Reports on trade, finance among issues considered in Second Committee in October
The Secretary-General's report on "International co-operation in the fields of money, finance, debt, resource flows, trade and development' (A/40/708), reviewed in October by the Second Committee (Economic and Financial), indicated common agreement that various problems confronting the international economy were interrelated and solutions required action on a number of fronts.
The paper was based on information obtained through consultations with Governments, United Nations bodies and specialized agencies.
Developing countries indicated that some recent problems facing the international economy were manifestations of structural imbalances in the system. They called for improved coordination of macro-economic policies of major developed countries; reform of the international monetary system to take into account changes in economic relations since Bretton Woods, and equitable participation in the decision-making process affecting the global economy.
While recognizing the importance of domestic policies for economic growth, many countries, called for greater emphasis on investment, growth and supply-oriented policies for long-term development.
The debt crisis could not be seen in isolation from other aspects of international economic relationships. A growth strategy based on external borrowing had been advocated during the 1970s.
Developing countries stressed that growth in their exports was essential for their economic development, but a liberalization of international trade was needed for this to occur.
The continuing weakness of prices of primary commodities, so important to export earnings of many developing countries, had serious implications, including the capacity of those countries to repay their external debt.
Aspects of the international monetary system required reform and improvement.
Developing countries strongly urged the convening, under United Nations auspices, of an international conference on money, finance and trade.
Developed market economy nations recognized the importance of a coherent approach to the problems of money, finance, debt and trade. They hoped that the 1985 meetings of the IMF Interim Committee and the IMF/World Bank Development Committee would provide a new opportunity to discuss external indebtedness, flow of resources and trade policies.
Some developed countries affirmed their commitment to official development aid targets, and some supported an increase in World Bank capital. Stress was laid on efficiency in aid use, and greater efforts by developing countries to mobilize and effectively use domestic resources.
All developed countries agreed that free flow of international trade was essential for the prosperity of the world economy and urged, as did developing countries, export expansion. A number of developed countries had called for a new round of multilateral trade negotiations.
On money, finance and debt issues, developed countries generally stressed the importance of sound domestic policies and continuing adjustment efforts, particularly in major borrowing countries. While a global view of the debt problem was needed, debt restructuring, according to many developed countries, had to be undertaken on a case-by-case basis. They accepted that developing countries' efforts had to be supported by adequate external finance and trade liberalization.
The present international monetary system had served the international economy well and needed strengthening rather than a major overhaul.
Countries with centrally planned economies viewed the present economic crisis as a result of the working of the Western world's economic system, with its unequal relationships among countries. They supported the convening of an international conference on trade, debt, money and finance. …