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Martin Khor

G77 Summit Declaration addresses “global challenges”

by Martin Khor

22 June 2014

The G77 Summit Declaration, adopted by the Extraordinary Summit to mark the 50th anniversary of the Group of 77, in Santa Cruz on 15 June, has a major Part IV on “Global Challenges” which deals with the main issues are the subject of international discussion.

The Declaration sets out the G77 and China political leaders’ current positions on these issues, many of which are presently under multilateral negotiations in the UN in New York, in the WTO, in the UNCTAD, IMF, WIPO and other fora.

The “Global Challenges” dealt with include the global partnership for development, ODA, debt, trade, technology transfer, migration, a strong critique of the international financial system and calling for reforms, the credit rating system, the need to democratise the global economic governance, and the role of the UN.

The Declaration also deals with environmental issues including climate change, biodiversity, forests, desertification and land degradation and oceans.

Significantly, the Declaration also has a section on an emerging issue of internet governance and the invasion of privacy. The leaders condemned the misuse of communications technology (by some countries) to conduct surveillance on developing countries’ leaders and citizens, and calling for an end to such activities and ensuring that cyberspace is used for peaceful ends.

The Declaration is an important reference for the views of the developing countries, at the highest political level, on the current international issues.

(Reports on other Parts of the Declaration have been published in previous issues of SouthNews).

In a section on “Global partnership for development”, the Declaration stressed the need for a new and stronger commitment by developed countries to international cooperation to support the fulfilment of the development aspirations of developing countries.

As part of the Millennium Development Goals, a commitment was made to a global partnership for development. “However, we note with concern the significant shortfall in the partnership under the Goals, which contributed to the lack of achievement of many goals and targets. We therefore call for the urgent implementation of all commitments under the global partnership for development so as to overcome the gaps identified”, said the leaders.

“We also call upon leaders of the developed countries to agree and commit to a new phase of international cooperation through a strengthened and scaled-up global partnership for development, which should be the centrepiece and anchor for both the sustainable development goals and the post-2015 development agenda.

“Such an enhanced global partnership should include the issues of providing financial resources to developing countries, official development assistance, debt relief and debt restructuring, trade, technology transfer and greater participation of developing countries in global economic governance.”

On Official development assistance, the leaders reaffirmed that ODA remains the main source of international financing for many developing countries and that it is essential as a catalyst for development, including for fulfilling the MDGs, SDGs and the post-2015 development agenda.

“We stress that developed countries must meet and scale up their existing official development assistance commitments and targets made,” said the Declaration. “An enhanced predictable and sustainable flow of ODA is essential to meet the regular development challenges as well as the new and emerging challenges in developing countries.” It recalled the unfulfilled commitment made by developed countries at Gleneagles.

It urged the developed countries to fulfil their commitment to provide 0.7 per cent of GNI for ODA and the target of 0.15 to 0.20 per cent of GNI to the LDCs, and to increase the target to 1 per cent of GNI by 2030. It expressed deep concern that ODA commitments remain unfulfilled.

The leaders stressed that the global financial and economic crisis cannot be an excuse to avoid fulfilling existing aid commitments by developed countries and to make further commitments. They therefore called upon developed countries collectively to fulfil their ODA commitments and to raise overall levels further, keeping in mind that the developing countries will require new, additional and sustainable financial resources to a significant extent and amount in order to implement a wide range of development activities.

They stressed the need for ensuring new and additional financial support to developing countries as a key means of implementation for achieving the MDGs and the forthcoming SDGs. ODA should be used in accordance with national developmental priorities without conditionalities. The leaders expressed “deep concern about the attempt made by donor countries, outside UN forums, to redefine ODA by including other sources of financing that are not linked or related to the development of developing countries, with the objective of disguising the drop in ODA flows not based on their agreed commitments.”

On External debt, the leaders were concerned that, with the global economic crisis, some countries are becoming more vulnerable to new external debt problems or even crises. Addressing the external debt problems of developing countries is thus an important part of international cooperation and the enhanced global partnership for development.

“We recognize the importance of debt relief, including debt cancellation, debt restructuring, debt moratorium and debt audit procedures. Debt restructuring processes should have as their core element a determination of real payment capacity so that they may not adversely affect economic growth and the fulfilment of the unfinished business of the MDGs, the SDGs and the post-2015 development agenda.

“In this regard, we reiterate the urgent need for the international community to examine options for an effective, equitable, durable, independent and development-oriented international debt resolution mechanism, and call upon all countries to promote and contribute to the discussions within the United Nations and other appropriate forums with that objective.”

The Declaration pointed to a new concern on vulture funds. Recent examples of the actions of vulture funds in international courts have revealed their highly speculative nature. “Such funds pose a risk to all future debt-restructuring processes, both for developing and developed countries.” it added. “We therefore stress the importance of not allowing vulture funds to paralyse the debt-restructuring efforts of developing countries, and that these funds should not supersede a State’s right to protect its people under international law.

“We stress the need to ensure that the economic and monetary policies implemented by developed countries do not affect global aggregate demand and liquidity, owing to the objective of finding surplus in their balance of payments, with negative results in the reduction of global revenues in developing countries.”

On Reforming the global financial architecture, the leaders affirmed the need for reform of the international financial architecture so that we have a financial and monetary system that reflects the realities of the twenty-first century, including a properly regulated international financial sector that reduces and discourages speculative investment, in order for capital markets to be mobilized to achieve sustainable development and play a constructive role in the global development agenda.

They added: “We also note the continuation of fundamental problems in the global financial and monetary system, including lack of regulation to ensure financial stability, the problems of the reserve currencies, the volatility in currency exchange rates, the speculative and large cross-border flows of capital and the insufficiency or unavailability of liquidity for developing countries in need of financial resources that face foreign exchange shortfalls or require resources to generate sustainable growth and development. We call for a programme of reforms, with full voice, representation and participation of developing countries, to address these problems.

“We note with concern that financial deregulation and financial liberalization have given rise to the massive expansion of speculative financial flows and derivatives trading. The financial and economic crisis of 2008 has illustrated that international finance has created an economy of its own, which has become increasingly disconnected from the real economy of production, direct investment, job creation and wage growth. The adverse effects of financialization include volatile capital flows, excessive commodity and food price fluctuations, rapid shifts in exchange rates and boom-bust cycles of financial crisis and economic recession.

“We urge that the reform process of the governance structure of the Bretton Woods institutions be finalized as soon as possible and be much more ambitious, and that an accelerated plan be established for further reforms in representation, participation and parity of voting power for developing countries in the decision-making process within the Bretton Woods institutions and in all discussions on international monetary reform and in the operation of the new arrangements for special drawing rights in the IMF, on the basis of criteria that truly reflect its mandate in the field of development and with the participation of all stakeholders in an equitable, transparent, consultative and inclusive process. In this regard, we call on the General Assembly to launch a process to reform the international financial and monetary system.

“We support exploration of the establishment of a United Nations intergovernmental mechanism under the General Assembly, as an entity responsible for monitoring the performance of the global economic and financial system in a comprehensive and sustainable manner. It is important that this mechanism monitor the impact of certain international financial flows and policies that are systemically important to prevent the spread of economic and financial crisis among countries.”

On reforming the credit rating system, the Declaration called for regulating credit rating agencies. Governments should limit their regulatory reliance on credit rating agencies and reform legal regimes to hold them liable for negligent behaviour in order to suppress conflicts of interest and ensure integrity, accountability and transparency.

It stressed the need for a more transparent international credit rating system that takes fully into account the needs, concerns and peculiarities of developing countries. It expressed concern about the methodology used by the major credit rating agencies and called for greater transparency and competition among rating agencies to avoid oligopolistic tendencies and their negative effects. It also called for discussions at the UN and other venues on policies to reduce dependency on them by enhancing their supervision and increasing transparency and competition through the establishment of independent assessment mechanisms.

On Global economic governance, the leaders affirmed that the world financial and economic crisis and its consequences for development have exposed the gaps and failures in global economic governance, including within the international financial institutions, and the urgent need for a global, universal and integrated response by the international community.

“We note with deep concern that seven years after the outbreak of the global crisis, there has been little progress made to strengthen the systemic, regulatory and structural aspects of the global financial system. Moreover, the lack of participation by developing countries in general in global economic issues and governance persists; this is a matter of grave concern because the workings of the global system affect all countries, and this democratic deficit has even more serious consequences for developing countries when the global economy is slowing down or in recession.

“We strongly call on the international community to redress the democratic deficit in global economic governance and provide developing countries their rightful place and participation in the governance and decision-making of all the institutions and forums where discussions and decisions are taken on global economic and financial issues.”

They affirmed that efforts to reform the international financial architecture should be seriously strengthened, leading to the full participation of developing countries in international financial and economic decision-making and norm-setting.

“We call for comprehensive reform of the Bretton Woods institutions, including enhancement of the voting powers of developing countries in a time-bound manner, in order to enable greater equity between developed and developing countries and to eliminate all types of conditionalities tied to aid.

“We call for the urgent completion of the 2010 IMF quota formula reform in order to ensure that the quotas and governance of IMF better reflect the relative weight of emerging and developing countries in the global economy.”

Noting that the redistribution of voting rights alone is not enough, the leaders said the reform should encompass liquidity creation, including improvement in the special drawing rights for developing countries, and the IMF must provide more comprehensive and flexible financial responses to the needs of developing countries, without imposing pro-cyclical conditionalities and respecting their need for adequate policy space.

Furthermore, leading personnel of the Bretton Woods institutions must be designated on the basis of their individual merits, through an open and fair process of selection. As long as IMF does not reflect the new realities in the global economy and its Director General keeps being designated through a process that lacks any transparency, its legitimacy will remain questionable.

They also stressed the need to hold a follow-up international conference on financing for development in 2015 to contribute to the post-2015 development agenda process. They recognized the important role of the UN and the central position of the General Assembly.

On Strengthening and reorienting the United Nations, the Declaration stressed the importance of the central role of the UN in global economic governance, which aims at enhancing the global partnership for development. The General Assembly and a strengthened ECOSOC could both act to mitigate the impact of the international financial and economic crisis and to ensure the right of developing countries to policy space for sustainable development.

The UN needs to improve its capabilities and capacities to fully implement its mandates and to ensure the effective delivery of its programmes in the social and economic development fields. The leaders urged the Secretary-General to further strengthen the development pillar of the whole Organization, including its Development Account and urged developed countries to show real political will to enable the UN to improve its capabilities in the social, environmental and economic development fields.

They expressed concern over the growing imbalance between assessed and voluntary contributions in the proposed programme budgets of the Organization and that any UN reform efforts, including on the budget process, must not seek to change the intergovernmental, multilateral and international nature of the Organization, but must strengthen the ability of Member States to perform their oversight and monitoring role.

They also expressed concern over budget cuts that have a negative impact on the implementation of mandates approved by the intergovernmental bodies of the United Nations, particularly in the development pillar.

They underscored the central role of the United Nations in global economic governance, as a truly universal and inclusive multilateral forum. They emphasized the important role the General Assembly should play in the appointment of the Secretary-General of the United Nations and that the process of selection of the Secretary-General should be inclusive of all Member States, as well as more transparent.

On Technology transfer, science and innovation for development, the leaders expressed concern that science, technology and innovation can be abused as instruments to limit and undermine countries’ sovereignty, sustainable development and poverty eradication. They called for an end to the use of information and communication technologies, including social networks, in contravention of international law and in detriment to any State, in particular members of the Group of 77 or their citizens.

They reaffirmed that technology transfer, technology integration and the development and promotion of endogenous technologies are important for developing countries and called on developed countries to implement their commitments to transfer technology to developing countries and provide access to technology on favourable terms, including concessional and preferential terms, to enable the developing countries to shift to a more sustainable development path.

They added that it is imperative that developed countries recommit themselves to the objective of technology transfer as one of the major components, of provision of the means of implementation for developing countries, and to take actions to bridge the technological gap.

The Declaration stated: “We call for the early establishment by the United Nations system of a technology facilitation mechanism that promotes the development, transfer and dissemination of clean and environmentally sound technologies, including cleaner fossil fuel technologies.

“We call for regulations and policies on intellectual property to be placed within a development framework, whereby intellectual property rights are oriented towards the promotion of balanced social, economic and environmental development. In this regard, we support the measures taken by developing countries to promote the implementation of the WIPO Development Agenda recommendations of 2007.”

They reiterated their call at the second South Summit of the G77, for WIPO to continue to include in its future plans and activities, including legal advice, a development dimension that includes promoting development and access to knowledge for all, pro-development norm-setting, harmonization with the Convention on Biological Diversity rules, establishing development-friendly principles, and the transfer and dissemination of technology.

“We also reiterate that the TRIPS Agreement of WTO contains flexibilities, and that it is the right of developing States members of WTO to make use of such flexibilities, as confirmed in the 2001 Declaration on the TRIPS Agreement and Public Health of WTO, and we support the use of these flexibilities in our countries, with the aim of promoting health, education and economic and social development. We note with great interest and appreciation that some developing countries have successfully made use of some TRIPS flexibilities to promote the use of generic medicines, which are lower in cost and thus greatly increase access to medicines at affordable prices.

“We reject attempts by any developed country or business interest to pressure developing countries not to exercise their right to make use of TRIPS Agreement flexibilities for social and development purposes and express our solidarity with those developing countries that have come under such pressure.

“We stress the need to protect the knowledge of developing countries, indigenous peoples and local communities with regard to genetic resources, biodiversity and traditional knowledge, and especially from continuing attempts by persons or companies to patent such resources and knowledge without the approval of the countries, indigenous peoples and communities concerned.

“We call for intensified efforts by our negotiators and policymakers to establish legal mechanisms, internationally or nationally, to prevent biopiracy by requiring disclosure of the country of origin and proof of benefit-sharing arrangements by applicants for such patents.

“We also call for strong provisions and effective mechanisms for technology transfer, including appropriate treatment of intellectual property, in the international climate change regime in the United Nations Framework Convention on Climate Change.”

On trade, the leaders believed that trade in the context of appropriate policies and rules can be an important tool for economic development. “It is essential to establish and uphold a universal, fair, rules-based, open, pro-development, non‑discriminatory, inclusive and equitable multilateral trading system that contributes to growth, sustainable development and employment, particularly for developing countries.

“We call for a timely and successful conclusion to the Doha Round of multilateral trade negotiations, which must fully respect its development mandate and place the needs and priorities of developing countries at its centre. Following the WTO Ministerial Conference in Bali in 2013, we call for an inclusive and transparent negotiating process and the prioritizing of the interests and issues of developing countries in the post-Bali programme.

“We view with concern that some developed countries members of WTO are more interested in gaining market access to developing countries, while they are themselves not willing to take adequate measures to eliminate or reduce protectionism in their agriculture sector or to provide more market access to developing countries.”

The leaders said they believe that “trade rules, in WTO or in bilateral and regional trade agreements, should enable developing countries to have sufficient policy space so that they can make use of policy instruments and measures that are required for their economic and social development.

“We reiterate our call for the effective strengthening of the special and differential treatment and less than full reciprocity principles and provisions in WTO so as to broaden the policy space of developing countries and enable them to benefit more from the multilateral trading system. We also call for bilateral trade and investment agreements involving developed and developing countries to have sufficient special and differential treatment for developing countries to enable them to retain adequate policy space for social and economic development.”

On Migration, the leaders recognized the need to address this issue through international, regional or bilateral cooperation and dialogue and through a comprehensive, balanced, coordinated and coherent approach, recognizing the role and responsibilities of countries of origin, transit and destination in promoting and protecting effectively the human rights and fundamental freedoms of all migrants and their families, especially those of women and children, regardless of their migration status.

We note that migration remains inadequately reflected in development frameworks at both the national and global levels. “Therefore, we are exploring the possibility of a legally binding convention on migration and development to improve the governance of international migration and to protect and promote the human rights of migrants and their contribution to development, regardless of their migratory status.”

They acknowledged the need to enhance the protection of all human rights and fundamental freedoms of migrant workers and their families and to consider the recognition of the qualifications and competencies of migrants and their access to low-cost financial services for remittances.

On Climate change, the leaders affirmed that the UNFCCC is the primary international, intergovernmental forum for negotiating the global response to climate change and that the international response to climate change must fully respect the principles, provisions and ultimate objective of the Convention, in particular the principles of equity and of common but differentiated responsibilities and respective capabilities.

They reaffirmed “the importance of continuing the negotiations on climate change under the Convention in accordance with its principles and provisions and of adopting, in 2015, a protocol, another legal instrument or an agreed outcome with legal force under the Convention applicable to all parties.”

They underscored that developing countries continue to suffer the most from the adverse impacts of climate change, even though they are the least responsible for climate change. “Accordingly, we call for developed countries to take the lead in responding to climate change.”

They added: “We recognize that low-lying and other small island countries, developing countries with low-lying coastal, arid and semi-arid areas or areas liable to floods, drought and desertification, and developing countries with fragile mountainous ecosystems are particularly vulnerable to the adverse effects of climate change.”

They reaffirmed the importance of implementing the Warsaw international mechanism for loss and damage associated with climate change impacts adopted at the nineteenth session of the UNFCCC Conference of the Parties in November 2013 and the urgency of taking concrete steps during this year for the immediate operationalization of the mechanism.

The leaders also stated: “We stress that the developed countries, given their historical responsibility, need to take the lead in addressing this challenge in accordance with the principles and provisions of the United Nations Framework Convention on Climate Change, particularly the principles of common but differentiated responsibilities and respective capabilities and equity, and provide financial and technological support to developing countries in a transparent, adequate and predictable manner under a modality of monitoring, reporting and verification.

“We reiterate that the extent to which developing countries will effectively implement their commitments under the United Nations Framework Convention on Climate Change will depend on the effective implementation by developed countries of their commitments under the Convention related to financial resources and transfer of technology and will take fully into account that economic and social development and poverty eradication are the first and overriding priorities of developing countries.

“We stress the need to urgently close the ambition gap, and express concern about the lack of fulfilment of commitments by developed countries. In addressing this gap, the focus must not be limited to mitigation only but also address gaps relating to finance, technology and support for capacity-building, balanced with a focus on adaptation to climate change. We emphasize that developed countries must take robust and ambitious mitigation commitments, with ambitious quantitative targets for limiting and reducing emissions, as required by science and mandated by the United Nations Framework Convention on Climate Change.

“We reiterate the urgency of expediting the process of operationalizing the Green Climate Fund and for its early capitalization, and call upon developed countries to meet the goal of mobilizing $100 billion each year by 2020 to address the needs of developing countries.”

On Biological diversity, the Declaration recognised the severity of global biodiversity loss and degradation of ecosystems, and the importance of the role of the collective actions of the indigenous people and local communities for the protection, use and conservation of biodiversity.

They welcomed the outcomes of the CBD’s eleventh meeting of the Conference of the Parties to the Convention in Hyderabad in 2012, especially the commitment to doubling biodiversity-related international financial flows to developing countries by 2015 and at least maintaining this level until 2020 to contribute to the achievement of the Convention’s three objectives, and called for a review of progress on this at the COP’s twelfth meeting towards adopting a final target for resource mobilization.

On Forests, the Declaration noted the outcome of the tenth session of the United Nations Forum on Forests in 2013, and underscore the importance of the four global objectives on forests and especially the fourth objective since it identifies the need to reverse the reduction in ODA and to mobilize new and additional financial resources for the implementation of sustainable forest management.

It called for the establishment of a new global forest fund in line with the principles of sustainable development, and in order to channel the funds needed by developing countries to sustainably manage their forests.

On Desertification, land degradation and drought, the Declaration reaffirmed these are serious concerns for developing countries and that international action is urgently required. There is the need for cooperation through the sharing of climate and weather information and forecasting and early warning systems related to desertification, land degradation and drought, as well as to dust storms and sandstorms, at the global, regional and subregional levels.

On Oceans and seas, the Declaration stressed the importance of the conservation and sustainable use of the oceans and seas and of their resources for sustainable development, and commit to protect and restore the health, productivity and resilience of oceans and marine ecosystems, to maintain their biodiversity, enabling their conservation and sustainable use.

On Internet governance, including the right to privacy, the leaders stated: “We view with dismay that some countries have recently been undertaking extensive, arbitrary and unlawful surveillance and/or interception of communications, including extraterritorial surveillance and/or interception of communications as well as the collection of personal data, including on a mass scale, on people and institutions in other countries, including on political leaders, senior officials and various government departments and agencies, as well as citizens.

“We call for the ending of such activities, which violate the human right to privacy of individuals and have a negative impact on the relations between countries. In this regard, we all call for intergovernmental entities to discuss and review the use of information and communications technologies to ensure that they fully comply with international law, including human rights law, in accordance with the purpose and principles of the Charter of the United Nations.”

They emphasized the important opportunities provided by information and communications technologies, including social media and related infrastructure, but also recognised that the illegal use of these technologies has a negative impact on nations and their citizens.

“In this regard, we express our strong rejection of the use of information and communications technologies in violation of international law, including the right to privacy, and of any action of this nature directed against any Member State, in particular a State member of the Group of 77.

“We further underscore the importance of ensuring that the use of such technologies should be fully compatible with the purposes and principles of the Charter of the United Nations and international law, in particular the principles of sovereignty, the non-interference in internal matters and the internationally recognized rules of civil coexistence among States.

“In this regard, we take note with concern of the information published in international media about the objectives of the so-called “ZunZuneo” network, which would constitute an illicit use of new information and communications technologies.

“We therefore reiterate our commitment to intensifying international efforts directed at safeguarding cyberspace and promoting its exclusive use for the achievement of peaceful purposes and as a vehicle to contribute to both economic and social development, and highlight that international cooperation, in full respect of human rights, is the only viable option for fostering the positive effects of information and communications technologies, preventing their potential negative effects, promoting their peaceful and legitimate use and guaranteeing that both scientific and technological progress is directed at preserving peace and promoting the welfare and development of our societies.”

(In another article, the Declaration’s sections on Sustainable Development Goals and the Post-2015 Development Agenda will be reported on.)

Author: Martin Khor is the Executive Director of the South Centre. Contact:

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