Letters
Author: Johan Kaufmann

For the latest thinking about the international financial system, monetary policy, economic development, poverty reduction, and other critical issues, subscribe to Finance & Development (F&D). This lively quarterly magazine brings you in-depth analyses of these and other subjects by the IMF’s own staff as well as by prominent international experts. Articles are written for lay readers who want to enrich their understanding of the workings of the global economy and the policies and activities of the IMF.

Abstract

For the latest thinking about the international financial system, monetary policy, economic development, poverty reduction, and other critical issues, subscribe to Finance & Development (F&D). This lively quarterly magazine brings you in-depth analyses of these and other subjects by the IMF’s own staff as well as by prominent international experts. Articles are written for lay readers who want to enrich their understanding of the workings of the global economy and the policies and activities of the IMF.

The Road After Rio

I read with much interest “The Road From Rio,” by Andrew Steer (Finance & Development, September 1992). The results of the UN Conference on Environment and Development (UNCED) have been judged in optimistic or pessimistic tones, depending on the pre-conference level of expectations. It is clear that even after Rio, the same vicious circles exist:

• In developing countries, illiteracy, too rapid population growth, poor health conditions, malnutrition, and inadequate use of human resources are mutually reinforcing negative factors.

• In developed countries, insufficient recognition of the impact of their own welfare in developing countries continues to play havoc with the good intentions expressed in Rio.

In the light of previous world conferences on such subjects as population, famine, and housing, it must be sadly concluded that without real commitments, especially financial, the “world conference method” is relatively inefficient. What should be done? A comprehensive set of measures, divorced as much as possible from political pressure and media attention, can offer hope for effective action. Specifically:

1. There should be an urgent negotiation to provide the necessary resources for a minimal program in the Third World, leading to “sustainable development.” Rio once more made it clear that the formula to allocate 0.7 percent of a developed country’s GNP for this purpose cannot be translated into firm commitments. There should, therefore, be agreement in principle, followed by detailed negotiation, on some form of “automatic taxation,” for example, on arms transfers, telecommunications, or in some other form. The World Bank could be charged with calculating the total amount needed to assure a minimum of “sustainable development.”

2. The UN Security Council should be allowed (without amending the UN Charter) to consider environmental and economic crises as threats to the peace under Article 39 of the UN Charter. Since alone among the international structures, the Security Council has the right to take measures binding upon nations, there would be a glimmer of hope that the present situation of nondecision making and delaying action would be replaced by real action.

Without some action along the lines sketched, the “clock of mankind” may be ticking toward a fatal hour from which there is no return!

Johan Kaufmann Former Netherlands Ambassador to the United Nations The Hague

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Finance & Development, December 1993
Author: International Monetary Fund. External Relations Dept.