EU Presidency Statement - Globalization and Interdependence

Mr. President,

I have the honor to take the floor on behalf of the European Union. The Candidate Countries Bulgaria, Romania, Turkey and Croatia*, the Countries of the Stabilisation and Association Process and potential candidates Albania, Bosnia and Herzegovina, the Former Yugoslav Republic of Macedonia, Serbia and Montenegro, and the EFTA countries Iceland and Norway members of the European Economic Area, align themselves with this declaration.

No discussion on the important issue of globalisation can be complete without making reference to the recent report of the World Commission on the Social Dimension of Globalisation, established by the International Labour Organisation. This is a comprehensive report on the social dimension of globalisation, produced after a thorough process of consultation with various stakeholders. The EU warmly welcomes this report, and we look forward to contributing to its implementation. Globalisation cannot be complete without the social and equity dimension. It should be inclusive and of benefit to all. This message also permeates the report of the Secretary-General on Globalisation and Interdependence, submitted to the fifty-ninth session.

Centrepiece to the report of the World Commission on the Social Dimension of Globalisation is the focus on people, as well as on human resource development. We share the view of the World Commission, that employment, meaning decent work for all on fair terms, should become a global goal. Employment is the engine of economic growth and the most sustainable means of eradicating poverty and social exclusion. As such, employment is a predominant important objective for all countries in reducing poverty. This conclusion is echoed in the report of the Secretary-General. The Millennium Declaration, the Monterrey Consensus, the Plan of Implementation of the World Summit on Sustainable Development ("Johannesburg Plan of Implementation") and the outcomes of other conferences, especially Copenhagen, have addressed these dimensions of development and the challenges of globalization. Cross-cutting priority issues to strengthen the social dimension of globalization should include: sustainable growth, investment, employment and poverty reduction, gender equality, the integration of the informal economy into the economic mainstream, good governance, the promotion of core labour standards, education and improving prospects for young people. Both reports also discuss many policy domains related to globalisation and covered by different parts of the multilateral system such as trade, investment, capital flows in a holistic approach.

Mr. President,

It is evident that economic development is proceeding rapidly in much of the developing world. Progress is made most notably in China, India, and other parts of Asia. Large parts of the developing world, however, and most importantly sub-Saharan Africa, have not benefitted from globalisation. With 1.2 billion people forced to survive on less than 1 dollar per day, world poverty remains a daunting challenge for us all. If current trends of 30% of the global population living in poverty continue, the number of people living in poverty by the year 2015 will rise to 1.9 billion.


* Croatia continues to be part of the Stabilisation and Association Process

The process of globalisation is often accused of making matters worse: growing poverty and inequality, inequality among regions of the world, among nations within regions, and among social groups within countries. However, the main issue is how to make good use of globalisation; of the benefits of economic interaction and technological progress in a way that pays adequate attention to the interests of the deprived. Globalisation is not a process that can be stopped: it is here to stay, and it has to be managed. Globalization will be successful for all, if it is based on the application of global social standards.

Mr. President,

While the benefits of globalisation are undisputed, the issue of inequality relates centrally to the disputes over globalization. The crucial question is sharing of the potential gains from globalization, between countries, and between different groups within a country. Going beyond that recognition, it is important to try to make sure that the poor and the deprived actually get what they need. This calls for policy reform, for institutional development, and for global cooperation in bringing about the necessary changes. It calls for the implementation of the Monterrey Consensus. That consensus encourages low-income countries to pursue sound policies and good governance, and the international community to provide more and better aid.

We all know that poverty is no longer inevitable. Yet more than a billion people (one-third of them in Africa) live in absolute poverty, most of them without clean water to drink or enough food to eat, beset by diseases from HIV/AIDS to tuberculosis, lacking access to schools and healthcare, and living in an environment that by nearly every measure is rapidly degrading. Nearly one in every six African children die before age five - unchanged from a decade ago. Overall primary enrolment is still below 60%, and on other indicators too the news is grim.

But those trends can be changed. It does not have to be this way. We have the global means, the know-how and the record of development success in some countries in Africa and elsewhere, to state categorically that if today Africa and the world make the commitment of will and resources, then we should be able to reach the Millennium Development Goals of halving poverty, removing hunger, putting every boy and girl in school and stemming the crisis in our health and environment.

How do we make the success stories not the exception but the rule? How can we make sure Africa and other parts of the developing world join in the circle of prosperity? The primary responsibility for making this happen clearly lies with the developing countries themselves through a commitment to policy reform and prioritising social needs. Formulas of good governance and open markets are necessary - but not enough. Regarding trade, we should highlight the fact that countries that have successfully integrated into the world economy have followed different approaches and also adopted a range of complementary policies. It is unambiguous however, that the integration into the world economy and access to external markets were of benefit to all those countries.

But making the MDGs a reality also requires making progress in the implementation of the Monterrey consensus, including on trade and debt relief, helping developing countries to participate fully in international trade and help them to devote more of their own scarce resources to development priorities. The EU is committed to this, as we have stated on several occasions.

Mr. President,

It has often been underscored that market incentives for resource allocation, openness and macro economic stability are important for growth and globalisation. However, the lessons learned in the 1990s also highlight the diverse ways in which these principles can be translated into concrete policy choices. It requires recognizing the importance of country ownership and taking into account country specificities. It requires more economic and social analysis and rigor than formulae-based approach to policy making. Because as the former Secretary General of UNCTAD Ricupero recently said in a lecture, it would be simplistic to reduce globalisation to its economic dimension - we need to understand better the non-economic factors in growth processes, such as history, culture and politics. These issues should be integrated in the analysis, strategic and operational work.

Equally, let us not forget that the process of globalisation has also a considerable human rights dimension. Inevitable changes in the system of international division of labour, the use of human capital, reallocation of resources at broad scale could affect also human rights of individuals and whole communities. The EU as firm defender of human rights stands for taking fully into account also this aspect when trying to identify adequate solutions.

In his lecture on Globalization and Poverty, Nobel Prize winner economist Amartya Sen once stated the following: "Globalisation has a rich past and a promising future, but the form of contemporary globalisation, with the spread of global markets, generates difficult challenges even as it creates remarkable opportunities The strength of its future is contingent on our willingness to carry through the institutional reforms that can make its reach more equitable and fair. The effects of globalisation are not automatic: they depend on our interest and understanding, and ultimately, on our will. We have to rise to that challenge."

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