Copenhagen - 7 March 1995
Mr Chairman; Ladies and Gentlemen,
I am speaking on behalf of the Commission on Global Governance which under the chairmanship of Swedish Prime Minister Ingvar Carlsson has explored new directions in international cooperation.
The commission's report, released a few weeks ago, is called Our Global Neighbourhood - a title which echoes one of the themes running through our efforts this week - the realisation that we now live in a global and interdependent world.
The poor parts of this global neighbourhood are no longer confined to the South and the better parts aren't only in the North. Jobs have to be created throughout this global neighbourhood.
The benefits of economic growth have to be more evenly spread throughout the whole neighbourhood. There have been economic miracles in parts of Asia and Latin America - but in both regions the numbers in absolute poverty
have been increasing. One fifth of humanity lives in destitution - a growing, global underclass.
There is already broad consensus on the economic policies necessary to break the grip of poverty: financial stability, outward looking trade policies, high rates of savings and investment, releasing the private sector from bureaucratic controls. But it is also the other way around: social issues have immediate economic implications, in the present global competitive economy even more than in the past. The role of women in the work force, child labour, education levels, female literacy infant mortality, basic wage rates - all affect a nation's competitiveness and its ability to function in a global economy. Two policy conclusions can be drawn from this. First: social policies should not be viewed as distinct from economic and financial policies with the only aim to compensate negative consequences of the latter. On the contrary, the three - financial, economic and social - should be integrated from the very outset. Second: social as well as economic policies should not only be discussed at the national but also at the international level.
There is no substitute for a sustained domestic commitment to reduce poverty. But there is also need for action at the international level. The present lack of any effective mechanism of global economic governance is a structural deficit in the world economy.
While such a mechanism does not exist at present, the G7 would like to provide it - but its seven members represent just 12% of the world's people - without India and China it cannot even claim to represent the seven major economies.
The lack of any framework for developing and implementing social and economic policy at the international level has consequences for every region. For example - the worst of Mexico's problems might be over but we have not seen any moves towards reconciling the capital needs in emerging economies, their over-indebtedness and the practices of financial markets. We have provided aid but not found ways to bring sub-Saharan Africa into the world economy. We are stumbling in efforts to assist the transition to market economies across the former Soviet Union.
To fill this structural deficit, the Carlsson Commission proposes the establishment of an Economic Security Council This should include the existing major economies as well as representatives from the regional economic groupings. As we envisage it, this Economic Security Council would be representative enough to gain the necessary consensus for setting
effective, long term policy directions.
It would meet at the ministerial level (e.g. Ministers of Finance) twice or more a year with annual meetings at the heads of government level. With real political commitment it will be possible to develop a forum which provides leadership in economic, social and environmental issues leadership needed throughout the world.
We believe that such an Economic Security Council would be a suitable response to the demand of this Summit's Draft Programme of Action for the creation of 'a framework of sustained economic growth and sustainable development'. To this end we further propose an overall and integrated package of reforms of the UN system and its affiliates, including those
parts of the system which deal with social and economic policy-making.
In our report, we endorse some of the new thinking on aid, both in terms of quantities and in terms of impact. There is a need for more resources applied less selfishly. Only a few countries have ever met the target of 0.7% of their GDP for development assistance. Far too many countries give aid to promote exports or their own priorities, rather than those of the
recipients. A redirection of aid both in terms of quantity, quality and composition should be based in particular on social objectives.
We make a case for combining strong domestic policy reform with radical debt reduction - even for a package of measures somewhat similar to corporate bankruptcy. The alternative is to condemn whole countries and their people to indefinite misery. That would be the opposite of a social policy in our global neighbourhood.
The declaration drafted for this summit puts people at the centre of its concerns and their entitlement to a healthy and productive life in harmony with the environment. This is not a utopian dream - it recognises that the era of contending nation states is passing and that we have a chance to address the economic and social security of people and not just the
financial and political security of states. It requires leadership to link the two.
I thank you for your attention.