The role of the 192-member United Nations was stressed Thursday as economists and diplomats discussed ways to tackle the global financial crisis at the General Assembly.
"Solutions must involve all countries in a democratic process," UN General Assembly President Miguel d'Escoto Brockmann d'Escoto told the opening of the one-day panel discussion. "Our economies are global and interdependent but the global financial architecture does not correspond to this reality."
"It is time to stop viewing the global economy as the private dominion of some exclusive clubs," he said. "The G-8, G-15, G-20 are no longer sufficient in their scope to solve these problems."
A G-20 summit has been scheduled to take place in Washington on Nov. 15. Leaders from the G-8 industrialized countries, major emerging economies such as Brazil, China and India, and from the United Nations and the European Union are expected to be present.
"Only full participation within a truly representative framework will restore the confidence of citizens in our governments and financial institutions," d'Escoto said. Nobel economics laureate Joseph Stiglitz of the United States, who has been named by d'Escoto to head a UN task force on the issue, also stressed the role of the world body.
"While discussions among informal groupings of countries will necessarily play an important role in developing a global consensus on key and complex issues, decision making must reside within international institutions with broad political legitimacy, and with adequate representation of both middle income countries and the least developed countries," Stiglitz said.
"The only institution that currently has that broad legitimacy today is the UN," he said, noting that the UN has played a central role in convening the 1944 "United Nations' Monetary and Financial Conference" at Bretton Woods, of New Hampshire, the United States, which established the Bretton Woods Institutions.
"But the world has changed a great deal since that conference 64 years ago," Stiglitz said. "We are now at another 'Bretton Woods' moment."
In addressing the current global financial crisis, Stiglitz urged the "advanced industrial countries" to be sensitive to the inherent asymmetries in the economic positions of developing and developed countries and to the fact that similar policies adopted in developed and developing countries can have markedly different effects.
"Government guarantees provided by developing countries may not have the credibility that those provided by developed countries have, inducing major flows of funds from developing to developed countries," he said.
Stiglitz said all countries, especially the developed ones where the crisis originated, need to "give immediate consideration" to reforming their regulatory structures.
"Self-regulation will clearly not suffice. Nor will stronger transparency and disclosure standards," he stressed. "The creation of a global financial regulator should be urgently studied; this would imply coordinated regulation of all financial centres, including offshore ones."
Sakiko Fukuda-Parr, a Japanese development economist who teaches international affairs at the New School University, also stressed the need for a global response to the financial woes.
"Threats to human security stem from global financial and economic instability, risks that go beyond what any country -- and household -- can do," she said. "The current system shifts the burden of risk of global finance from players in global financial markets to poor countries and poor households."
"In this context, human security cannot be assured by national policies alone," stressed Fukuda-Parr, who was lead author and director of the United Nations Development Program Human Development Reports.
Prabhat Patnaik, an Indian economist and political commentator, said the "need of the hour" is not just the injection of liquidity into the world economy but also the injection of demand.
"This can occur only through direct fiscal action by governments across the world," he said, suggesting the control of cross-border financial flows and the establishment of an international financial facility operating on "principles different from the existing multilateral institutions."