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DE RUEHGV #0030/01 0151255
ZNR UUUUU ZZH
R 151254Z JAN 10  (TAO)
FM USMISSION GENEVA
TO RUCNDT/USMISSION USUN NEW YORK 0001
RUEHC/SECSTATE WASHDC 0004
INFO RUEHGV/USMISSION GENEVA

UNCLAS GENEVA 000030 
 
SIPDIS 
DEPT FOR IO/EDA AND EB/OMA 
USAID FOR OFDA AND ODP 
 
E.O. 12958: N/A 
TAGS: EAID UN ECOSOC
SUBJECT: UNRISD- IMPLICATIONS OF GLOBAL CRISIS ON DEVELOPING 
COUNTRIES 
 
REF: GENEVA 927 
 
¶1. SUMMARY:  The UN Research Institute for Social Development 
(UNRISD) held a forum November 12-13 on "Social and Political 
Dimensions of the Global Crisis: Implications for developing 
countries." The forum consisted of five sessions and 24 
presentations by representatives from UNDP, ILO, CoopAfrica, 
UNICEF, World Institute for Development Economics Research of the 
United Nations University (UNU-WIDER), and 19 research centers, 
institutes, and universities.  In addition to identifying the 
underlying social and political aspects to the global crisis, 
speakers examined the cause of the crisis in terms of neoliberal 
ideologies, which was defined as the reduction of state or 
government intervention in economic and social activities. 
Speakers concurred on the need for a policy reformation process. 
END SUMMARY. 
 
 
 
---------------------------- 
 
UNRISD - Background 
 
---------------------------- 
 
 
 
¶2.  The UN Research Institute for Social Development (UNRISD) was 
created in 1963 as part of the United Nations' comprehensive 
approach to development, which sought the inclusion of non-economic 
factors of development in research. UNRISD is the only UN 
organization that engages exclusively in research on social 
development.  The Institute conducts comparative research in 
collaboration with scholars and activists, primarily in the 
developing world, many of whose ideas are not generally reflected 
in current debates.  Strong ties to the global research community 
and its proximity to the UN system help UNRISD to carry out 
policy-relevant research on issues of social development. 
 
 
 
¶3.  The UNRISD research initiative aims to contribute to debates on 
new policy approaches to poverty reduction by: 
 
-- Assessing contemporary approaches to poverty reduction, 
including the Millennium Development Goals (MDGs) and Poverty 
Reduction Strategy Papers (PRSPs); 
 
-- Identifying key institutional, policy and political issues not 
being addressed in current poverty reduction strategies; 
 
-- Examining contradictions, complementarities and synergies 
between components of policy regimes, including social, labor 
market and macroeconomic policies, and political and regulatory 
institutions. 
 
 
 
¶4. UNRISD research conducted on social policy in a development 
context from 2000-2005 concluded that poverty eradication is always 
embedded in social and development policy but that effective social 
policy must also address issues of redistribution, production, 
protection and reproduction of goods; and that policies related to 
each of these aspects must work synergistically to promote 
inclusive and equitable development. 
 
 
 
--------------------------------- 
 
Dimensions of the Global Crisis 
 
--------------------------------- 
 
 
 
¶5.  Participants at the forum agreed that the global financial 
crisis is one that was preceded by, and is concurrent with, several 
other global crises, such as the growth in greenhouse gas 
emissions, climate change, and food shortages propelled by 
inflation in global food prices.  Professors from the University of 
South Florida argued that there are two more crises: an unworkable 
paradigm rooted in global financial markets, and a political crisis 
due to poor policy conflict-management. 
 
 
¶6.  According to UNU-WIDER's presentation on the Global Aid 
Architecture and the Triple Crisis (financial crisis, food 
shortage, climate change), developing countries are affected by the 
financial crisis via lower commodity prices, reduced private 
financial flows, and falling remittances.  In Asian countries such 
as Cambodia, China, Indonesia, Lao PDR, and Vietnam, women are more 
likely to work in insecure jobs and sectors that are especially 
exposed to the crisis.  Yet, presenters argued that stimulus 
packages pay insufficient attention to mitigating the impact of 
crises on vulnerable women. 
 
 
 
------------------------------------------- 
 
Implications of the Global Financial Crisis 
 
------------------------------------------- 
 
 
 
¶7.  According to Professor Ben Fine of the School of Oriental and 
African Studies in the United Kingdom, the financial crisis was 
largely due to global imbalances caused by the United States' 
financial bubble and Chinese current account surpluses.  Several 
speakers concluded that the financial crisis has necessitated a 
reevaluation of orthodox policies based on free market principles, 
which is underpinned by "financialization."  Professor Fine defines 
"financialization" as the increasing role of financial motives, 
markets, actors, and institutions in the operation of domestic and 
international economies. 
 
 
 
¶8.  Manuel Riesco of Centro de Estudios Nacionales de Desarollo 
Alternativo (CENDA), a national research center in development 
alternatives in Chile, concluded that the financial crisis has 
 
(i) retrenched the financial sector and its global political power 
prompting the fall of neoliberalism; 
 
(ii) discarded utopian ideas about the long-term stability and 
profitability of financial markets, and the solvency of private 
providers as substitute providers of public universal social 
services; and, 
 
(iii) re-asserted the historical unity between modern markets and 
states, specifically regarding public expenditures and the need to 
protect and regulate markets within spaces of national or shared 
sovereignty. 
 
Moreover, he thinks the financial crisis has provided an 
opportunity to create a new progressive, inclusive, and 
developmental policy paradigm in the North and South. 
 
 
 
------------------- 
 
New Opportunities 
 
------------------- 
 
 
 
¶9.  According to most presenters, the financial crisis had provided 
the opportunity to develop new policies based on principles of a 
more regulated yet mixed economy.  Fine concluded that de-centered, 
regional solutions are optimal and that regionalism will be a key 
element to social reforming international institutions like the 
World Bank and IMF.  Solutions range from the Green New Deal, an 
economy based on environmentally-friendly concepts as an economic 
recovery strategy.  Other presenters suggested that the crisis 
calls for a revival of Keynesian policies, which requires active 
policy responses by the public sector and some regulation of the 
business sector. Others proposed the developmental welfare-state as 
an avenue for social and economic progress. 
 
 
 
COMMENT 
 
--------------- 
 
¶10.   Predictably, there was no consensus reached by the conclusion 
of the forum as to what would be the best strategy for global 
economic recovery.  There was however, a common assumption that the 
 
 
global economy would not recover for another five to ten years if 
neoliberal ideologies persist.  The forum emphasized that "business 
as usual" in terms of economic policymaking at a global governance 
and national policymaking level needs to end, that blaming the 
United States as the sole contributor to the global crisis would 
not lead to a comprehensive recovery, and that regulatory change is 
needed.  The discussion was constructive although it did not 
provide any specific policy recommendations besides a general 
agreement among participants that greater government intervention 
in economics is beneficial and necessary. 
GRIFFITHS