Pakistan calls for revamping global financial system


NEW YORK: Pakistan Friday called for the early restructuring of the international financial system so that it may better serve the needs of developing countries and reduce its vulnerability to financial crisis in the future.
“I would like to emphasize that solutions to global problems are based upon open, inclusive and transparent processes,” Senate Chairman Farooq H Naek said during the annual parliamentary hearing held at UN Headquarters in New York.
He also expressed his desire that the UN General Assembly must establish a body to look into the external debt of developing countries and the debt resolution mechanisms in place. Any comprehensive examination will have to take into account the multiple dimensions of debt sustainability and how to preserve the interest of poorer countries, he opined.
“A global, comprehensive and durable solution to the external debt problems of all developing countries must be tabled to free up meager resources for socio-economic development,” the chief delegate of the Pakistani delegation emphasised.
Jointly organised by the UN and the Inter-Parliamentary Union (IPU), the annual parliamentary hearing provides a forum for interaction between members of parliament and high-ranking UN officials, representatives of member states and experts drawn from think-tanks and civil society organisations.
The main theme of the 2010 is to cultivate fresh thinking on the issues of economic recovery, development and global governance. Naek called for assigning the United Nations a central role any proposal to redraw the international financial system. He stressed his belief that UN involvement would ensure global participation and legitimacy and satisfy the inherent need for equity and strike a balance between the role of governments, markets and civil society.
“Reform will ensure sustainable development and serve the respective interests of all member states, particularly those of the developing world,” he said. Naek was also adamant that any such effort must ensure the developing countries achieve the millennium development goals prescribed by the UN and better inbuilt capacity to respond to and prevent financial and economic emergencies.
Any reform process would be undone if the transparency of risk-rating mechanisms was not enhanced, he added. “It is important that all efforts aimed at strengthening financial regulation and standards should take into account domestic circumstances and capacity of local financial markets in developing countries.”
“Volatile capital flows, however cause severe difficulties, particularly to developing countries,” Naek insisted. “We are, therefore, of the view that capital flows cannot be left entirely and exclusively at the mercy of market forces; there are times when a state, however reluctant, has to intervene.”
During the hearing, Farooq Naek said Pakistan supports a truly effective and representative framework for addressing global economic challenges. He urged the institution of a dialogue within the US towards the fostering of inclusive, accountable and transparent decision-making.
He claimed that Pakistan puts its weight behind the establishment of an economic coordination council to address areas of concern in the operation of the global economic system, governance reform, accountability and transparency in Bretton Wood institutions and other non-representative financial institutions, he observed.