Rich and poor nations seek deal for U.N. finance meeting
UNITED NATIONS (Reuters) - Rich and poor nations Tuesday edged closer to a deal on proposals for reforming the global financial system, but diplomats said there must be changes if a U.N. conference this week is to adopt them.
A three-day U.N. General Assembly meeting on the financial crisis and its impact on the developing world, originally scheduled for June 1-3, was postponed to June 24-26 when it became clear negotiators had no agreement on draft proposals.
Although the meeting has been billed as a summit, no Western leaders are expected to attend and only 14 presidents and prime ministers will show up. The other 112 countries taking part will send lower-level delegations.
The heads of the International Monetary Fund and World Bank will also be sending deputies, U.N. officials said.
Western envoys said that reflected dissatisfaction with the meeting's organizer, leftist U.N. General Assembly President Miguel D'Escoto of Nicaragua.
The top speakers are to be Venezuelan President Hugo Chavez and Bolivian President Evo Morales, both well-known leftists.
The run-up to the conference has highlighted differences between radicals who want to give the 192-nation General Assembly much more say in tackling the financial crisis and major powers intent on keeping control in their own hands.
With less than 24 hours to go before the conference opens at U.N. headquarters, diplomats told Reuters they were closing in on an agreement on a set of proposals they hope the conference will adopt.
D'Escoto told reporters that most of the work on the draft proposals was now done, though he said they would still have to be approved by the 126 nations attending the meeting.
"I am satisfied with the way it's going," said D'Escoto, a Roman Catholic priest who was Nicaragua's foreign minister in the 1980s while the left-wing Sandinistas were in power.
He also rejected criticism of the summit and the way it has been organized: "What is important is what will be agreed."
DISAGREEMENTS
Disputed parts of the draft reform proposals, U.N. diplomats said, include the future role of the United Nations in the global financial system and a "follow-up mechanism" to monitor fulfillment of promises made at this week's meeting.
Poor nations outside the Group of 20 club of big developed and developing economies -- a group that includes India, China and Brazil -- want the U.N. to play a leading role in the global financial system, an idea Western powers reject, the diplomats said.
The poor states complain that the G20 has virtual monopoly powers.
The draft financial reform proposals are outlined in a 15-page document, obtained by Reuters. Diplomats from Western and developing countries said the document will be amended further once the conference begins Wednesday.
Western diplomats described the new draft as a dramatic improvement over an initial version prepared by D'Escoto.
The initial draft contained language that had nothing to do with finance, the diplomats said.
Still, they were concerned about sections in the current draft, including a call for greater U.N. involvement with the IMF, World Bank and other global financial institutions.
Another issue that developed and developing nations disagree on is a recommendation for the General Assembly to create a council of economic experts to provide advice to member states on dealing with the economic crisis.
Some Western powers fear that such a council could lead to unwelcome economic meddling by the U.N.
Diplomats also criticized language in the draft that speaks of "deficiencies in national and international financial regulation and supervision," and calls for greater regulation of hedge funds and financial products like derivatives.
One senior diplomat from the Group of 77 bloc of developing nations complained that the draft proposals had been watered down to satisfy Western nations' concerns, though he predicted that an amended version would be adopted by consensus.
(Editing by David Storey)