Tuesday, October 3 2006 11:59 Hrs (IST) - World Time -

United Nations: India has demanded a lead role for the United Nations in giving direction to comprehensive reform of the international financial, monetary and trading systems to end their domination by a few rich countries.

"The democratic deficit in the international financial architecture can only be addressed through a fundamental reform of the quota structure," Nirupam Sen, Permanent Representative of India, told the UN General Assembly yesterday(Oct 2,2006).

Describing it as an absolute necessity for the credibility and legitimacy of international financial institutions, he said the UN should encourage further, effective and time-bound steps for the second stage of IMF quota reform without delay.

Voicing concern at the suspension of the Doha Round of trade negotiations, Sen said many developing countries' problems are not because of inadequate liberalisation or corruption but because developed countries set the agenda and went back on their promises, thereby ensuring that the history of trade negotiations would be a history of broken promises.

Demonstration of political will by developed countries will be required if negotiations are to be saved. A clear political direction to the World Trade Organisation that was not possible in the 2005 World Summit in spite of broad political support remains necessary.

The primacy of development on the global agenda can only be achieved if the UN takes a lead in setting the international economic agenda.

" The problem is the reform of the UN system, the reinstatement of the UN-driven and development oriented approach," Sen said.

What is needed is the UN overseeing the international economic agenda and promoting the reform of international economic institutions through a revitalized General Assembly, a strengthened Economic and Social Council and a reformed Security Council, he said.

In the IMF, the rich countries, in fact a single rich country has virtually a veto, Sen said in an obvious reference to the United States, noting that the most powerful country appoints the head of the World Bank and, with Western Europe, shares the top two posts of the IMF.

Unless developing countries managed to change things lock, stock and barrel, the organisation may pass out of their hands and they would end up as irrelevant spectators without any rights.

For developing countries, the centrepiece is development. Poverty and conflicts are not only the legacy of the colonial past but a result of the structural policies of the international financial institutions, Sen said.

The present international system takes from the poor - net transfers from developing countries continued to rise for the twelfth consecutive year reaching over US$450 billion, he alleged.

Without addressing the development problems faced by the vast majority of UN members, security in its full sense cannot be achieved, Sen said noting that even though aggregate Official Development Assistance (ODA) reached a record high of $106 billion in 2005, only a small fraction of this actually went to support real investments in countries that need them most.

Welcoming the agreement to monitor the fulfilment of commitments made to provide development assistance, he said India backs all initiatives in support of low-income countries.

Citing recent events in Lebanon, Sen said the main problems that beset peacekeeping are not a lack of resources or even personnel, but an un-representative Security Council, which lacks the political will to act and, when it does, does so in a manner that is entirely inadequate.

There is widespread acknowledgement that no UN reform would be complete without the reform of the Security Council. The Security Council must not only be more representative but also more effective, if it is to satisfactorily perform the role mandated to it by the Charter, Sen said.

Turning to terrorism, Sen said the adoption of the United Nations Global Counter-Terrorism Strategy is a step in the right direction. He called for the early finalisation and adoption of a comprehensive convention on international terrorism.

Meanwhile, taking part in a committee debate, C.K. Chandrappan, MP and a member of the Indian delegation, welcomed the proposal for intensifying global development partnership for helping Africa.

"ndia supports greater efforts through the UN system for assisting the efforts of countries in Africa as well as for addressing the special needs of the least developed countries (LDCs), landlocked developing countries and the small island developing countries," he said.