Monitoring Policy Making at the United Nations |
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Global Policy Forum List-Serv
GPF List-Serv
January 24 - 28, 2000Greetings from Global Policy Forum!
We were interested to read cautionary comments by the Financial Times on Monday, January 24, about the US trade deficit. The FT confirmed the point we made here last week, that overseas investors are financing the huge US trade deficit and only their continued confidence in the dollar staves off a chaotic moment of reckoning. The FT put it this way: "Domestic demand, buoyed by a highly valued stock market, continues to outstrip the growth of domestic supply. The current account [deficit] provides a helpful safety valve. But non-inflationary finance of the deficit relies on a continuation of the remarkably strong foreign demand for US assets."
Another voice of caution this past week was former Federal Reserve Chairman Paul Volker, one of the most respected gurus of Wall Street. In a long interview in the New York Times on Sunday, January 23, he talked at length about the US stock market and its gravity-defying rise. "You obviously have a kind of speculative fever," Volker said, noting that investors are "trading certificates that have no value." Looking ahead, he commented, "There's enormous confidence today, but it can evaporate very quickly." In short, we're in for a big tumble.
While the market rides high, though, multinational corporations continue their merger mania. We are grateful to our friend, Michael Renner of Worldwatch Institute, for providing us with an important new data series on cross-border merger activity, tracking the increasing tendency of firms to merge with others outside of their "home" country. According to this information (posted on the site this week), cross-border mergers in 1999 amounted to $1.127 trillion dollars, nearly double the rate of the previous year and almost five times the rate of 1995.
In all, during 1999, 9,655 cross-border deals were announced. Compared with 1995, the number of deals rose much more slowly than the dollar total, because the average size of deals has been rising sharply. Already in the new year, transnational firms have further stepped up their merger pace. National regulatory authorities, once actively opposed to high market concentration, are posing few objections.
Meanwhile, selection of the new chief of the International Monetary Fund continues apace, with rumored maneuvers between Germany, France and the United States over possible candidates. This backroom deal-making, among a few financial powerhouse countries, reminds us that these nations prefer to run the world with the least possible accountability. The Fifty Years is Enough Network is now circulating a letter of protest that begins: "The IMF and the international community attribute great importance to good governance, transparency, and accountability and require borrowing governments to reform their governance systems as a condition of receiving loans. Yet the process for selecting the new IMF Managing Director is highly secretive and undemocratic." The letter goes on to propose sensible basic guidelines for the process, suggesting, among other things, that criteria and candidates for the post should be made public and that voting results for the new position should be on record.
News of another welcome initiative on the global economy has also just arrived. A number of important German NGOs, including our friends at WEED, have formed a Network for Democratic Control of International Financial Markets. It seems that about a hundred NGO representatives met in Frankfurt late last week and issued a call for serious economic reforms, including a Tobin Tax on foreign exchange markets and abolition of offshore (unregulated) financial centers.
At the United Nations, the main financial news for the past five years has been about the organization's own budgetary crisis. Recently-released year-end data show that the crisis may have eased slightly, thanks to some major payments by the United States. A payment of $52 million to the regular budget in December brought the US debt down to $168 million, a very big decline from $316 million in 1998 and $414 million in 1995, the peak year of the crisis. But the problems are far from over. As of December 31, member states still owed the UN $1.718 billion of which the US debt alone stood at $1.170 billion, mostly in the peacekeeping account.
Four aspects of the crisis remain unresolved. First, members states may not agree to conditions imposed by the US Congress, which could put further US payments towards the arrears into jeopardy. Second, other states may be backing away from their dues responsibility. The Japanese Diet is now considering a bill to unilaterally reduce Japan's assessment, currently the second highest after the United States. Third, major contributions to voluntary agencies, particularly UNDP, are so drastically reduced, that the future viability of major UN programs may be in doubt. Fourth, with the rapid increase in peacekeeping activity in late 1999 (a trend that will probably continue in the current year) there are questions as to whether the United States Congress will be willing to appropriate such substantial new monies. Obviously, if the global economic system heads into deeper trouble, the UN's financial problems would only worsen.
Since Global Policy Forum has been working in a high-profile way on the UN's financial crisis, Security Council and other issues for at least five years, it is widely assumed that we have enjoyed the highest level of NGO accreditation. But we have not. So we are now please to announce that GPF was recommended for ECOSOC consultative status on Monday, January 24, by the intergovernmental Committee on NGOs (GPF already had accreditation with the UN Department of Public Information). The previous Monday, GPF Director Jim Paul was called to the podium in Conference Room Four for an unusual hour-and-a-half of questioning by delegates. GPF was also asked to answer two additional rounds of written questions. Clearly, delegations saw GPF's breadth and level of activity as very unusual and (to some) even troubling.
Some delegations were unhappy that GPF had made critical remarks about the Committee, in the report on "NGOs and the UN" that we issued last June. Delegations raised many other issues, including our work with the Security Council, our advocacy of "human security," and our position on social policy matters. Few applicants have been so carefully scrutinized. In the end, after raising the case of GPF at least three times, the Committee recommended for accreditation by consensus.
