REMARKS BY AMBASSADOR VANU GOPALA MENON, PERMANENT REPRESENTATIVE OF SINGAPORE TO THE UNITED NATIONS AT THE ECOSOC PANEL DISCUSSION ON "GLOBAL ECONOMIC GOVERNANCE", 8 JULY 2010 ​

REMARKS BY AMBASSADOR VANU GOPALA MENON, PERMANENT REPRESENTATIVE OF SINGAPORE TO THE UNITED NATIONS AT THE ECOSOC PANEL DISCUSSION ON "GLOBAL ECONOMIC GOVERNANCE", 8 JULY 2010

Let me first thank Ambassador Wetland for convening today's meeting and for inviting me to be a panellist at this session. Following the recent Toronto G-20 Summit, this session (and in fact this entire substantive session of ECOSOC) is a timely opportunity for much-needed reflection on the role of the UN in the area of global economic governance and the challenges the UN faces in responding to the global financial and economic crisis.

During the height of the global financial and economic crisis about a year and a half ago, countries and institutions alike scrambled to contain the fallout from the crisis. The UN sought ways to address the crisis, including through lengthy negotiations which culminated in the Conference on the World Financial and Economic Crisis and its Impact on Development in June last year. The G-20 also simultaneously took on an increasingly active role during this period in catalysing global actions. It is generally acknowledged that these actions ultimately helped avert a global economic depression, which led to the G-20 designating itself as the "premier forum for our international economic cooperation" in Pittsburgh last September. The fact that the G-20 was able to help avert a global depression, without paying much heed to what the UN was also trying to do to tackle the crisis raised some fundamental questions about the role of the UN in global economic governance.

In fact, a common observation today in the UN amongst Member States is the difficulty faced in forging UN responses to major challenges. In this regard, I was struck by the comment made by an Ambassador to the UN who said something along the following line, "If the UN does not step up to the plate, it will be bypassed and we will have no choice but to deal with the urgent and important issues of the day outside the UN framework, perhaps in the G-20."

While I did not think that it was a fair comment on the UN, there is certainly some concern in this house that if the G-20 continues to gain legs, this exclusive grouping could challenge and perhaps even undermine the UN. At the same time, we should also look at the overall record of the G-20. While the G-20 has helped to inject an element of stability into the global economic and financial system, its record in other areas of international economics, say in international trade, leaves a lot to be desired.

As you would recall, at the Washington G-20 Summit in November 2008, the leaders not only rejected protectionism but issued an unanimous call to "refrain from raising new barriers to investment or to trade in goods and services, imposing new export restrictions, or implementing WTO-inconsistent measures to stimulate exports" for the next 12 months. But as soon as the ink had dried on the G-20 communiqué, several of its participants had announced their intention to raise import tariffs and impose other trade restrictions. And frankly, the G-20 has not done much on the international trade front since then, other than repeating the call for avoiding protectionist barriers. That is not good enough. One cannot simply wish away protectionism through a communiqué. The G-20, which accounts for 85 percent of the global economy and whose members are in many ways the key players on the Doha Development Agenda, should be in a position to galvanise action to conclude the Doha Round. But it is not happening. And that says something about the limits of the G-20.

More recently, at the Toronto Summit, the G-20 decided to include the issue of Development on its agenda. While a few UN members have expressed some concern that the G-20 is straying off the narrow path of banking reform and managing the global financial and economic situation, it may be a good development. When the G-20 was in crisis management mode, there was little room or time left for more systemic considerations of how best to achieve a comprehensive and coordinated approach to the world's economic predicament. As a result, longer-term goals like Development receded and took a back seat even though many developing countries suffered severe setbacks from the repercussions of the global crisis.

If we are to, however, sustain the emerging recovery, we should think hard about how to put these longer-term agendas back on track. In this regard, I am glad that the G-20 is starting to pay more attention to Development and has in fact taken a number of significant steps to promote it. It has worked to replenish the capital of multilateral development banks and committed to mobilise funds for proposals from the global SME Finance Challenge. It is also making its efforts more systematically by setting up a Working Group on Development to draw up a multi-year action plan.

This development (ie the inclusion of Development on the G-20 agenda) may hopefully also engender a better relationship between the G-20 and the UN. Right now, the relationship between the UN and the G-20 is still quite lukewarm and at best tentative. However, with Development included in the G-20 agenda, I can envisage (or at least hope for) a more substantive and focused role for the UN in the discussions on this very important issue. The UN remains, in terms of resources and its broad involvement of stakeholders, best placed to drive the Development agenda and move it forward. The G-20's endeavours in the area of Development should therefore build on and complement the UN's existing work on Development. The Development Cooperation Forum and Financing for Development discussions at the UN, including in ECOSOC, for instance, provides a ready platform for the G-20 to build upon. If the G-20 and the UN play it well - approach the discussions on Development in a cooperative manner - we might see the start of a new and better relationship between the UN and the G-20. That will be good for both sides.

The UN has its own strengths. It is seen to be inclusive, representing the voices of the community of nations and the only global body with unquestioned legitimacy. It has a Charter and the ability to make binding decisions, unlike the G-20. The G-20, being an exclusive club with a limited ambit, will need the UN to give effect to many of its decisions. Right now, there is a great deal of resistance to even mentioning the G-20 in UN documents, let alone implementing G-20 recommendations! Hopefully, a constructive discussion on Development will help turn the page and forge a better relationship between the UN and the G-20.

But notwithstanding its intellectual resources, mandate and its global reach, the UN could still be left out in the cold if it does not fulfil its potential to lead. It was in this context that the informal Global Governance Group (3G), of which Singapore is a member, has stressed the necessity for the UN and the Secretary-General to bring substantive contributions, in terms of ideas, to G-20 Summits as the engagement has to be a two-way street, adding value on both sides. In this regard, the UN has made progress in getting its act together, with ECOSOC being tasked last year to consider measures to strengthen the UN's response to the crisis. More, however, needs to be done - not just in terms of formulating a response to the crisis, but also reforming the UN as a whole to better adapt it to meet such global challenges.

Reform is something we have to start addressing seriously now while there is still impetus to act, whether from the crisis itself or the spectre of competition from the G-20. While it is difficult to get movement with 192 countries, this could be an opportune moment for Member States to reflect on how the UN can improve its internal processes so that it can have an impact on both global economic governance and global governance as a whole. The G-20's role might fade again into the background, as it did after the 1997 Asian Financial Crisis had passed. But if the UN does not seize this opportunity to reform, it will simply find itself caught on the back foot vis-à-vis some other global group which might emerge when the next crisis comes around.

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