13 October 2009
Statement by Mr. Mohammad Hassani Nejad
Representative of the Islamic Republic of Iran on agenda item 53: “Macroeconomic Policy Questions”
at the Second Committee of the 64th Session of the UNGA
(New York, 13 October 2009)
In the Name of God the Compassionate the Merciful
1- I would like to associate myself, at the beginning, with the statement made by the distinguished representative of Sudan on behalf of the G77 and China.
2- We are not out of the woods yet and despite signs of recovery in big economies, significant uncertainties persist. The stimulus packages have had positive impact on picking the demands up and on fueling relatively good economic performances. However, in case of an unacceptable growth in job creation and rise in private investment demand, there always would be a possibility for the world economy to face a double-dip after the effects of the stimulus packages fade out. Once again, we call for the root causes of the crisis and persisting systemic imbalances to be effectively addressed as asked for by the report of the SG (A/64/178).
3- Though one size does not fit all, it sounds quite strange that for countries facing the same crisis, still two opposite set of recommendations being prescribed by the IMF: countercyclical for the rich and pro-cyclical for the others. We note with concern the finding of the report of the SG that IMF is still prescribing pro-cyclical policies that can unnecessarily exacerbate economic downturns.
4- It is true that every country has the primary responsibility for its own development, however, this fact does not cover up the more important fact that the donors are far behind their commitments regarding international development.
5- My delegation reiterates its position regarding the unacceptable tendency in G20 to make instructions and to issue mandates with direct effect beyond its constituency. In a related subject it is our understanding that a shift in International Monetary Fund (IMF) quota share of at least 5% will be done in a way that all developing countries from top to bottom benefit from it, otherwise it is only transformation of illegitimacy and ineffectiveness from one level to another.
6- On the issue of commodities, we as UNCTAD report notices are on the view that the recent boom and bust of commodity prices can not be explained by market fundamentals but by excessive speculative moves in their trade. The lax supervision as well as regulation in major financial centers, as the mediums for their trade and pricing, allowed greedy players manipulate the market fundamentals. The disturbances and high fluctuations in world commodity prices have seriously affected stability in designing and performing development programs of so many countries. It further exacerbated the food crisis and endangered the achievements of many developing countries in the area of poverty reduction.
7- Many resource based economies have fallen victim to a crisis they had nothing to do with its creation. They felt the double suffering of the boom and bust of commodity prices: spending most of their extra revenues on importing other skyrocketed commodities during the first part, and losing a significant portion of their income for the second part. More importantly, the crisis hit these countries severely by depriving them from the much needed steadiness and predictability in the field of adopting national economic development strategies. We therefore, reiterate the urgent need for dealing with the true reasons behind such turbulences before they find the chance to hit back again. In this context we welcome the ideas of comprehensive data reporting system and cooperative arrangements between commodity producers and users, though we think they would be only sufficient if be supported by a well designed and performed regulatory mechanism.
Thank You Mr. Chairman.