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What sort of impact do you think the global economic downturn will have on UN activities around the world?
I think the global economic downturn is going to have an impact on three major areas of UN activity. One is fairly obvious – that is, it is likely that there will be fewer resources available to us because many countries that contribute to the UN are in economic difficulty. Historically, whenever there has been economic difficulty the availability of resources reduces.
I think the second impact will be that the people whom the UN are most concerned about around the world, both in terms of development work and humanitarian work, are going to be more vulnerable. Although the crisis has first hit the powerful and mighty who have large amounts of money invested in various bonds and stock markets, it is soon going to transfer into the real economy. It is in fact already transferring into the real economy through increased unemployment, through decreased markets for exports. And when you have that increased vulnerability, it can also mean that people will be more vulnerable to natural disasters, as poor people with low incomes tend to move to areas such as flood planes, into places where they shouldn’t be living. It may also create more tension within societies, which in turn may have an impact in creating disturbances and lead to a need for more humanitarian assistance. I think it will also lower incomes among the poorest of the poor, and have an impact on areas such as the Millennium Development Goals.
And I think the third broad area, and I hope it won’t happen, but there is a possibility, is that it may increase tensions amongst countries or perhaps among regions in countries, and that may create a demand for more UN involvement in conflict resolutions. In a more positive way, the global economic crisis should prove to countries the necessity for world economic well-being, as opposed to the economic well being of an individual state or community. You need to have global mechanisms, because with the speed in which things happen, what happens on Wall Street can happen on Main Street in the United States, but it can also have an impact around the world, and the UN should be involved in trying to mitigate that. Otherwise a crisis which could be a small dip in the ocean, becomes a big dip, and a big dip is bound to have other consequences, which will make it much, much harder for the global economy to regain its stability.
Is there likely to be an impact felt in this country?
I think there will be. A very large part of the Sri Lankan economy depends on exports, such as garments, where Sri Lanka is a leader, tea, coconuts, and many other things.
Secondly a very large part of the Sri Lankan economy depends on foreign remittances. It is the second largest source of foreign income according to official figures, and if you were to take into account unofficially reported remittances, it might be even the largest source.
And there will be fewer opportunities for those people to make money. Their incomes may reduce, they may loose their jobs, and that going to have a knock on effect. It may have a knock on effect in poor areas of the country, as people who are working abroad are poor people. It may be mitigated to a certain extent, as a lot of Sri Lankans are working in the Middle East, and those are the countries that are likely to be the least affected, but there will still be an effect. I think those are the two biggest areas. I think the third factor is the Sri Lankan industry’s dependence on investments. There is going to be more competition for less foreign investment around the world and that going to affect the country’s ability to compete, and thereby its economy. So there is definitely going to be an economic effect. Whether there will be a bigger effect in terms of human development, I think will depend a lot on the Government’s actions, and also how the International community works with Sri Lanka to mitigate that effect.
In terms of UN activities in Sri Lanka, how would ordinary Sri Lankans be affected by the impending economic downturn?
Well, in one sense, Sri Lanka, because it has been going through such difficult times over the last decade, has some experience in dealing with crisis and there is a lot of resilience, within the economy, within the society, at coping with the ups and downs. At the same time as I indicated in my last answer, so many Sri Lankans are dependant for a good part of their livelihood on international trade, national investment and international remittances. So, the garment worker who is working in Kurunegala, who maybe the main income earner for her family in terms of cash income – when she looses her job, that going to have an impact on her family, on her community. The people living on plantations picking tea right now – with the declining tea prices, they may loose their income and that will have a knock on effect, for example, in Bandarawela in the bazaar, on all the traders there. So I think there is a real risk that the ordinary Sri Lankan will be affected. In addition you have Sri Lankans who are living in areas where they have been affected by some sort of disaster over the years. The tsunami in 2004, the effects of being displaced by the conflict over the last couple of years…. These areas will find it hard to get back to normalcy as there will be more competition for investment from other areas in the country.
In terms of our ability to actually assist, it may also be more difficult because there will be more competition for development funds, there will be more competition for funds for humanitarian assistances around the world. So it is very important that we in the UN do our job properly, so that we can adjust our programme to work with our many partners here, most important of who is the Government, to address these issues to try to, I guess compete, with the other countries around the world and other UN programmes around the world. So we can get resources here for programmes here that mitigate the effect of the economic downturn on Sri Lanka, and us the economic downturn in a positive way to increase what I think gives Sri Lankan its main competitive advantage around the world, which is the quality of Sri Lankan human capital in terms of its education and health care. If that is lost in Sri Lankan during this period, if it isn’t preserved and strengthened, it may be much more difficult for Sri Lankan to bounce back from the economic downturn.
If household incomes decline in Sri Lanka, what are the likely effects to be experienced in terms of the basic development indicators?
In one sense, if the Government and society are able to maintain a priority on basic investments in health and education, the impact on development indicators will be mitigated. But if the allocations towards health and education decline, you will have an effect. In countries where ordinary people have to pay for their medical expenses, may be like the United States and a lot of other countries in Asia, it’s going to be much harder. If Sri Lankan can preserve, essentially, the free health system and the free education system, that is going to mitigate the downturn. But nonetheless one of the areas in which Sri Lanka has progressed the most over the last years is the reduction of the population that lives below the poverty line. And there has been a decline, but a large part of the population isn’t that far above the poverty line. So if you have reverses in income you may have people that fall below the poverty line again. And if you look at poverty also defined in terms of what you can buy with your money, if the inflation affecting other places translates into higher food prices, the people are going to be able to buy a lot less. It will be harder for them, so that why it is very important to be (again I use the expression) ahead of the curve, have measures in place to mitigate the effects on the most vulnerable in society, because the vulnerable have to feel their included. If they are not, it is very hard to have a society that goes forward, and that’s the experience of Sri Lanka, the experiences of South Asia and many other Asian countries, which have progressed over the last few years.
Should the Millennium Development Goals be revised?
I think no, and yes. No in the sense that so many, including all the world leaders, agreed upon it in 2000, and it has been reiterated in a number of meeting since. I think the MDG’s goals have been translated into programmes and targets around the world and it is best not to mess with them. I think they do capture an important aspects of, I guess you could say, psychical development. Of course there are other aspects to development which are not captured in the MDG but are captured in the Millennium Ddeclaration. People tend to forget that these world leaders in September 2000 actually signed something called the Millennium Declaration, which is something much broader, including matters regarding governance, human rights, the environment….. The MDG were extracted from that and dealt with things which are perhaps more measurable, like maternal mortality, infant mortality, gender equality, Aids and poverty. And it is important not to forget that these measures of governance, measures of rights, environment, are part of the package and really important. So yes, the MDG should be revised to somehow capture that, but I don’t think they should be revised at this point. The danger is that it would take away from the momentum of the eight goals which are very important.
6. Might we see other problems increase, such as impunity toward the rule of law?
Yes, I think on a global basis, when there is an economic downturn, that sometimes translates to tensions between countries. When there is tension between countries, states tend to, I guess, have stronger central roles and stronger laws. In my own country Canada, when there was a slight upsurge of a separatist faction in Qubec – a small terrorist group kidnapping a couple of people in 1970 – we brought in the War Measure Act. It was a point of much controversy and still is in Canada, but it was brought in by a very liberal minded Prime Minister who was actually a human rights advocate. It was removed a few months later. So even in a county like Canada, if you have tensions rising there is a tendency to bring in stronger laws to protect National Security. So I think that there is a danger with the economic downturn if that leads to tensions between countries. And if countries turn inwards instead of turning outwards, that could lead to issues of stronger central government control, because of National security. I think as someone who has worked for the UN for almost 25 years, I think I do try to believe what the UN is based on. I believe that the solution is not to turn inward but to turn forward. In fact I think the way things have changed in the world most recently countries don’t really have a choice. If you turn outward, I think that it’s much more likely the fundamental values which the UN are based on, which are values of quality, values of sovereignty of countries, but also values of tolerance, that those will be propagated rather than constrained. But there is a danger that in times of tension people will turn inwards. That has to be avoided for any country, especially smaller countries that are more vulnerable to international systems. I would even include my home county in that, as even though it’s the second largest country in the world, economically it is not a super power.
Do you think that the financial downturn will change the way world affairs operates?
I think it will, in the sense that it has been seen in the way international financial markets have functioned over the last 15 years or so. It did bring a lot of good and it did bring a lot of wealth, but at various points even going back to 1997 when there was the Asian Economic crisis, it was recognized that you have to regulate these markets. You have to throw sand in the machine sometimes, because the markets work too fast. They work on short term information, they don’t work on long term information, and there needs to be accounted a balance to them, because there is a tremendous positive power to international capital movement. Some of the developments in China over the years, with so many people coming out of poverty, are a result of the positive deployments of the capital movement. But such rapid capital movement can do tremendous damage as well. So there is a need for individual countries to have mechanisms in place to counter balance and regulate that. But because there are primarily international capital movements, and if just one country does something by itself it may end up missing out on the benefits, you need to have an international action. Ad I think that this current crisis is so deep that it is going to lead to international action. For example, the IMF – just eight or nine months ago people were talking about the IMF becoming increasingly irrelevant to the current situation, because many countries had their cash balances. People weren’t following the IMF advice, and suddenly all these countries are now having to go back to the IMF. It does have to be like a lender of last resort, but I hope that the IMF also learns from previous lessons – and I think they have – and apply policies which are, I guess, more in line with what the UN talks about, such as human development. Policies that have a more sustainable impact, because it is great to have more rapid capital movement, but if the wave washes away, and skeletons are left on shore then it hasn’t brought a benefit. You’ve got to let that wave come in and become calmer and bring sustainable benefit, rather than having it crash out and destroy things. We have to change the system to stop that crashing. I think we can and also, with the American Government, with the electing just an hour ago, at least from what was said, maybe more actively engaged in these issues, it should be easier for brother countries, and for the United Nations to play that positive role.
The President elect, Barak Obama – Does not send a very powerful message to the world that here is a global citizen, at last in command of the shining city, of the world. That it has truly become the melting pot of communities, and that humanity and human aspirations transcend all other fault lines that anthropologists and social scientists talk about.
The answer is yes, very strongly yes. I think it sends a very important message that you can be a very good citizen of your country and a strong member of your community, because Barak Obama in fact started his political involvement being a community organizer in very poor parts of Chicago, areas as poor as some parts in southern countries, poor as some parts of Sri Lanka. But you can also be a responsible and engaged global citizen. If all countries and if all communities recognize that it is possible to be a good member of your community, it is important to have a strong cultural identity and be proud of it, but at the same time to be somebody who interacts with others and includes them rather than excludes them, that’s a very positive message. That idea is very central to what the UN is about – that you have individual countries, you can have people within those countries who are good people, who have their own individual identities that have to be protected, yet who can also interact together for everyone’s mutual benefit. It is the politics of inclusion, not the politics of exclusion, and that’s what the UN is based on.
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