Mission & Name
US Foreign Policy (Dr. El-Najjar's Articles)
The UN Responds to the Global Financial Crisis?
By Curtis F.J. Doebbler
ccun.org, July 3, 2009
Dr. Curtis F.J. Doebbler teaches in Al-Najah University, Palestine.
In the first week of the Northern hemisphere's summer, heads of
states and their special envoys from both the North and the South as well as
one of the largest collections of senior economic experts from across the
globe met at the UN to advise the world on how to deal with the Global
Although the meeting comes after many of the most
powerful countries have already charted their paths to economic recovery by
throwing their lot in with the existing laissez faire market status quo, the
UN Economic Summit seems to be taking a much different view.
its timing and that some important states decided to boycott, as they did
the recent global meeting on racism, or appear only at a junior level what
difference will this meeting make? There are some reasons why it might.
First, the meeting is much more inclusive than that of any group that has
tried to deal with the problem to date. It was initiated by the President of
the 192-member state United Nations Organization with the creation of an
expert panel of more than 40 economists from every region of the world. This
group was led by the Nobel Prize winning former Chief Economist of the World
Bank, Joesph Stieglitz.
Neither the G8 nor the G20 comes anywhere
near achieving the inclusiveness that characterized this meeting. At the
same time these forums admit that nearly everyone is affected by the global
financial crisis and that just about every state needs to contribute to
Unabashed by their collective arrogance of power, the G8
and G20 leaders merely reconcile these contradictory messages by assuming
that every state will follow their instructions. If you get burnt as badly
as many people and states have been by the financial collapse that was
caused by following the advice of the the G8 and G20 one could reasonably
wonder why they should follow even more potentially wrong advice from the
people who got them into the hole the first place.
logical propensity of people not to follow bad advice twice behind, there is
a second reasons why the UN Economic Summit—officially called the UN
Conference on the World Financial and Economic Crisis and its Impact on
Development—might be the most appropriate forum to discuss the world
The UN gathering is an all-inclusive meeting about
a problem that affects everyone in the world. It is thus more likely to
provide advice that will be viewed as more legitimate by everyone in the
world, than is a meeting of a mere single digit percentage of the states in
the international community like the G20.
It is only common sense
that people and governments are more likely to honor obligations that they
have been involved in creating, rather than prescriptions that are dictated
by a small group of elites. Under the system of international relations
established after World War II in the Charter of the United Nations every
state is equal.
All states are entitled to rely on this explicit
statement in the UN Charter—just like black slaves in the post-Civil War US
were entitled to rely upon the Proclamation of Emancipation to claim they
were free and equal. Contrary claims impose decisions in a neo-colonialist
manner on the people of the world, mainly in the South, who do not share in
the wealth or the decision making of their Northern neighbours.
arrogance of power was one of the central tenets not only of the UN, but
which international law dating back to the 17th Century was intended to
A comparison of the recent G20 communique with the draft
UN Outcome Document also shows the value of a more inclusive process.
The short two-page communique declares that the G20 aims to “stabilize the
financial sector and provide stimulus to restore economic growth and there
are signs of stabilization in our economies, including a recovery of stock
markets, a decline in interest rate spreads, improved business and consumer
It goes on to describe the need to take “actions to
reduce the impact of the crisis on employment,” to ensure “liquidity and
capital needs of banks,” and to ensure reliance on the IMF and World Bank as
the institutions that will lead us out of this crisis. The tone is
laudatory, not humble. Instead recognizing that those giving these
prescriptions are the ones who got us into this mess, it assumes that we,
the “People of the United Nations,” will be inclined to follow their
dictates blindly to get out of the crisis.
By comparison the draft
UN Outcome Document admits the gravity of the financial crisis calling it
the “worst financial and economic crisis since the Great Depression” in the
first paragraph. The fifteen page document containing 59 paragraphs, also
goes on to state in seven parts the the problem and to suggest “The Way
The UN Outcome document also encourages cooperation,
reiterating in several paragraphs the need for states and their
international organizations to cooperate with each other to solve “economic,
social, cultural and humanitarian” problems. It is premised on the belief
that the UN is the body to coordinate the cooperation.
G20 Communique states that “working with others” is useful, it also
emphasizes that such cooperation will be only on proposal put forward by the
elite group of twenty countries or the institutions they control, including
the World Bank and the IMF. In other words there is not indication of an
intention to cooperate with the other 184 states member states of the United
Nations in the manner this overwhelming majority of states might deem most
Appearing to confirm this suspicion, both the World
Bank President Robert Zoellick and IMF Managing Director Dominique
Strauss-Kahn has turned down the President of the General Assembly Miguel
D'Escoto Brockmann's invitation to them to come and discuss their
policies with most of the rest of the world.
While the basic
economic aims of the G20 Communique might be appropriate for strengthening
an economic and financial system that has already failed, they do nothing to
earn the trust of the billions of people who were not served by it in the
first place. These include the estimated half the world's population
living on less than 2 Euros per day.
The UN Outcome Document in
contrast focuses on the humanitarian needs of ordinary people. The Outcome
Document also repeatedly stressed the disproportionate impact the crisis is
having on the most vulnerable people in the world.
This later focus
is consistent with the mandate given by states to the UN at the Follow-up
International Conference on Financing for Development held in Doha, Qatar in
The Economic Summit's draft Outcome Document
recognizes that the while the financial crisis was started by the riches
countries, its greatest impacts are on the poorest countries. This
realization appear to go more to the heart of the impact of the financial
crisis, then the ambiguous G20 Communique by which the richer
countries fails to accept responsibility or to recognize who will be hurt
In addition, the Economic Summit's draft Outcome Document
largely ratifying some of the lines of action currently being taken by the
G20, emphasizes the need to ensure the stimulus works for all and the need
to reform the “international financial and economic system and
architecture.” Concrete proposals, however, are lacking with the exception
of a call for the enhanced representation of developing countries in the
Bretton Woods Institutions—the World Bank and IMF—and a call for the heads
of these institutions to be appointed through more “open, transparent, and
merit-based selection processes” with “due regard to gender equality,
geographical and regional representation.”
Considering that the
heads of neither the World Bank or the IMF has ever been a women or anyone
from outside the United States or Europe, such changes would be a marked
shift towards establishing the legitimacy of these institutions. So too
would be the call for more “cooperation, coordination and coherence” between
the international financial institutions and the United Nations.
Many of the aspirational goals will be tasks that successive Presidents of
the General Assembly will have to propel forward. This also means that
states, especially the G77 that includes well over half the states in the
United Nations, will also have to find the courage to support such changes
in the global inequities upon which the current global financial system is
The UN Economic Summit is a crucial step in the direct or
righting some historical wrongs, but it has yet to be seen whether it is
merely and isolated step, or part of the process that will continue. This is
something that will depend more on the will of states. The process by which
the draft Outcome Document was arrived at raises questions.
draft Outcome Document was finalized by several co-facilitators at 4 a.m. on
22 June 2009 and adopted just after 3 p.m. the next day by states before
being put to senior state officials, including heads of states and
government, during the three day conference at UN headquarters.
was based on a report of the group of eminent experts led by Nobel Prize
winning Economist Stieglitz, a revised draft by the General Assembly
President based on reports form the IL and other UN family agencies, and
state negotiations. During the negotiations the United States and European
Union objected to virtually any discussion of the international financial
institutions. As a result the issue of the reform of these institutions has
been left somewhat vague in the text. So too have have many of the calls for
concrete action that were included in a draft promulgated by the activist
President of the General Assembly.
In some respects the process and
the final Outcome Document reflect the similarly named results of the recent
Durban Review Conference against Racism held in Geneva, Switzerland this
In both cases, the failure of states to agree on a
common approach to the problems led to muted texts that added little in
terms of calls for concrete action. In both cases the richer western
countries refused to fully participate in the UN's work citing the fact that
they could not get their way and despite the fact that draft Outcome
Documents going into the conferences reflected significant compromises to
the absentees' concerns.
Both the Durban Review Conference and the
UN's Economic Summit Outcome documents reflect the haunting theme of
inequality and discrimination. While the later dealt with the more direct
manifestations of discrimination, the former has tried to address the
indirect and structural forms of discrimination perpetrated against the
majority of the people in the world, especially those living in the global
South. As one might expect, this has not always been appreciated by the
wealthier elites that reside in or are intimately connected to the global
Nevertheless, at the very least the UN Economic Summit
illustrates the hypocrisy of the current international system. Even more
pointedly the views of many rich Northern states illustrate the inherent
bias of a structure that is based in the North and heavily under the
influence of the Northern states.
Ironically as the Northern states
encourage people power in Iran, they appear to be gagging the rest of the
world that seeks to question a financial system controlled by Northern
interests that has impoverished large numbers of people in the South. This
UN Economic Summit comes at a time when inequalities in the world are
becoming more pronounced and more apparent to people everywhere. The looming
question mark however, is whether or not the wealthier states that must act
to end the insidious discrimination between the North and the South are
willing to do so.
As the Economic Summits Outcome Document points
out the richest states numerous times to enhance their Overseas Development
Assistance to developing countries, they undertook to achieve the minimums
required by Millennium Development Goals, and they undertook to form United
Nations organisation that would treat all peoples and states equally. As the
better forty or so states have been slow to make progress on any of these
promises, what makes another set of promises worth listening to? This is a
crucial question the Economic Summit and it aftermath will have to answer.