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UNCLAS STATE 050892 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: EAID ECON EFIN UNGA
SUBJECT: DEMARCHE ON UN CONFERENCE ON DEVELOPMENT IMPACT 
OF CRISIS 
 
¶1. (U) This is an action request.  Please see paragraph 
three. 
 
¶2. (SBU) Summary.  United Nations (UN) member states are 
preparing to participate in the June 1-3 UN "Conference on 
the World Financial and Economic Crisis and its Impact on 
Development" to be presided over by the President of the 
General Assembly (PGA), Miguel D'Escoto Brockman of 
Nicaragua.  Through his public comments on the conference, 
and the release of a strident and unbalanced first draft 
of a conference outcome document, the PGA injected his 
personal economic views into the conference preparation 
process, which threatens to divert the focus of the 
conference.  Rather than being a forum for member states 
to discuss the impact of the financial crisis on 
developing countries, the PGA is attempting to turn the 
conference into a debate on expanding the UN's role on the 
international economic stage.  The conference is far too 
important to be sidetracked and Washington requests 
addressee posts to solicit support for a productive 
conference that brings nations closer together.  There is 
often a disconnect between economic ministries in capitals 
and the UN missions in New York, so the Department 
requests addressee posts to demarche senior officials in 
the finance, economic, and development ministries, as 
appropriate, in addition to foreign affairs personnel to 
encourage their direct engagement on this issue.  End 
Summary. 
 
ACTION REQUEST 
- - - - - - - - 
 
¶3. (SBU) We ask addressee posts (in G20 and key G77 
countries) to solicit support for a productive conference 
based on constructive engagement by demarching the 
finance, economic, development and foreign affairs 
ministries, as appropriate, to encourage their direct 
engagement with their UN representative officials. 
 
BACKGROUND 
- - - - - - 
 
¶4. (SBU) At last December's Financing for Development 
Conference in Doha, Qatar, participants agreed that the UN 
General Assembly (UNGA) would hold a conference on the 
World Financial and Economic Crisis and its Impact on 
Development.  Member states in New York subsequently 
agreed that the conference would focus on the present and 
future impact of the crisis on employment, trade, 
investment and development in the developing world and the 
need for coordinated and collaborative actions to mitigate 
the impact of the economic downturn on development.  They 
agreed to emphasize the role of the United Nations and its 
member states in the ongoing international discussions on 
reforming and strengthening the international financial 
and economic system and architecture.  The United States 
believes the Conference will be an important opportunity 
to share information and give voice to developing 
countries, particularly smaller nations that have not yet 
had an international platform to express their views.  It 
also affords the opportunity to increase awareness of the 
effects of the crisis on specific countries. 
 
¶5. (SBU) The PGA released a draft outcome document for the 
conference on May 8 that the U.S. and many other countries 
have rejected as a starting point for negotiations.  It 
was drafted without regard for the modalities agreed upon 
for the conference and disregarded a shorter text by the 
conference co-facilitators from The Netherlands and St. 
Vincent and the Grenadines. The PGA draft references the 
establishment of nine new UN bodies in economic or 
financial areas; intrudes on policy prerogatives, 
operations or authorities of the IMF and World Bank; 
exerts authority over domestic financial market 
regulation; and prejudges the outcome of negotiations in 
other fora on trade, debt and economic issues over which 
the UNGA has no jurisdiction.  The EU, Canada, Australia, 
and New Zealand have objected in writing to the process by 
which the PGA's office created the document, and up to 
this point, have declined to be drawn into efforts to 
merge the PGA's draft with the eight-page draft the 
co-facilitators created.  Other developed countries are 
unanimous in their opposition to the PGA's draft which is 
severely unbalanced and features a strident tone 
inappropriate for a diplomatic agreement.  The full text 
of the PGA's draft is available at the following link:  ( 
http://www.un.org/ga/president/63/ interactive/financialcris 
is/outcomedoc.pdf). 
 
¶6. (SBU) If passed, the current draft of the outcome 
document would not be legally binding but it could 
negatively impact the UN's work going forward by further 
discrediting the UN as a forum for serious and 
constructive discussions of economic and development 
issues, straining relations with other international 
organizations, and making it more difficult to make 
progress on other important issues.  The PGA's draft 
proposes a continuing technical and ministerial process to 
implement the document (under the direction of the current 
PGA) beyond the completion of his term of office.  This 
would likely ensure a full menu of contentious 
negotiations for some period of time, complicating efforts 
to make progress in the UN on other development issues. 
 
¶7. (SBU) At its April 2 meeting in London, the leaders of 
the G20 pledged to promote economic recovery, repair the 
financial system, strengthen financial regulation, and 
reform our international financial institutions.  To this 
end, they established a new Financial Stability Board 
(FSB), as successor to the Financial Stability Forum 
(FSF), whose mandate is to promote international financial 
stability through enhanced information exchange and 
international cooperation in financial market supervision 
and monitoring. The FSB expands on the membership of its 
predecessor organization and includes the original member 
states of the FSF, plus the G20, Spain and the European 
Commission.  The leaders of the G20 also committed to 
expanding voice and representation in the IMF and the 
World Bank and pledged USD 1.1 trillion to restore credit, 
growth, and jobs in the world economy.  Given the decisive 
action taken by the G20, in the areas of financial and 
regulatory reform, as well as reform of the international 
financial institutions. UNGA should avoid proposing 
confusing alternatives of its own, many of which address 
the same points already tackled by world leaders. 
 
OBJECTIVES 
- - - - - - 
 
¶8. (SBU) The objectives of this demarche are to: 
 
--Ensure the conference continues as scheduled and 
focuses, as previously agreed, on the development impact 
of the economic crisis. 
 
--Engage economic and financial experts on the importance 
of ensuring that the important financial stabilization and 
economic recovery efforts of the G20 process remain on 
track.  We believe that economic policy makers in 
addressee countries likely share this goal and it is 
important that decisions regarding the content of the 
draft outcome document and the dialogue at the conference 
reflect countries' economic policies as set out by 
political leaders rather than the personal and less 
comprehensive views of officials posted to the UN in New 
York. 
 
--Prevent the UN General Assembly from miring itself in a 
debate over its potential role as a body for international 
regulation and oversight. 
 
NON PAPER 
- - - - - 
 
¶9. (SBU) Key messages for all action posts:  (Note:  Posts 
may leave these points with host countries as a 
non-paper). 
 
--We look forward to an informative and constructive 
United Nations Conference on the World Financial and 
Economic Crisis and its Impact on Development, June 1-3, 
2009 in New York.  The conference represents an important 
forum for developing countries to give voice to their 
concerns and to raise awareness and understanding of the 
effects of the global economic downturn.  It is also an 
opportunity for all member states to share information on 
responses, both national and international, that are 
underway to help mitigate the impact of the crisis and 
preserve development gains. 
 
--At the June conference, we would like to join other 
member states in reaffirming our commitment to development 
and where we can, together, demonstrate the steps that are 
being taken to help ameliorate the effects of the 
financial and economic crisis on the developing world, 
particularly among the poorest and most vulnerable. 
 
--We and many other member states have stated that the 
draft outcome document distributed by the President of the 
General Assembly (PGA) on May 8 is not an acceptable 
starting point for reaching consensus.  The manner in 
which this document was drafted and released violated 
explicit understandings between member states on the 
conference preparation process agreed upon in New York in 
March 2009. 
 
--We would like to see an outcome document that reflects a 
consensus.  The PGA's draft could only be adopted by a 
divisive vote.  An outcome from the conference that does 
not enjoy consensus would badly discredit the UN and its 
ability to bring states together on economic and 
development issues, particularly during times of crisis 
 
--We hope that member states can return soon to the 
focused and intergovernmental negotiating process we all 
agreed to in the modalities resolution. 
 
--Given the importance of the issues that will be 
discussed at the conference, we encourage the involvement 
of appropriate financial and economic as well as foreign 
affairs officials from member states.  Our hope is that 
these officials can advise their governments to support a 
constructive outcome reflecting the work underway in other 
fora. 
 
¶10. (U) Washington points of contact are Daniela Ballard 
(IO/EDA) or Katherine "Kemy" Monahan (EEB/IFD/ODF).  Posts 
should contact these officers directly with time-sensitive 
updates or for additional information.  Demarche reports 
would be most useful if received by May 22.  Please slug 
cables for IO/EDA/DBallard and EEB/IFD/ODF/KEMonahan. 
CLINTON