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Permanent Mission of the Republic of the Philippines to the United Nations
At the outset, allow me to state that the Philippines aligns itself with the statements delivered by Antigua and Barbuda and by Indonesia on behalf of the Group of 77 and China and ASEAN, respectively.
The current financial crisis which is overshadowing all other issues on the global agenda was predicted by New York University Prof. Nouriel Roubini who spoke before this very group last year; and because of his forecast generally coming true, ‘Dr. Doom’ as he is sometimes called for his bearish outlook, is now quite a familiar face and voice when discussions on this crisis occur.
Given his largely accurate prognosis, Prof. Roubini’s present prescriptions seem to be what some governments are seriously considering in order to avert a global economic depression – among which are guaranteeing bank deposits more extensively and seeking larger interest cuts. The Philippines believes it would be interesting to have him speak before us again soon as we consider these issues under the Second Committee.
The Philippines would also like to thank you, Madam Chair, for arranging the very timely and relevant panel discussion last Friday on the ‘Challenges and emerging issues in external debt restructuring in the context of the current financial crisis’ - a topic which has direct implications on our discussions today.
The panel discussion provided the Second Committee with a glimpse of what we may expect in terms of future negotiations and directions in debt restructuring. Several interesting points of concern arose in the presentations and the ensuing discussion. For the benefit of those who may not have been there, permit me to quickly summarize what the Philippines saw as relevant.
Ms. Geske Dijkstra’s of Erasmus University presented the flaws of the current debt sustainability framework and suggested that persistent problems remain to the detriment of countries in debt. Mr. Steven Kargman proposed a possible more rational way of dealing with sovereign debt – by creating a ‘sovereign debt tribunal.’ Ms. Stephany Griffith Jones, who has spoken to us on previous occasions on other economic issues, provided an overview of the current financial crisis and noted that a new financial architecture needs to be created to avoid repeating these mistakes. She stated that future measures must (1) take into account how to incorporate counter-cyclical measures in government policy; and 2. be more comprehensive and must provide better regulation over banks and financial actors which handle instruments such as derivatives. Finally, Mr. Sony Kapoor gave an impassioned prescription for the way forward that included better risk and burden sharing, including through broader use of debt-for-equity measures similar to what the Philippines has been advocating for in its Debt-for-equity in MDG projects initiative, and through better regulatory processes.
All four speakers’ presentations point to the fact that the current debt sustainability framework is not achieving its objective of alleviating the overall debt burden of many developing countries, nor does it seem to be adequate in addressing future debt sustainability needs. There also seemed to be a common call for the Doha review conference next month on Financing for Development to consider the new reality brought about by this financial crisis, and to gather political support for a more comprehensive approach not only to debt issues, but also as to how the entire international financial architecture needs to be adjusted.
In the ensuing discussion, Brazil and the Philippines supported the notion that the Doha FfD conference discussions must recognize the new financial environment that is taking shape before our very eyes, and that we must not fall back into the mode of ‘business as usual’. The Philippines also noted that with the conference being less than two months away, it would be difficult to gather consensus for significant change when major actors are concentrating on trying to survive this financial crisis, and for the fact that in most cases government bureaucracy takes some time to adjust to fast-changing events.
Given this urgent need, and echoing the call from G-77, the Philippines believes that the current discussions on the Draft Outcome Document of the Doha Review Conference need to reflect the urgency of saying something on the present crisis as it affects the Monterrey Consensus.
Indeed, the gravity of this financial crisis should force all our governments to consider seeking immediate solutions to the present problems and finding common agreement on how to prevent similar crises in the future at all possible levels – national, regional and global.
The panel discussion last Friday saw an opinion expressed that perhaps because of previous experience with the Asian financial crisis, some countries may not be as exposed to the financial fallout, however, in today’s globalized world, there is no escaping the other economic effects of a slowing international economy, especially on trade.
For this reason, regional forums such as ASEAN and APEC will need to discuss and consider coordinated responses as part of a wider comprehensive approach. President Gloria Macapagal Arroyo of the Philippines, herself an economist by training and who had served in the Philippine Department of Trade and Industry for several years, just today called for ASEAN plus the three North Asian countries of China, Japan and South Korea to meet at the sidelines of the upcoming Asia-Europe meeting to discuss these very same issues.
The Second Committee, and the United Nations as a whole, needs to contribute the combined wisdom from developing and developed countries with best practices and informed debate and discussion, in order to ensure that similar global crises would be avoided in the future. We trust that the 63 rd Session of the General Assembly will be a turning point for all issues falling under the development pillar of the United Nations.
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