PRESIDENT Bharrat Jagdeo yesterday sounded a clarion call to the developed world to ‘live up to their moral obligation’  of helping to solve the global economic and financial crisis, especially as it relates to the devastating effects and lasting damage exacted on the smallest and most vulnerable economies of the world.

President Jagdeo, who diverted from his prepared speech during a short, ‘direct-to-the-point’ address yesterday to the 64th UN General Assembly in New York, decided to centre his well-received presentation on two crucial issues  –  the financial crisis and its impact on small  vulnerable world economies saddled with facing the brunt of a burden largely created in the first place by the developed world who are not “owning up”; and the ever crucial ‘global front-burner issue’ of climate change.

– to cater for needs of small vulnerable economies

President Bharrat Jagdeo with Maria Otero, OAS Under Secretary of State for Democracy and Global Affairs, and Jose Miguel Insulza, OAS General secretary.

Noting that the theme selected for this year’s General Assembly debate focuses attention on the need for more effectiveness in responses to global crises, President Jagdeo said this emphasis could not be more appropriate, or timely.

“Recent history is replete with examples of global crises that have been faced, and apparently overcome, only to be repeated with greater severity. This sequence, which has repeated itself time after time, leads to an inevitable conclusion that the lessons of earlier crises were not heeded and that the responses were not sustainable,” he said.

Nowhere, he said, is this more evident than in the global economy, which has catapulted from one calamity to another in recent years, each more severe and pervasive than the previous.

And each of them has successively disclosed new vulnerabilities in the global financial architecture, and in the development model that has been advocated by the major capitals to the developing world through the orthodoxies of the international financial institutions, Mr. Jagdeo declared.

IMPACT OF ECONOMIC CRISIS ON VULNERABLE SMALL STATES
The President said one common thread through every financial and economic crisis has been the devastating effects and lasting damage exacted on the smallest and most vulnerable economies of the world.

While acknowledging that the peculiar vulnerabilities of small states have long been identified, Mr. Jagdeo yesterday seized the opportunity to again highlight these vulnerabilities that include the minute size of their domestic markets, remoteness of location, susceptibility to natural disasters, few opportunities for diversification, constraints in institutional capacity, limited opportunities for economies of scale and scope, openness to and dependency on trade and investment, poor access to external capital, and persistent poverty.

The president said these factors have been well-known for some time, but demonstrable progress towards resolving them remains elusive.

In the case of the prevailing crisis, he pointed out that the small vulnerable economies of the Caribbean have had to bear the brunt of global recession. This has manifested itself through both depressed prices for primary commodities exported such as bauxite (as is the case in Guyana) and depressed demand for services such as tourism.

The result, according to him, has been loss in export and foreign currency earnings with attendant dislocation to exchange rates, reduced government revenues exacerbating an already tenuous fiscal and debt situation, loss of jobs and welfare, and reversal of gains previously made against poverty.

“Even as we seek long term solutions to bolster the resilience of our economies, the need for relief and support is immediate,” President Jagdeo told the General Assembly.

On this note, he highlighted the fact that the capacity of the small countries of the Caribbean to respond with countercyclical measures is virtually non-existent with no available fiscal space and levels of indebtedness that are among the highest in the world.

President Jagdeo further urged leaders at the General Assembly that the case is therefore compelling for the global community to relieve and restructure the debt of these heavily indebted vulnerable small countries, including those who were not previously considered for debt relief because of their income levels but whose debt ratios are clearly unsustainable by any standard.

H also told the Assembly the case is equally compelling for new additional flows of development assistance to be delivered to these countries by both multilateral and bilateral development partners.

Despite injections of large amounts of additional resources into some of the multilateral institutions, and approval of new facilities by these institutions, President Jagdeo said very little has actually materialised in terms of ‘additionality’ in disbursements to smaller states.

“This needs to be corrected urgently if we are to avoid the  perception that there is an absence of concern at the global level for the needs of smaller countries,” Mr. Jagdeo declared.

He proposes that the solution is to have “a new global financial architecture”, one that  must involve smaller  countries in its articulation.

This is necessary, he said,  “because our fear is that if we continue along the same path then we will have a new architecture that caters only for the concerns of  the big  countries – expanded now to the G-20, and the  smaller countries will not see their concerns reflected in that architecture.”

“…this is why last year I called for a new Bretton Woods-type conference, where all the countries in this room helped to create that architecture,” declared the Guyanese  head of state, a Russian-trained Economist and a former Chair of multilateral financial institutions such as the World Bank, the International  Monetary Fund (IMF) and the Inter-American Development Agency (IDB).

THE CASE FOR STRENGTHENED MULTILATERALISM
President Jagdeo also told the high-level gathering that “the global crises which now beset us require global solutions”.

This, he said, is the most important lesson to be learnt from the era of globalisation and interdependence. The bipolarity of the Cold War Era has yielded increased multilateralism, in which there has been a diffusion of political and economic power.

“In many ways, some forms of global governance are no longer commensurate with the needs of the international community and must therefore be suitably altered,” President Jagdeo stated.

The United Nations is now engaged in an endeavour to remedy the deficiencies of the present system by strengthening the foundations of multilateralism upon which the Organisation’s Charter is based. For almost two decades now, various organs, committees and working groups have laboured to develop proposals for reform.

In this regard, President Jagdeo admitted that, for a body as large and as complex as ours, the task of finding “general consensus” is not easy. “However, I believe the time has come to assess our progress or lack thereof and, on the basis of our findings, try to accelerate the completion of our task,” he exhorted.

While acknowledging that the process has generated some tangential improvements in the operation of the international system, “the main objectives which we as small states set for ourselves at the start, remain largely unfulfilled”, he told the Assembly.

President Jagdeo said the revitalisation of the General Assembly, the most representative of the organs, must go beyond a few token changes to become truly the voice and conscience of mankind.

For one, he said, the Security Council must be expanded and enhanced to make it more democratic, accountable and transparent in the performance of its mandate to preserve global peace and security.

Access to and participation in the Council’s deliberations must be guaranteed for small states.

Similarly, President Jagdeo said the Economic and Social Council must be endowed with the political weight necessary to implement the Organisation’s Agenda for Development.

“The Bretton Woods Institutions and the World Trade Organization should be brought more under the United Nations umbrella to provide for the participation of small states in the decision making process and for greater cooperation in the discharge of their respective mandates,” he urged the Assembly.

“Very importantly, the principle and practice of special and differential treatment for small and disadvantaged states should be incorporated in the policies and programmes of these organisations,” he added.

President Jagdeo said above all, a profound attitudinal change will be required of all member states to strengthen multilateralism as the preferred mechanism for managing future international relations.

“Selfish interests and old divisions must be replaced by a new ethic of collaboration and a new sense of morality. Declarations of intent are no substitute for critical decision making. The very word ‘crisis’ which comes from the Greek connotes the need for decision.”

“On a final note, therefore, I would urge this 64th General Assembly to avoid further delay and ensure that its deliberations contribute concretely to advancing the progress of the United Nations Organisation and the peoples it serves,” the Guyanese Head of State concluded.

“We all have an important role to play in solving this crisis but the developed countries have a moral obligation to play a greater part in solving both the  financial  crisis and the climate change crisis because it is by their action that we are in this situation,” Mr. Jagdeo bluntly declared.

“I hope that they recognise this obligation, and the urgency to act on this obligation,” he charged.