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UPDATE 1-UN meeting adopts finance reform call, US critical

Published 06/26/2009, 05:11 PM
Updated 06/26/2009, 05:24 PM
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* U.N. lacks authority, expertise in global finance - U.S.

* NGOs criticize finance reform proposals as toothless

* Less than a dozen world leaders attended the conference (Recasts with adoption; adds U.S., Brazil, Venezuela)

By Louis Charbonneau

UNITED NATIONS, June 26 (Reuters) - A United Nations meeting on the global economic crisis adopted proposals on Friday for reforming the world financial system, but the United States said the world body had no authority to order changes.

After months of negotiations, over 140 members of the U.N. General Assembly approved by consensus a 15-page resolution that is short on specifics but includes a call for increased U.N. involvement in global economic policy-making.

"Today, we have set forth our global consensus on the responses to this crisis, prioritized required actions and defined a clear role for the United Nations," it said.

"We are doing so in the interest of all nations in order to achieve a more inclusive, equitable, balanced, development-oriented and sustainable economic development to help overcome poverty and inequality," the resolution said.

As expected, a member of the U.S. delegation read a statement distancing the United States from parts of the resolution, including provisions on reforming financial bodies like the International Monetary Fund and the World Bank.

"Our strong view is that the U.N. does not have the expertise or the mandate to serve as a forum for meaningful dialogue or to provide direction on issues such as reserve systems (and) the international financial institutions," U.S. envoy John Sammis told the meeting.

Among other things, the draft calls for increased representation of developing countries and better gender balance at the IMF and World Bank.

The resolution says some countries have called for a "more efficient reserve system" and urges further study of the possibility of replacing the U.S. dollar with the IMF's Special Drawing Rights as the top reserve unit. Both Russia and China have voiced support for the idea of using SDRs for reserves.

Sammis dismissed the idea that the three-day conference had given the United Nations a mandate to overhaul the financial system and institutions like the IMF and World Bank.

"The international financial institutions have governing structures ... that are independent of the United Nations" and could only be changed by their governing boards and shareholders, he said.

"DEFICIENCIES"

Diplomats from the Group of 77 bloc of developing nations complained that the final document was disappointing, but some said it was positive that it touched on all the key issues.

A Venezuelan delegate told the meeting that the resolution had "major deficiencies," above all its failure to mandate a precise role for the United Nations in the global economy.

Brazilian Foreign Minister Celso Amorim told reporters that the resolution proved "it is possible for the United Nations, for the 192 (member) countries, to have a serious and rational discussion about the international crisis."

Non-governmental organizations that focus on combating global poverty supported calls for greater U.N. involvement in the global economy, but said the resolution was inadequate.

The Global Social Economy Group, or GSEG, an umbrella group that represents over 200 trade unions, social movements and non-governmental organizations, said in a statement that it was "seriously disappointed in the official outcome document."

GSEG said the resolution was no more than a non-binding appeal for fiscal stimulus measures, delivery of aid promises, debt relief and additional grants for poor countries.

The final resolution was watered down from an earlier version prepared by U.N. General Assembly President Miguel D'Escoto, a leftist former foreign minister of Nicaragua, that Western delegations said was too radical.

Although the meeting was billed as a summit, no Western leaders attended. Less than a dozen presidents and prime ministers, mostly Latin American and Caribbean, showed up. Others taking part sent lower-level delegates. (Additional reporting by Walter Brandimarte and Patrick Worsnip)

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