Statement by John F. Sammis, Deputy United States Representative to ECOSOC, on Agenda Item 51: International Financial System and Development, in the Second Committee of the Sixty-fourth Session of the United Nations General Assembly



U.S. Mission to the United Nations 
John F. Sammis, Deputy United States Representative to ECOSOC
New York, NY
October 12, 2009




AS DELIVERED

Thank you, Mr. Chairman.

The United States is pleased to be here with you today to discuss the very important economic and financial issues before us.  Assessing the effects of the global slowdown and reaching consensus on the resolutions before us will be a key topic for the Second Committee this year, and we look forward to a constructive dialogue as we work together to help meet our shared goals of economic stability and sustainable development. 
 
As was the case twelve months ago, many countries continue to face difficult economic challenges in a world economy that has slowed after many years of strong growth.  Unlike last year, however, thanks to swift and decisive actions taken by both developed and developing countries, there are clear signs that the world economy is on the mend and returning to a path of growth.  Twelve months ago we discussed the very real possibility of another Great Depression; today we come together as a world that has stepped back from the brink of economic collapse by working together for the greater good.

The United States has taken unprecedented policy steps to restore growth, boost employment and repair our domestic financial system.  Congress passed a fiscal stimulus package that is equivalent to roughly 2 percent of GDP in 2009 and 2.5 percent in 2010.  In addition, the Administration has introduced sweeping legislation in Congress to close the gaps in our regulatory system and modernize it to ensure a more stable financial system. 

Internationally, world leaders have taken equally strong measures.  Together, we mobilized over a trillion dollars to support the global recovery, reinforcing the emergency resources of the International Monetary Fund (IMF), the World Bank and the multilateral development banks.  These organizations have responded to the challenge before them and used the additional resources to support member countries.  The IMF is dramatically increasing concessional lending to low-income countries to help them weather this economic storm.  It has taken a more flexible approach to conditionality in its lending programs, emphasizing country ownership of IMF programs.  The Fund has also bolstered its members’ reserves with the allocation of Special Drawing Rights (SDRs) worth approximately $283 billion.  Emerging markets and developing countries have received SDRs worth more than $100 billion from this allocation.  Collectively, the development banks have increased their lending targets by over $100 billion above their planned pre-crisis levels. 

Since the onset of the global crisis, world leaders have developed and begun implementing sweeping reforms to tackle the root causes of the crisis and transform the system for global financial regulation.  Substantial progress has been made in strengthening prudential oversight, improving risk management, increasing transparency, promoting market integrity, establishing supervisory colleges, and reinforcing international cooperation.  The scope of regulation and oversight have been enhanced and expanded, with tougher regulation of over-the-counter (OTC) derivatives, securitization markets, credit rating agencies, and hedge funds.  The Financial Stability Board's mandate and membership have been expanded.  We now have the means to better identify vulnerabilities within the financial system, anticipate potential stresses, and act swiftly to respond to a crisis.

Despite all of the positive developments, however, we know it is far too soon to declare victory and that risks to the global recovery remain.   Many countries continue to confront the effects of the global recession, and face continuing difficulties in meeting their development goals.  We see three key challenges looking forward:

First, we must be certain that countries draw back from their fiscal stimulus packages at the right time, with a well thought out plan.  

Second, we must ensure that the international community continues to ensure appropriate support to the world's poorest countries, so that they recover as rapidly as possible from the crisis.  Collectively, we have made hard won progress towards the Millennium Development Goals and it is critical that we respond directly to the needs of the most vulnerable among us. We look to the UN to ensure that the voices, concerns and development needs of all of our member states are heard. 

Third, and finally, we welcome the intensified discussions underway in many fora toward a global consensus on achieving strong, sustainable, and balanced world growth.  The UN is tackling a number of difficult, cross-cutting issues, including food security, global health and climate change.  Now, more than ever before, we have the opportunity to turn these various dialogues into an opportunity for real, sustainable global development.  The crisis has shown us that formal and informal international cooperation works and that we have the ability to create profound change when we work together. 

Mr. Chairman, that is our goal here:  to do no less than our very best to turn the ideal of sustainable growth into a reality.  We believe the important work of the second committee on the issues before us now can help set us on this path.

Thank you very much.

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PRN: 2009/210