among other things. They should therefore be equipped with the necessary resources to carry out this important mandate and we support the call by the World Bank for the creation of a Vulnerability Fund to help developing countries.

Further, in view of this financial crisis, debt sustainability should be closely monitored. The various initiatives that have been undertaken to reduce the debt burden of a number of developing countries including the Multilateral Debt Relief Initiative (MDRI), do not cover all countries. They need to be more inclusive. Members should also consider establishing and international mechanism for sovereign debt restructuring and relief.

Mr President,

In conclusion, my Government is of the view that due to the serious and far-reaching effects that the current financial and economic crisis poses, this Conference should not be a one off event. We call for a follow up process with a road map of further deliberations, and a time-framed programme of action to ensure that the effects of the crisis are mitigated and measures are put in place to avert recurrence. We therefore request the Secretary General to develop a proposal on the overall response of the UN system to the crisis and the General Assembly to remain seized with the matter.

I thank you.