Proposal for Sovereign Debt Restructuring Framework among 6 Draft Texts Approved by Second Committee
37th Meeting (PM)
The General Assembly would decide to establish an ad hoc committee to elaborate a multilateral legal framework for sovereign debt restructuring processes, according to the terms of one of six draft resolutions approved today by the Second Committee (Economic and Financial).
By other terms of that text, titled “Modalities for the implementation of resolution 68/304, entitled “Towards the establishment of a multilateral legal framework for sovereign debt restructuring processes”, the Assembly would invite relevant stakeholders to make contributions to the work entrusted to the ad hoc committee, in accordance with the established practices of the United Nations. The Committee approved the text by a recorded vote of 128 in favour to 16 against with 34 abstentions.
The representative of Argentina, speaking before the vote, said that if sovereign debt crises were not addressed, other crises would follow. Accordingly, there was a need to establish a multilateral framework for the establishment of debt restructuring processes.
Also speaking before the vote, the representative of the United States was obliged to vote “no” on the draft resolution as there was ongoing work on the technically complex issue in such bodies as the International Monetary Fund (IMF), which were more appropriate venues.
Speaking after the vote on behalf of the European Union, Italy’s delegate said that today’s action was on a draft that was “very close” to the original submitted. That made it impossible to continue to support the process. Further, IMF was the primary forum to discuss sovereign debt restructuring.
The Committee then approved, with a recorded vote of 128 in favour to 4 against (Israel, Japan, United States, Canada) with 46 abstentions, a draft resolution titled “External debt sustainability and development”. By terms of the draft, the Assembly would emphasize the importance of a timely, effective, comprehensive and durable solution to the debt problems of developing countries to promote their economic growth and development. Further, the Assembly would decide to include the sub-item entitled “External debt sustainability and development” in the provisional agenda of its seventieth session, under the item entitled “Macroeconomic policy questions”.
The Committee also approved another draft resolution, titled “Harmony with Nature”. By the terms of that text, the Assembly would call for holistic and integrated approaches to sustainable development that would guide humanity to live in harmony with nature and lead to efforts to restore the health and integrity of the Earth’s ecosystems. Further, the text invited States to further build up a knowledge network to advance a holistic conceptualization for new approaches, such as living well in balance and harmony with Mother Earth. Among other items, the text also invited States to promote harmony with Mother Earth, as found in indigenous cultures, and learn from them.
The representative of Bolivia, speaking after the draft’s approval, recalled that the model of sustainable development in harmony with nature was one of the pillars of her country’s development. Only holistic approaches towards sustainable development would guide mankind to ensure the well-being of the planet and its people.
The Committee also approved, without a vote, three draft resolutions entitled “International Decade for Action, ‘Water for Life’, 2005-2015, and further efforts to achieve the sustainable development of water resources”, “Follow-up to and Implementation of the Mauritius Strategy for the Further Implementation of the Programme of Action for the Sustainable Development of Small Island Developing States”, and “International migration and development”.
The Committee also concluded its consideration of the draft resolution titled “International Year of Camelids, 2016” without taking action.
Also speaking today were representatives of Tajikistan, Uzbekistan, India, Egypt, Sudan, Ecuador, Japan, Chile, Mexico, Australia, Singapore, Colombia, Jamaica, Samoa, Canada and Poland, as well as the Permanent Representative of the Delegation of the European Union.
The Committee’s work had been extended until 11 December, and it will meet again at a date and time to be announced.
At the outset of the meeting, the Committee resumed consideration of the agenda item on “Culture and sustainable development”. Speaking to the matter, the representative of Bolivia said that, on 13 November, informal consultations had been held on the draft resolution entitled “International Year of Camelids, 2016” (document A/C.2/69/L.41). Several delegations had requested further information on draft. As some of those questions could not be answered at present, she asked that action not be taken. In light of the statement, the Committee concluded its consideration of the matter without taking action.
The representative of Tajikistan then introduced a draft entitled “International Decade for Action, ‘Water for Life’, 2005-2015, and further efforts to achieve the sustainable development of water resources” (document A/C.2/69/L.12.Rev.1). As the document had been submitted that same morning, the Committee agreed to waive the relevant provision of rule 120 of the rules and procedure of the General Assembly.
The representative of Uzbekistan, explaining his position, said that the draft was based on previous General Assembly resolutions with which his country did not agree and thus would not take part in the vote.
The Chair then stated that the draft had no budget implications and the text was approved without a vote as orally corrected.
The Committee then turned to the cluster on “External debt sustainability and development” for action on two draft resolutions submitted under that agenda item. The first, entitled “Modalities for the implementation of resolution 68/304, entitled ‘Towards the establishment of a multilateral legal framework for sovereign debt restructuring processes’” (document A/C.2/69/L.4/Rev.1) was considered with its “Programme Budget Implications” contained in document A/C.2/69/L.59.
The representative of Bolivia, speaking as Chair of the “Group of 77” developing countries and China, said the Group had been calling for and presenting proposals towards establishing a legal framework for sovereign debt restructuring processes for the last decade. The draft resolution under consideration today established clear modalities for the implementation of Assembly resolution 68/304. He called on all delegations to support the draft, and regardless of the position taken by each delegation, invited all Member States and interested stakeholders to participate in the spirit of compromise.
The representative of Argentina then said the action of vulture funds could be viewed as the marginal action of handful of leaders, but could also be seen as a possible trend for financial capitalism on the basis of total deregulation. That would condemn the international financial architecture. If sovereign debt crises were not addressed, other crises would follow. She said that there would be an important debate next year in accord with operative paragraph 1 of the draft about to be approved. All agreed that there was an acute need to establish a multilateral framework for the establishment of debt restructuring processes.
The representative of India said the General Assembly had long called for more structured work on sovereign debt restructuring processes. He hoped the Assembly would make use of the forthcoming discussions and contribute meaningfully to address the issue.
The representative of Egypt said the international community must create a multilateral legal framework for sovereign debt restructuring processes. Furthermore, the issue had been discussed by the Assembly in September, and the majority of States had wanted to create a multilateral legal framework. Therefore, he had voted in favour of the draft text.
The representative of Sudan said his delegation supported the draft resolution towards the establishment of a multilateral legal framework for sovereign debt restructuring processes. Further, he said, the establishment of such a framework would provide developing countries the opportunity to enhance financing for development at the international level and would prevent conflicts.
The representative of the United States said that access to functioning debt markets was essential to expanding capacity for developing countries. Therefore, it was with regret that her country was obliged to vote “no” on the draft resolution. At a time when there was concern for how the Organization used its resources, establishing a multilateral framework at the United Nations would be duplicative of ongoing work on the technically complex issue in such bodies as the International Monetary Fund (IMF), which were more appropriate venues.
The Committee then took a recorded vote with 128 in favour to 16 against, with 34 abstentions. Thus, the draft resolution was approved.
Speaking in explanation of vote after the vote, the representative of Ecuador said that it was unfortunate that the resolution had not been approved by consensus. However, the majority had spoken clearly.
The representative of Italy, speaking for the Delegation of the European Union, said that the fact that the Union’s proposals had been rejected and that today’s action was on a draft that was “very close” to the original submitted made it impossible to support the process further. She said that the International Monetary Fund was the primary forum to discuss sovereign debt restructuring. Participation by the Union and its members in discussions of Assembly resolution 68/304 would be guided by the following considerations: the ad-hoc committee must be limited to the elaboration of a non-binding “set of principles”, that built upon a market-based voluntary contractual approach. Further, the ad hoc committee should reflect recent and ongoing work on sovereign debt restructuring undertaken at IMF.
The representative of Japan said her country had actively participated in the discussion. However, the issue required technical expertise and knowledge, as well as the participation of all relevant stakeholders, such as IMF. Thus, her delegation voted against the draft resolution.
The representative of Chile said the restructuring process should be respected for the stability of the international financial system. There was a need to make progress on the issue, which was agreed and accepted at the global level. Accordingly, the resolution took a step in the right direction.
The representative of Mexico recognized the important role of the facilitator. His delegation voted in favour of the draft resolution as it was a procedural resolution.
The representative of Australia said his delegation voted against the draft text. Although his country had continuously engaged in the discussion, it was unfortunate that the text did not reflect a multilateral compromise.
The representative of Singapore expressed support for the draft resolution. However, the United Nations might not be the right place to have the discussion.
The Committee then turned to a further draft resolution on the matter, “External debt sustainability and development” (document A/C.2/69/L.3), which had no budget implications.
The representative of Bolivia, speaking for the Group of 77 and China, emphasized the importance of having a timely solution to the problem of debt restructuring. External debt was among the major obstacles to development and the eradication of poverty. That was an area where the role of the United Nations must be strengthened. He appealed to States to support the draft.
A recorded vote was requested.
Speaking before the vote, the representative of the United States expressed regret that the Committee was deviating from procedural norms by not having agreed on a consensual text, as always had been done previously. Not wishing to set a precedent, she was obliged to vote against the resolution.
The resolution was then approved by a vote of 128 in favour to 4 against, with 46 abstentions.
Speaking after the vote, the representative of Japan expressed regret that there had been no consensus on the resolution, as consensus was at the heart of the Committee. As consensus had not been found, her country was obliged to oppose the text, with the hope that consensus might be reached next year.
Also speaking after the vote, the representative of Colombia said her delegation voted in favour of the draft resolution and regretted that it had not been approved by consensus.
The Committee next took up the cluster, “Follow-up to and implementation of the Mauritius Strategy for the Further Implementation of the Programme of Action for the Sustainable Development of Small Island Developing States”, on two eponymous draft resolutions (documents A/C.2/69/L.53 and an earlier version, A/C.2/69/L.24). The Secretary of the Committee presented a statement on the budget implications of draft resolution “L.53”, which was then approved without a vote.
The representative of Samoa expressed hope that the collaborative spirit of the negotiations would continue as “we embark on the Samoa Pathway”. The resolution just approved was a first step, which relied heavily on working cooperatively.
The representative of the United States said that the consensus reached demonstrated the importance all attached to the small island States and the Samoa Pathway.
The representative of Japan clarified that the costs associated with the resolution should be addressed in the programme budget and those indicated today were not binding.
The representative of Canada said she was pleased to join the consensus. She pointed out, however, that the figures presented were only estimates and could not be prejudged without input from the Fifth Committee (Administrative and Budgetary).
The Permanent Representative of the European Union Delegation thanked the facilitator for her flexibility on the draft resolution, and said the bloc was pleased to join the consensus.
Draft resolution “L.24” was then withdrawn in light of the approval of “L.53”.
The Committee then took an oral decision to take note of the report of the Secretary-General titled “Towards the sustainable development of the Caribbean Sea for present and future generations” (document A/69/314).
The Committee then turned to two draft resolutions entitled “Harmony with Nature” (document A/C.2/69/L.63 and its earlier version, A/C.2/69/L.34), approving the final version without a vote.
Following, the representative of Ecuador, speaking on behalf of the Group of 77 and China, said States could expand the progressive adoption of the conceptual framework to achieve sustainable development in harmony with nature worldwide.
The representative of Bolivia recalled that the model of sustainable development in harmony with nature was one of the pillars of her country’s development. Only holistic approaches towards sustainable development would guide mankind to ensure the well-being of the planet and its people.
As “L.63” had been approved, “L.34” was withdrawn.
The Committee then took action on two versions of draft resolutions on “International migration and development” (documents A/C.2/69/L.32 and A/C.2/69/L.61).
The Secretary of the Committee then presented a statement on the budget implications of draft resolution “L.61”, which was approved without a vote.
The representative of Ecuador said that the draft resolution was an important step towards the inclusion of migration on the international agenda. “We are beginning to pay a debt” towards “our brother migrants”, which had been building for some time.
The representative of the United States reiterated that her country had a long history of welcoming refugees. Further, she said the United States was committed to fight against the acts, manifestations and expressions of racism, racial discrimination, xenophobia and related intolerance.
Colombia’s representative welcomed the approval of the draft resolution and stressed the important contribution of migration in realizing the Millennium Development Goals. Recognizing that human mobility was a key factor for sustainable development, she said the issue should be discussed in the context of the post-2015 development agenda.
Sources: United Nations
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