New York Times gives a spin on UN process on financial crisis

UNITED NATIONS — The route out of the financial crisis — at least in the view of Miguel d’Escoto Brockmann, a ranking Sandinista and the fractious president of the United Nations General Assembly — should be lined with all manner of new global institutions, authorities and advisory boards.

How many? Nine, to be exact and they are (take a deep breath) the Global Stimulus Fund, the Global Public Goods Authority, the Global Tax Authority, the Global Financial Products Safety Commission, the Global Financial Regulatory Authority, the Global Competition Authority, the Global Council of Financial and Economic Advisers, the Global Economic Coordination Council, and the World Monetary Board.

Their formation was included in the agenda Mr. d’Escoto unveiled this month for a pending United Nations summit meeting on the economic crisis. But member countries were having a hard time reshaping his proposals into something workable. By the start of the weekend, the extended haggling had been reduced to whether the summit meeting, originally scheduled for next Monday through Wednesday, should be postponed until the end of June because no compromise agenda was in sight.

The problem boils down to competing visions of what role the United Nations should play in the global financial crisis.

Everyone basically agreed that the United Nations should serve as the voice of the poorest nations, and that its many tentacles provided an excellent source for collecting data on the impact of the meltdown. While most General Assembly members seek attention from existing global institutions for their economic distress, however, they are not agitating for a reversal of the institutions’ market-economy bent.

To Mr. d’Escoto, a priest and former Nicaraguan foreign minister, the world financial crisis demonstrates the need for something closer to a revolution, both to mend the deep wounds opened by capitalist excess and to prevent future calamity.

He wants the General Assembly to be anointed the leader in reformulating the world’s economic institutions. (The draft document suggested an open-ended process, steered by Mr. d’Escoto.)

“If the new financial system and architecture is going to be put together, and these rules of the game are going to affect everyone, as the crisis has affected everyone, the proposed solution and new rules of the game should be legitimate for everyone,” said Paul Oquist, Mr. d’Escoto’s senior adviser for the conference, and a Nicaraguan official. “It is the General Assembly that offers that in a universal vein.”

Sitting beneath portraits of Fidel Castro of Cuba, President Hugo Chávez of Venezuela and President Daniel Ortega of Nicaragua, among others, Mr. Oquist also said that the meltdown of 2008 proved that no state or states had a monopoly on financial wisdom. That statement, at least, attracts a consensus here.

But Mr. d’Escoto’s critics, and they are legion, accuse him of trying to Sandanista-ize the world or having serious delusions of grandeur. They say that proposals like levying an international tax on all financial transactions or replacing the dollar as the international reserve currency are well beyond the role of the United Nations.

A compromise document that eliminated many of the most radical changes is now under consideration, with few of the proposed global institutions surviving.

The diplomatic standoff started with a breach of etiquette: traditionally, before any conference, the General Assembly president appoints a couple of ambassadors as “facilitators” who consult widely and then propose a working document.

But this time, the plan, envisioning the United Nations in a supporting role, proved insufficiently sweeping for Mr. d’Escoto, so he tossed aside the entire draft and supplanted it with one of his own. To lend it an aura of respectability, his aides point out repeatedly that the president got many of his ideas from a distinguished panel of experts led by an American economist and Nobel laureate, Joseph E. Stiglitz.

Star-studded panels of experts clog the corridors around here, so nobody faults Mr. d’Escoto for that defense. But many ambassadors noted dryly that member countries were usually given the chance to discuss such recommendations before their insertion into official documents.

United Nations members had expected the conference to provide a role for not-so-rich nations in proposing solutions to the crisis, but several ambassadors said they had searched in vain for that amid the starring role for Mr. d’Escoto and his team. “The idea is to involve everyone in dealing with the problem,” said Maged A. Abdelaziz, the Egyptian ambassador. “Too much is being asked of the Secretariat, and nothing from the member states.”

May 25, 2009



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