All links below picked up on Weitzenegger’s Website for International Development Cooperation and its Newsletter.
Excerpt of page 3/6 of the UN-NGLS Bulletin (not dated), 6 pdf-pages:
… Stiglitz Commission Releases Interim Recommendations: The Commission of Experts of the President of the UN General Assembly on Reforms of the International Monetary and Financial System – also known as the ‘Stiglitz Commission’ – was established by the GA President and is providing recommendations on international financial structures and practices as part of broad-based inputs into the preparations for the Conference and beyond. They released a series of interim recommendations in mid-March which were discussed at the General Assembly from 25-27 March. It is expected that these recommendations will provide at least some of the informal basis for negotiating an outcome document at the June Conference.
The recommendations in the report focused mainly around proposals for new policy actions to be undertaken by governments and international institutions and for the establishment of new institutions and mechanism. The recommendations included:
Regarding new policy actions:
- Industrialized countries should dedicate 1% of their stimulus packages to offset the impact of the financial crisis to developing countries (in additional to traditional official development assistance commitments).
- Immediate creation of a new credit facility. If it was established quickly enough, it could be a means of disbursing the necessary funding. The governance of the new facility should be more reflective of democratic principles, with strong representation of developing countries and those countries contributing to the facility. These governance arrangements could provide lessons for reforming existing institutions.
- Those schemes should avoid conditionalities (which induce “procyclical” policies which many countries are still required to pursue by the IMF even as these policies contribute to the crisis).
- Issuing of Special Drawing Rights (SDRs) and support to regional efforts like the Chiang Mai initiative to augment developing countries’ resources.
- A new Global Reserve System (a kind of greatly expanded SDR) which could mitigate difficulties caused by asymmetric adjustment between surplus and deficit countries and redirect excessive reserve accumulation in developing countries to investments in these countries real economies (rather than subsidizing rich countries’ deficit spending).
- Restricting transactions between financial institutions operating in tax havens and similar financial centres and those in more highly regulatedcountries.
- Strengthening institutional arrangements to improve harmonization and transparency on tax matters.
- Explore a variety of mechanisms of innovative finance, including international taxes (carbon tax and financial services tax).
- On trade issues, the Commission notes that many bilateral and multilateral trade agreements contain commitments that circumscribe the ability of countries to respond to the current crisis with appropriate regulatory, structural and macroeconomic reforms and reform packages. Developing countries need policy frameworks that can help protect them from regulatory and macroeconomic failures in systemically significant countries.
- It notes that the development dimensions of a successful completion of the Doha trade round are unclear and calls for a “true development round” to create an international trade regime which truly promotes growth in developing countries. The long recognized principle of special and differential treatment for developing countries must be preserved.
Regarding new institutions: … (full text).
Communication from the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions, April 8, 2009, 14 pdf-pages;
The Financial Crisis and its impact on Developing Countries, working paper, April 2009, International Policy Centre for Inclusive Growth, 20 pdf pages.