The UNGA's Second Committee held its annual debate on macroeconomic policy and financing for development.
Governments discussed international development cooperation, trade, debt and debt sustainability, and systemic issues, and highlighted the need for investments in infrastructure, international tax cooperation and financial inclusion.
21 October 2016: During the UN General Assembly (UNGA) Second Committee’s annual debate on macroeconomic policy and financing for development (FFD), governments discussed international development cooperation, trade, debt and debt sustainability, and systemic issues, among other topics. Countries highlighted the need for investments in infrastructure, international tax cooperation and financial inclusion. Many also welcomed the role of South-South cooperation, and some cited the need for partnerships.
The UNGA’s Second Committee addresses economic and financial issues. Macroeconomic policy questions is item 17 on its agenda, and follow-up to the implementation of the outcomes of the International Conferences on Financing for Development is agenda item 18. The debate took place from 20-21 October 2016, in New York, US.
On international development cooperation, Thailand, for the Group of 77 and China (G-77/ China), emphasized that the North-South Cooperation remains the main channel for FFD. The Dominican Republic, for the Community of Latin American and Caribbean States (CELAC), supported by the G-77/ China, Bangladesh for the Least Developed Countries (LDCs), India, China and South Africa, called for developed countries to fulfill the commitment to allocate 0.7% of Gross Domestic Product (GDP) as official development assistance (ODA), and 0.15% to 0.20% of Gross National Product for LDCs. She noted the need for technology transfer on favorable terms, including on concessional and preferential terms.
Qatar said ODA plays an important role in tackling crises, including the refugee crisis. India stressed that climate finance or funding for humanitarian actions must be new and additional to ODA. Papua New Guinea called for new and additional financial support to address climate change.
Noting that her country continues to allocate a full 1% of gross national income (GNI) to development assistance, Norway said ODA continues to be important “but can only get us so far” and thus governments must work to unleash new forms and sources of finance, in volumes that far exceed ODA. To that end, she underscored the role of domestic resource mobilization and of women’s economic empowerment and participation.
CELAC called for middle income countries’ (MICs) diverse and specific development needs to be appropriately addressed, recalling that the Addis Ababa Action Agenda (AAAA) acknowledges that ODA and other concessional finance is still important for a number of MICs. Supported by Brazil, she stressed the need to respect each country’s policy space and leadership to implement policies for poverty eradication and sustainable development. Brazil further called for respect for the principle of common but differentiated responsibilites (CBDR). Nigeria highlighted that aid flows should be “free from unrealistic conditionalities.”
Indonesia stressed the necessity to align both public and private finance with sustainable development. Laos called for ensuring that development is on a path for green growth. Panama noted that it is exploring the possibility of issuing social impact bonds to finance the 2030 Agenda.
On trade, G-77/China, supported by Maldives for the Alliance of Small Island States (AOSIS), Brazil, India, South Africa, Papua New Guinea, Nigeria and Qatar, called for a “fair and balanced, open, inclusive, non-discriminatory, transparent, equitable, rule-based and predictable multilateral trading system.” Specifically, she: urged a timely conclusion of the Doha Round of World Trade Organization (WTO) negotiations; called for the facilitation of accession to WTO, especially for developing countries; and welcomed the commitments of the Tenth WTO Ministerial Conference to maintaining development at the center of future negotiations and its reaffirmation of the principles of special and differential treatment, and the flexibilities for developing countries.
Brazil stressed the need to eliminate agricultural export subsidies and, supported by China and South Africa, to fight trade protectionism “in all its forms.” Papua New Guinea called to strengthen subsidies in the fisheries sector, especially those that address overcapacity and overfishing.
The LDCs called for: the full implementation of duty-free, quota-free market access for LDCs; simplified and transparent rules of origin; and financial and technical support for trade capacity-building addressing non-tariff barriers. He stressed the need for mechanisms to mitigate the effects of sectoral tariff initiatives, explaining that the reduction in overall tariff lines under WTO led to LDCs losing their comparative advantage. He called for the full implementation of Article 66.2 of the WTO TRIPS Agreement, which requires developed countries to provide incentives to enterprises and institutions in their territories for promoting and encouraging technology transfer to LDCs. Ethiopia noted the imperative to increase ‘Aid for Trade’ to enhance the trading capacity of LDCs.
On debt, CELAC stressed the need to examine options for an “effective, equitable, durable, independent and development-oriented” debt restructuring and international debt resolution. The LDCs called for immediate full debt cancellation for the LDCs, noting that debt relief must be additional to ODA. Norway underscored the importance of responsible borrowing and lending.
On the international financial system, G-77/ China, supported by CELAC, AOSIS, Brazil, India, China, Nigeria, Venezuela and Panama, underlined the need to continue to broaden and strengthen the voice and participation of developing countries in international economic decision-making and norm-setting and global economic governance. She called for the full implementation of the 2010 International Monetary Fund (IMF) Quota and Governance Reforms, and early completion of the 15th General Review of Quotas, including a new quota formula that further shifts quota shares to dynamic Emerging Market and Developing Countries, while protecting the quota share of the poorest countries. The Group also expressed support for the shareholding review of the World Bank Group, in order to achieve equitable voting power between developing and transition countries and developed countries, while protecting the smallest poor countries.
G-77/China called for strengthening the FFD Forum to ensure “substantive deliberation” on implementing the AAAA and other initiatives derived from it, including the Technology Facilitation Mechanism (TFM) and the Global Infrastructure Forum.
On the UN Economic and Social Council (ECOSOC) Forum on Financing for Development Follow-up (FFD Forum), G-77/ China underlined that the intergovernmentally agreed conclusions and recommendations of the 2016 Forum had failed to address obstacles and challenges to the implementation of the FFD outcomes. Nor had the outcomes provided policy recommendations for action with regard to support from developed countries to developing countries, she said. The Group called for strengthening the Forum to ensure “substantive deliberation” on implementing the AAAA and other initiatives derived from it, including the Technology Facilitation Mechanism (TFM) and the Global Infrastructure Forum.
CELAC stressed the need for Member States to participate in the Forum at the highest possible level, and for an equitable and geographical representation in the selection of special invitees, moderators and panelists. AOSIS underscored that the work of the FFD Forum, and of the Second Committee, are “essential” for the meaningful implementation of the 2030 Agenda and the AAAA.
The LDCs called on Member States to undertake a decision at UNGA 72 to establish an international investment support center for the LDCs under UN auspices, to provide a one-stop arrangement to stimulate foreign direct investment in LDCs. [Second Committee Website] [Second Committee Documents] [Second Committee Statements][IISD RS Sources] [Meeting Summary, 20 October] [Meeting Summary, 21 October]