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Organized by the Inter-parliamentary Union 1. Background The Parliamentary Conference on the Global Economic Crisis was organized on the initiative of the Inter-Parliamentary Union to educate parliamentarians on the current economic upheaval and to give them the opportunity to meet with highly qualified experts and benefit from their knowledge. Another objective of the conference was to develop ideas for a parliamentary strategy. 2. Agenda and main themes of the Parliamentary Conference on the Global Economic Crisis The Parliamentary Conference on the Global Economic Crisis, held at the Palais des Nations in Geneva, had a full and ambitious agenda. It was not only an opportunity for parliamentarians to hear from experts and discuss among themselves many aspects of the present situation, but also to talk about ways in which the economic and financial system could emerge from the crisis on a better footing for the future. The first day, the conference focused on how the crisis came about and on ways to reduce its impact and curb social recession. The parliamentarians also focused on ways to look for new growth and stability and mitigate the impact of the crisis on development. On the second day, time was spent mainly on reform of the international financial system, followed by a discussion on how to involve parliamentarians in finding solutions. Beforehand, the participants looked at gender aspects of the economic crisis. Here is a summary of the themes addressed at the various interactive panel discussions: ·Cascading failures: the genesis of the crisis ·Macroeconomic policies to stimulate the global economy ·Creating jobs and warding off social recession ·Finding a new path to stability and growth: conclusions of the G20 ·Mitigating the impact of the crisis on development ·Gender aspects of the economic crisis ·Reform of the international financial system ·Elements for a parliamentary strategy No formal outcome document was produced at the close of the conference proceedings, other than a closing statement (see Appendix) by the president of the conference, Dr. Theo-Ben Gurirab. However, a full report and summary of the debates and presentations should be available in the next few weeks. 3. The Canadian delegation Approximately 250 parliamentarians from some 80 countries took part in the conference, including three Canadian parliamentarians. The Honourable Michel Rivard, Senator represented the Senate and the Honourable Keith Martin, M.P. and Jean-Yves Laforest, M.P. represented the House of Commons. 4. Highlights of the proceedings The current economic and financial crisis is affecting all nations. The conference participants therefore stressed the need for global regulation. A number of parliamentarians, especially those from the least developed nations, emphasized the need to inject more money into the global financial system to stimulate economic growth, with many countries dealing with serious problems involving the balance of payments. Participants said that the International Monetary Fund (IMF) was in need of reform and increased funding. Lastly, the parliamentarians highlighted that the global financial system was in need of anti-cyclical measures. A new global currency based on a new currency basket was also discussed. The first speaker, Jeffrey D. Sachs (Director of the Earth Institute, Columbia University), started his talk by saying that the current crisis originated from a financial situation. It was the result of an expansionary monetary policy, lack of regulation of the financial markets and a system that was generating a succession of speculative bubbles. Mr. Sachs recalled that little had been done in terms of fulfilling the many promises to help the least developed countries. He reiterated the fact that the Millennium Development Goals were very important and stressed that developed countries must live up to their Gleneagles commitments. Lastly, he said that it was important not to create a new speculative bubble while coming out of the crisis. He promoted a green recovery based on massive public investment in green technologies. From the Canadian point of view, discussions on upcoming developments in terms of reforming global economic institutions and the international financial system were among the most interesting aspects of this conference on the global economic crisis. Jan Kregel, Chief Rapporteur, Commission of Experts of the President of the UN General Assembly on the Reform of the International Monetary and Financial System presented the key areas for future reform. The highlights are described below. A new global fund ·The current system does not provide effective mechanisms to mobilize the funds available in countries that have accumulated vast foreign exchange reserves. ·There are many options to complement the use of resources from the fund. First, there is an urgent need to deal with problems related to balancing payments and financing government budgets in order to increase developing countries’ capacities for anti-cyclical fiscal expenditures. ·Second, resources from the fund could be invested in key sectors where emerging economies have a particular interest, such as developing export agriculture in Africa combined with food security in Asia and the Arab countries. ·Another possibility is to use the fund to help developing countries finance export loan guarantees or guarantee the debt of certain companies in order to reassure investors. ·The establishment of this fund must be backed by a new governance structure reflecting new sources of global financing and the need to give more prominence to emerging countries, creditor nations and recipient countries. ·Existing institutions such as the World Bank or the regional development banks could oversee this new fund or it could be established within new institutions. ·The fund could be managed regionally. A new international reserve currency ·The global imbalances that played an important role in the development of the crisis can be eliminated only if the global economic risks related to the current system, which is causing a large accumulation of foreign exchange reserves by some countries, are better managed. ·The magnitude of the crisis and the shortcomings of the international response may motivate even further accumulations, contributing to deflationary pressures, thereby reducing prospects for a robust economic recovery. ·The difficulties of using a national currency as the single international reserve currency are well known. ·There are some solutions within a global foreign exchange reserve system. ·Such a system could be based on an expanded role for the special drawing rights (SDRs), with regular or cyclical emission of these rights according to the size of foreign exchange reserve accumulations. Council for the coordination of global economic policy ·Establishment of a new council at an authority level equivalent to that of the General Assembly and the Security Council. ·This global economic council should meet at least once a year at the Heads-of-Government level to assess developments and provide leadership in dealing with economic, social and environmental issues. ·The council would promote consistent objectives in the policies of key international organizations. ·It would encourage consensus-building among governments on effective solutions for economic and governance issues. ·The council could also promote accountability and responsibility in all international economic organizations, identifying gaps that need to be filled to ensure the efficient operation of the global economic and financial system, while helping to produce a work plan to reform the system. ·The global economic council would be supported in its work by an international panel of experts. ·Representation would be based on a constituency system and all continents and all major economies would be represented. ·International institutions such as the World Bank, the IMF, the World Trade Organization, the International Labour Office and the United Nations Secretariat offices in charge of economic and social issues would provide technical support and participate on the council. ·The global economic council could become a democratic alternative to the current G20. International panel of experts ·It would be desirable to put in place a panel, under the auspices of the United Nations, to independently analyze global economic issues, including social and environmental dimensions. The Intergovernmental Panel on Climate Change could serve as a model. ·The panel’s mandate would be to offer advice to the General Assembly, the Economic and Social Council and the applicable international organizations in order to enhance their capacity to make sound decisions concerning the gaps in the global economic architecture and to assess progress and problems in the functioning of the global economy and social systems. ·The panel’s mandate would include actively promoting constructive dialogue between policymakers, the academic world and the relevant major international organizations. ·The panel should consist of internationally known academics, representing all continents, including representatives of social movements. ·The panel should follow, analyze and assess basic trends, key developments and global change affecting all peoples around the globe, identify problems in the global economic and financial system and provide options for coherent international action, and make recommendations for political decision-making processes. Other institutions ·Mechanism for debt management ·Commission on foreign debt ·International bankruptcy court ·International fiscal cooperation -All countries and jurisdictions must comply with international tax rules. ·International agreements to enhance cooperation and transparency in tax matters should be strengthened, including the United Nations Committee of Experts on International Cooperation in Tax Matters, as proposed in paragraph 16 of the Doha Declaration. The United Nations Committee of Experts on International Cooperation in Tax Matters should be transformed into an intergovernmental body to strengthen its capacity to promote international cooperation in that area. ·A new policy on an oversight mechanism independent of the IMF 5. Participation of the Canadian parliamentarians The three Canadian parliamentarians attended all of the activities on the conference agenda. The Honourable Keith Martin spoke during the question-and-answer session on the conclusions of the G20 in the context of aid development. He received a resounding round of applause for his plea to bolster communications between parliamentarians, which he said would greatly facilitate achieving concrete results in the field. He suggested sharing business cards and communicating by email. He also stressed building networks of core expertise in public health and education. As examples, he spoke of the work by the Democratic Republic of the Congo with war victims as well as the effort of doctors and of the medicine sent to Zimbabwe. Conclusion Well aware of how the economic and financial crisis came about and its impact on the world, it was clear to the Canadian delegation that Canada's economic governance compares favourably to governance in many countries around the world. The delegation observed to what extent Canada’s expertise in economic regulation, macroeconomic policy and fiscal responsibility should be shared. Although the architecture of the global economic and financial system is starting to change dramatically, parliamentarians can play a leading role in disseminating expertise and the Canadian philosophy on economic governance. Respectfully submitted,
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