UNITED NATIONS ECONOMIC AND SOCIAL COUNCIL GENERAL E/ESCAP/65/15/Add.1 6 March 2009 ORIGINAL: ENGLISH ECONOMIC AND SOCIAL COMMISSION FOR ASIA AND THE PACIFIC Sixty-fifth session 23-29 April 2009 Bangkok SPECIAL BODY ON LEAST DEVELOPED AND LANDLOCKED DEVELOPING COUNTRIES (Item 3 (a) of the provisional agenda) THE FOOD-FUEL-FINANCIAL CRISIS AND CLIMATE CHANGE: ADDRESSING THREATS TO DEVELOPMENT Addendum BALI OUTCOME DOCUMENT I. INTRODUCTION 1. The United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) and the Government of Indonesia jointly organized the High-level Regional Policy Dialogue on “The food-fuel crisis and climate change: Reshaping the Development Agenda” in Bali on 9 and 10 December 2008. The High-level Policy Dialogue was held to address the food-fuel-financial crisis and climate change issues in a comprehensive and integrated manner. The main objective of the Dialogue was to find strategies in addressing the impact of these crises and to prevent those crises from becoming a development emergency. 2. The High-level Policy Dialogue was attended by more than 100 policymakers, economists, climate change specialists, food and energy security experts, agricultural innovators, private sector entrepreneurs and civil society representatives from the Asia-Pacific region, who met to discuss the core issues in the food-fuel-financial crisis and climate change and come up with an Outcome document with actionable recommendations. Twenty-two ESCAP member Governments were represented, as were several United Nations bodies, specialized agencies and other organizations. 3. Participants expressed their appreciation to the Government of Indonesia and ESCAP for organizing the High-level Regional Policy Dialogue, in particular to H.E. Mr. Susilo Bambang Yudhoyono, President of Indonesia for his inspiring message and support and to the people of Indonesia for their generous hospitality. DMR A2009-000140 TP 110309 DP 120309 DI 130309 e79e-4304-a693-cd1fe5cd3c51.doc 39056c38- E/ESCAP/65/15/Add.1 Page 2 II. IMPACT OF THE CONVERGENCE OF THE CRISES 4. Participants noted with deep concern that the recent volatility in food and fuel prices had posed a grave challenge for the Asia-Pacific region, as the increasing spillover effects of the global financial crisis threatened to inflict untold damage on human lives. 5. The convergence of those interrelated and mutually exacerbating crises, together with climate change, also threatened to undermine the development gains achieved in the region and negatively affect its future prospects. In particular, progress towards the Millennium Development Goals in the region could be significantly reversed. All indications suggested that the number of people living below the poverty line, as well as those vulnerable to poverty, would increase dramatically. 6. Participants also noted that these crises had disrupted trade and investment and were causing difficulties in securing cost-effective financing for development. 7. Against that backdrop, participants called for greater international and regional cooperation to cope with the crises. This included, among others: (a) strengthening existing mechanisms as well as establishing new mechanisms to support countries in balance of payments difficulties; (b) providing a channel for countries affected by the crises to receive budget financing assistance specifically for Millennium Development Goal-related activities; (c) improving surveillance of the financial markets to provide early warning of fragilities, vulnerabilities to financial shocks and contagion; and (d) addressing regulatory deficiencies to curb speculation in commodity markets. III. THE FINANCIAL CRISIS AND ITS IMPACT ON ASIA AND THE PACIFIC 8. Participants noted with concern that the currency markets in the region had shown increasingly disorderly behaviour in recent months, generating large and erratic shifts in the exchange rates of the currencies of the countries in the region, thereby threatening to disrupt intraregional economic stability. There was thus a need for more intense consultation among countries regarding exchange rate policies and related actions. 9. The current financial crisis was threatening to disrupt trade by generating, inter alia, a significant gap in trade finance, mainly because of tightened credit conditions in the United States of America and Europe. There was thus a need to focus more on regional mechanisms. A number of banks in the region with an excellent track record could play important roles in filling the gap. These need to be supplemented by increased government support to export credit agencies. 10. Longer term, durable stability in the region called for greater cooperation among Governments in monetary and financial matters. Consideration should be given to establishing formal interregional exchange-rate arrangements supported by an adequate intraregional stabilization fund and mechanisms for effective surveillance of financial markets to provide early warning of fragilities, vulnerabilities to financial shocks and contagion. 11. Increased speculation in commodity markets has been a major factor in recent gyrations in the markets for fuel and food, threatening energy and food security. Tighter regulation in order to curb commodity speculation needed urgent attention in the reform of the international financial architecture. E/ESCAP/65/15/Add.1 Page 3 12. The participants recommended that ESCAP provide a forum for fostering a common understanding in order to harness greater regional collaboration and exchange of information through high-level policy dialogues and other mechanisms towards exploring policy options and adopting suitable approaches in responding to the global financial crisis. 13. Participants called for a robust and timely response to the crisis and recommended that ESCAP be used as a platform for forging greater regional cooperation in partnership with specialized agencies of the United Nations and other international and regional organizations in formulating and implementing effective social protection measures to protect the poor and other vulnerable groups, particularly smallholder farmers, women and children. IV. FOOD SECURITY AND SUSTAINABLE AGRICULTURE 14. Participants noted with serious concern that an additional 41 million people in the Asia-Pacific region had been pushed into undernourishment in 2007 due to the food crisis, adding to the 923 million people who are chronically food insecure, of whom 95 million are malnourished children under the age of five. It was necessary to further strengthen food security in the region within a comprehensive framework encompassing sustainable agriculture and forestry, climate change anticipation, adaptation and mitigation, and social protection, including hunger-based safety nets; as well as well-functioning markets. 15. Participants urged greater technical cooperation efforts to support capacitybuilding to strengthen national food security programmes, including the management of food stockpiles, the planning of agricultural land use and effective food information systems. 16. Research and development on sustainable agriculture, including its climate adaptation and mitigation potentials, along with the necessary financial resources, are urgently needed. Arrangements should be made for the sharing of experiences and the transfer of best practices in that regard. 17. Participants emphasized the urgent need to address commodity price volatility, taking into account the role of the commodity sector in development. In this regard, there was a need to take a multifaceted approach to tackle the challenges, including the impact of different types of biofuels on food security and food prices. Further, prices paid to farmers should reflect the incentives needed for them to remain engaged in food production. 18. Participants emphasized the pivotal role of regional cooperation in preventing and coping with the food crisis and ensuring that all people had access to food. Such cooperation could be highly effective in addressing the impacts of natural disasters, including floods, drought and other events that contributed to food insecurity. Effective regional early warning systems could enhance food security by facilitating the coordination of agricultural information from member States on matters such as expected crop yields, floods and drought. Regional and subregional action might also involve investment in effective food storage facilities/food banks and transport logistics, as well as capacity development in establishing national agricultural insurance schemes, ensuring that social dimensions would also be addressed in those schemes. E/ESCAP/65/15/Add.1 Page 4 V. ENERGY SECURITY 19. Participants highlighted the urgency of moving towards a new sustainable energy paradigm in creating a virtuous cycle of sustainable energy development. In that context, the participants emphasized that three elements should be in that cycle: quality of economic growth, reliance on greater energy efficiency and renewable energy, and strengthened efforts to mitigate and adapt to the effects of climate change. 20. While recognizing the benefits of indigenous technologies, participants emphasized the need to find effective ways to expand access to modern energy services to the poor. One of the mechanisms highlighted by the participants was a focus on provision of transition technologies as compared to large technology initiatives. The transition technologies could include solar photovoltaic lanterns and gasification systems for household use. They noted that greater public-private cooperation was a key element in any strategy to increase financing and investment in energy infrastructure and widen energy services. 21. Participants called for greater regional cooperation, including joint research, capacity-building and the possibility of accruing new financial resources in promoting best practices and exchange of information in technology development and transfer, with a focus on moving towards a low-carbon economy, reliable and sustainable energy supplies, and energy efficiency by increasing the share of renewable energy and natural gas in the energy supply. 22. Participants requested that ESCAP and its member countries cooperate proactively in order to implement an Asia-Pacific sustainable energy security framework, which, among other things, would require countries to work together to integrate energy systems in the region. 23. They also called on Governments, particularly those of developed countries, to share policy and experiences in the further development of new and renewable energy technologies as well as the transfer of clean energy technologies to developing countries through the reduction of technical and licensing costs, the removal of barriers to technology transfer and the strengthening of national technical capacity and the promotion of South-South and triangular cooperation. In that regard, they also requested the developed countries to provide adequate, timely and sustainable financial assistance to enable them to address the impact of climate change. VI. GLOBAL AND REGIONAL RESPONSES 24. Participants noted that the Governments, the United Nations system, subregional intergovernmental organizations, the private sector and civil society had expressed their resolve to work together in addressing the food-fuel-financial crises and climate change. 25. Participants welcomed: (a) the outcomes of the Ministerial Round Table on Energy Security and Sustainable Development in Asia and the Pacific, held during the sixty-fourth session of ESCAP, in April 2008;1 (b) the outcomes of the High-level Conference on Food Security: the Challenges of Climate Change Bioenergy, held in Rome from 3 to 5 June 2008; (c) the establishment of the United Nations High-Level Task Force on the Global Food Security Crisis; (d) the high-level event on the food and climate change crisis on the occasion of the United Nations General Assembly See Official Records of the Economic and Social Council, 2008, Supplement No. 19 (E/2008/39E/ESCAP/64/39), paras. 266-287. 1 E/ESCAP/65/15/Add.1 Page 5 session, in September 2008; (e) the relevant commitments made in the Forum Communiqué2 by the Thirty-Ninth Pacific Islands Forum, held on 19 and 20 August 2008, concerning food and energy security as well as climate change; (f) the outcomes of the 26th ASEAN Ministers on Energy Meeting (AMEM), held in Bangkok on 7 August 2008, and the ASEAN-United Nations Meeting on Food Security, held in Manila on 11 and 12 November 2008; and (g) the decision of the South Asian Association for Regional Cooperation (SAARC) to establish a food bank to act as a regional food security reserve for the SAARC member States during normal-time food shortages and emergencies. 26. Participants urged an early, fair and balanced conclusion to the Doha Development Agenda of the World Trade Organization, as that would be highly conducive to delivering substantial improvements in market access, reducing unnecessary market distortions, and ensuring non-discriminatory measures in global agricultural trade. The Doha Development Agenda should address the special needs of developing countries in terms of food security, rural development, and livelihood security. 27. Participants supported the need to bring the Bali Outcome Document to the attention of the ASEAN-United Nations Summit in 2009, ESCAP at its sixty-fifth session in April 2009 and the next SAARC Summit. . . . . . 2 A/63/498, annex.