Among those who care about the fate of the United Nations it is widely assumed — and regretted — that the UN stood on the sidelines at the start of the global financial crisis, and let the G20, the International Monetary Fund and the World Bank take the lead in an international response. Jean-Pierre Bugada, chief of communication for France and Monaco at the UN Regional Information Centre, said the UN had “missed the boat” (1). The accusation is only partly true. More accurately, western states, with the UK and US in the lead, tried hard to ensure that the UN did not become a forum for discussion on the crisis, and the UN Secretary-General supported them.
Soon after the crash in 2008, Miguel d’Escoto Brockmann, a (suspended) Nicaraguan priest and former foreign minister who was president of the 63rd session of the UN General Assembly, initiated a UN-sponsored study of immediate and longer-term measures to mitigate the impact of the crisis, and of the necessary reforms of the international financial architecture. The report was to be discussed at a specially convened summit of world leaders.
This was probably an unprecedented move: eminent person groups are formed by the Secretariat, and normally by the Secretary-General himself. Brockmann’s initiative came from his larger agenda of revitalising the General Assembly, where developing countries have a natural majority — an agenda that he announced at the start of his presidency and pursued to its end. When asked whether he thought the G7, G8 or G20 would do the most to help address the crisis, he responded: “I prefer the G192.” In forming the group, his larger aim was to increase the power of the General Assembly by creating the precedent of expert commissions, on the model of the Intergovernmental Panel on Climate Change.
The western states, led by the UK and US (most responsible for the crisis), opposed this UN initiative. They wanted the G20 and the IMF, in which they have much more influence, to take charge of a global response. The UN was to have at most an observer role, and the Secretary-General’s office agreed. Ban Ki-moon’s responsiveness to western wishes had been one of his strongest recruitment assets, after the less-than-fully-compliant Kofi Annan. Nevertheless, Brockmann managed to recruit a high-powered commission chaired by the Nobel Prize-winning economist Joseph Stiglitz (2), and it produced a report.
Brockmann understood that the project had to be kept at a distance from both the Secretary-General’s office and the Department of Economic and Social Affairs (DESA). These would demand that the report be “balanced” between neoliberal orthodoxy and the more heterodox views of the commission’s members; they would try to remove sensitive topics, such as financial system regulation and reform, and to prevent the report from giving General Assembly members clear principles and prescriptions for debate. But even Brockmann did not anticipate how aggressively the Secretary-General’s office — spurred on by US advisers — would try to obstruct the work of the commission. Without funding from the UN general budget, the president’s discretionary budget was not enough for even one meeting of the Stiglitz commission (air fares, hotels and expenses). Raising the money was a headache: most of it came directly from member states whose names have not been made public.
The US ambassador to the UN, Susan Rice, and her staff made it clear that the US government thought the G20, not the General Assembly, should be the central forum for debate, and insisted that the UN report should not interfere. Behind the scenes, the US government also wished to boost the global leadership role of the UK prime minister Gordon Brown before the April 2009 G20 summit in London.
The UK did most to restrict the commission’s work. Its ambassador to the UN, John Sawers, was hostile to the project, and orchestrated phone calls from the British diplomatic service to nearly all members of the commission telling them they should quit to avoid personal and professional embarrassment. None quit; some were amused.
The report was still presented, and a major UN conference was held in June 2009 to discuss it, with a small number of heads of government. On the eve of the summit US president Barack Obama and his advisers debated whether the US should agree to the document drafted as the conference output. US Treasury Secretary Timothy Geithner was adamantly opposed. Susan Rice was (tactically) ambivalent and argued that the US should not kill the first major UN conference on the new administration’s watch. So they reached a compromise. At the conference the US voted to approve the document; then the number two in the US delegation, John Sammis, read out a statement of “clarification” that listed several substantive US disagreements with the document (3). The UN was, he concluded, the wrong venue for discussion of most of the issues: “The strengths of the United Nations lie in its broad development mandate and large field presence. Our strong view is that the United Nations does not have the expertise or the mandate to serve as a suitable forum or provide direction … on reserve systems, international financial institutions, and the international financial architecture.”
The UK and US worked hard to ensure that mainstream press coverage would be dismissive of the UN “farce”, “circus” and “embarrassment” — the terms Sawers used in his campaign to discredit the effort: they succeeded in getting those terms picked up across the media. The attacks seldom referred to the substance of the issues or to the quality of the commission report.
The western states, coordinated by the US and UK, fought to ensure the UN could not do follow-up work, and rejected a proposal that the commission report back to the General Assembly the following year. The one agreed follow-up process was a vaguely worked commitment to establish an “open-ended working group”. The commission’s organisers got a promise from Dr Ali Abdussalam Treki, the incoming president of the General Assembly, that he would continue to support the project; but as soon as he took office he dropped the idea, and his successors have not picked it up.
The whole project for the UN General Assembly to take a lead in the international debate about the global financial crisis stalled there. As the West wanted, the G20 did the preparatory work and the IMF reassumed the role of sole legitimate forum for negotiations.
Sawers left the UN in 2009 to become chief of the UK intelligence service MI6. Treki failed to support the follow-on: he is from Libya, and seems to have made a personal case to US and UK intelligence to be spared the fate of the rest of his government. A small number of developing countries, and an EU delegation unwilling to take overt responsibility for quashing the follow-up, kept the General Assembly process on life support. Debate continued in the Economic and Social Council (ECOSOC), to which some topics had been referred for recommendations to the General Assembly. Some non-UN organisations also helped; the Friedrich Ebert Stiftung (German social democratic foundation) sponsored expert dialogues on relevant subjects. A few intrepid developing countries have slowly rebuilt the case for a modest General Assembly role on specific issues (commodity price volatility, enhanced mechanisms for sovereign debt resolution).
Since there is a strong rule requiring formal follow-up to any major UN conference, the project could not be abandoned. But there was another fight over the reporting back to the General Assembly. The US and UK wanted to make sure it was a one-off event, and be organised to guarantee that its conclusions would support western arguments.
The General Assembly’s European co-facilitator from San Marino was appointed to consult with member states and, with the help of the Secretary-General’s office, planned a one-off two-day “high-level thematic debate on the state of the world economy” to showcase the heads of the IMF, World Bank, World Trade Organisation, OECD and other mainstream eminences. At the end of this the co-facilitators would issue a report, and that would thankfully be it.
It did not quite turn out that way. The debate was held this May, almost three years after the initial conference. The co-sponsors (Ban Ki-moon and the current president of the General Assembly) failed to attract a head of any major non-UN organisation. With few exceptions, the heads of state and government who participated were from small, developing countries. But however downgraded, the event did affirm that its conclusions should provide input for further UN follow-up to the report, ensuring that the debate was not quite the end of the affair.
All this confirms the tendency of leading western states to marginalise UN organisations over economic and financial issues, limiting them instead to monitoring technical issues, and soft issues such as refugee aid and poverty reduction. They react to assertiveness from developing countries by forcing gridlock in multilateral organisations and finding, or creating, other venues in which they have clearer dominance. Given the stalemate, there is merit in finding other institutions to handle parts of larger global issues; but leading western states carry a large share of responsibility for creating the stalemate.
The UN remains the legitimate global governance organisation and should be playing a central coordinating role in financial and economic issues. Western states may serve their own short-term interests by marginalising it and relying on the G7, the G20, the IMF, the Financial Stability Board and the Basel Committee, where they are still dominant. They should recognise that it is in their longer-term interests to keep the UN going as a central coordinating venue, issuing aspirational declarations, even if those statements are not what the West wants to hear. The cost of the UN to the budgets of the main contributing states is very small; and repeated interaction helps rising powers to get used to global responsibilities. Meanwhile, the story of the Stiglitz commission underlines the responsibility of western media to undertake more independent investigation rather than parrot the views of representatives of western states as their own.
Robert H Wade is professor of political economy and development at the London School of Economics, author of Governing the Market, Princeton University Press, 2003, and winner of the Leontief Prize in Economics in 2008.
(2) Its full name was the Commission of Experts of the President of the United Nations General Assembly on Reforms of the International Monetary and Financial System.
(3) Statement by John F Sammis, Alternate Head of Delegation, on the adoption of the outcome of the United Nations Conference on the World Financial and Economic Crisis and its Impact on Development, 26 June 2009.
This article appears in the excellent Le Monde Diplomatique, whose English language edition can be found at mondediplo.com. This full text appears by agreement with Le Monde Diplomatique. CounterPunch features two or three articles from LMD every month.