1. All the countries of the world are suffering the effects of the crisis in the international economy, some more than others, but the 4 billion human beings who inhabit the Earth are affected by its tragic and pernicious consequences.
2. The industrialized nations were the first to feel these effects, towards the end of the '70s, through the difficulties that arose in the monetary system in 1974 and 1975 because of the adjustment of oil prices, and especially since 1979, when their economies became stagnant, with consequences that were immediately felt by all nations. Furthermore, in 1978 the centrally planned countries, which had attained a high rate of growth up to the first part of the 1970s, also began to suffer from an economic crisis. The countries of the third world have been enduring a similar fate since 1981, with the stagnation and deterioration of the relative degree of development they had attained in recent years, a phenomenon which has not spared even the oil-exporting nations or recently industrialized nations.
3. How has it been possible for a phenomenon of such unprecedented scope to have affected all nations, whatever their resources, the efficiency of their rulers and administrators, the economic model they follow or their existing political system? What is the explanation for the sudden paralysis in a development process which was considered to be limitless? Was it not thought that multinational corporations, free from "negative political controls" and possessing the highest degree of technology, were the best means for distributing development throughout the world? Was it not thought that the degree of modernization attained through public policies of industrialized nations, capitalist as well as socialist, ensured that they would rapidly bring about such a result? How could the experts of the financial transnational make such glaring mistakes? How is it that the international co-operation systems and agencies, largely set up in order to avoid crises, are incapable of achieving the aims for which they were established?
4. But I have not come here in order to absolve the nations of the third world from any responsibility, not even my own nation. We are aware of the mistakes we have made, as well as of our weaknesses, which have also helped to cause the problems we face today. But our contributions to world development should not be forgotten. In the last 13 years, developing economies have attained higher rates of growth than the industrialized nations and the economic crisis reached our countries later, which proves the impact of outside factors. Some nations began to export manufactures. Latin American nations made progress, as did oil-exporting countries. To this must be added our contribution in food, raw materials, energy sources, financial resources due to the flight of capital and workers, who today remain unemployed in the countries of the North. But the crisis which began in the industrialized nations has offset the modest progress achieved through so much effort, with the result that today the third world is beset by serious economic imbalances which in some cases are becoming chaotic.
5. Much has been said about the origins of the crisis, but often only the most immediate causes are mentioned: higher oil prices and interest rates, discrepancies between economic and social policies, stagnation in productivity, irrational decisions by the business sectors and the fall in world trade. No doubt that analysis is correct and has been useful; nevertheless I believe the present phenomenon is more complex and more significant than that, and consequently it cannot be dealt with properly by an analysis of merely circumstantial factors. In other words, it is my view that we are faced with an unprecedented structural phenomenon, which calls into question the bases on which the post-war world economy was organized. Since today's crisis is not of a traditional type, it may well be asked if it can be resolved within the framework of the traditional structures now in place.
6. I should like to make some comments here. Military expenditures have resulted in the diversion of vast sums from genuinely productive activities and from pressing social problems. Furthermore, in the present state of military technology and exploitation of the material resources of the planet, wars do not add to the wealth of the world economy, but rather destroy what there is. Major investments devoted to the use of atomic energy, to space exploration and to scientific research have done little to invigorate productive activities in the short term. Transnational corporations bypass national sovereignty, and they lack vision and interest in economic and social development. Oligopolistic control of technology has prevented this sector from being included among the needs and problems of the third world and might even be a new element acting against it. International organizations, controlled or bypassed by the major Powers, have less and less influence on international relations and the direction of economic activity. The remarkable economic expansion of recent years seems to have lacked the basis necessary to ensure its continuity and a system to control and guide it.
7. Getting ahead of history and foreseeing the economic events we now witness today, in the mid-1970s the General Assembly adopted a programme of action for restructuring international economic relations through the establishment of a new international economic order. Later on, the General Assembly decided to undertake what was termed global negotiations in the areas of commodities, energy, monetary and financial problems, trade and development. At present both initiatives are at a standstill, and it is not an exaggeration to say that so far at least they have failed. The same could be said about the Cancun meeting,' which was guided by the lucid report of the Brandt Commission and the sixth session of the United Nations Conference on Trade and Development. In view of these frustrating facts, pessimism is rampant and many wonder whether these initiatives have any meaning in practice, whether any positive results are to be expected of them and whether the industrialized countries, over and above their always generous statements of good intent, are truly interested in shouldering the essential responsibility which they bear for the development of the third world.
8. But if the principles of international policy defined in the Charter of the United Nations, its initiatives and proposals regarding the search for agreement and the enlightened analysis and thorough study of social and economic development in the world have not been sufficient to lead us to think deeply, the serious events which beset all nations today should do this. In this context, the economic crisis in Latin America today is a good example.
9. After three decades of continuous growth, Latin America and the Caribbean are probably immersed in the deepest depression of the century. Although the United Nations Development Decade has only recently come to an end, our peoples are not only still far from attaining its purpose, but are going through a process of social involution caused by a decline in their economies. Inflation, which in 1983 may well reach three figures, and the rising level of unemployment and underemployment are seriously affecting standards of living at the lower and intermediate levels. There are nations in which the scourge of hunger has appeared—something which was not believed possible in the region. Social conflicts are worsening and political stability is becoming increasingly vulnerable, with obvious consequences for the frequently proclaimed need for hemispheric security, which today is economic and social in nature, above all, and not military, as some believe.
10. In facing the crisis Latin American countries have shouldered their responsibilities. Almost all of them have developed adjustment policies aimed at cutting the deficits of their external and fiscal sectors. But the results have been harmful in terms of income distribution and economic growth, which in almost all countries of the region today is negative. It must be remembered that austerity programmes are bearable only if they are temporary, if they are kept within certain limits and if they offer real possibilities for overcoming the problems. But, despite the major sacrifices made by our peoples, we do not see any evidence that the recovery of the continent may have begun. The reason for this is that the international factors which gave rise to the crisis still exist, to which we should add the floods and the drought which exacerbated the economic problems of some countries of the region.
11. In the final declaration of the Williamsburg Summit the industrialized nations recognized that the "weight of the recession has fallen very heavily on developing countries" and said that they were "deeply concerned about their recovery". They thus recommended that certain measures be adopted—-infer the opening of their markets and the re-establishment of the flow of resources and official aid.
12. In this case, as in many others, there is a gap between words and actions. The deterioration in international trade continues. The fall in the value of commodities has been so great that some of them are at levels below those of 1930. The protectionism of the industrialized nations takes a wide variety of forms and is reaching inadmissible limits. In 1982 Latin America received less than half the net inflow of capital that it had received the previous year, and it is expected that the amount will be still lower in 1983. In the last 12 months some countries have not had a single loan from international banking, and those that have had loans have got barely enough to make their overdue payments and service their debts, much less finance their development. In some cases the scarcity of foreign exchange is so great that some nations cannot even acquire essential raw materials and foodstuffs. The high interest rates charged by the creditor banks make it extremely difficult to renegotiate the debt.
13. The so-called Group of Seven believes that the recovery of their economies is the best incentive for the reactivation of the economies of the less developed countries. It is no doubt essential for Latin America that the recovery in North America be consolidated and extended to other industrialized nations. But even if these optimistic forecasts prove to be right, it will probably take more than a year for the effects to be felt, and the delay will aggravate the difficulties of the region. Furthermore, if the problem of the debt remains unsolved and the present stagnation continues, the recovery of the industrialized nations might not occur to the extent desired. If that happens, we may well be faced with a collapse of the world economy.
14. It has been stated that in order to revitalize growth there must be no increase in oil prices or interest rates. The former condition has been achieved at a cost to the oil-exporting countries, which are suffering today from serious economic problems. With regard to the latter condition, the situation is uncertain and one wonders whether high interest rates have not been mot e to blame for today's crisis. It is true that nominal interest rates have fallen, but real interest rates remain high because of the high margins charged by creditor banks and because of a drop in inflation in the industrialized countries.
15. We are faced with a serious economic problem which has exceeded the ability of any State to solve on its own and before which the traditional standards for action of the international co-operation agencies have proved inadequate and have become markedly political in character. The United Nations is the highest world political body and the Organization was established precisely to deal with this kind of problem. As this is the first time a President of Ecuador has had the great honour of addressing the General Assembly, I have chosen to refer to a problem which is of vital importance to all nations.
16. Interdependence is one of the factors characterizing the second half of the twentieth century. If national political conflicts or localized wars place world peace at risk, how will it not be threatened when all nations and their peoples suffer from a social upheaval hitherto unknown to those who inhabit the planet today and to which we cannot see a possible solution? Awareness of these risks and the conviction that international co-operation and multilateralism—which are so underestimated—are today more than ever essential has led me to request of two regional agencies, the Economic Commission for Latin America and the Latin American Economic System, that they develop a programme of action for Latin America and the Caribbean in order to deal with the crisis. In order to study this, the personal representatives of the heads of State of the region met in the capital of my country and at Santo Domingo. In January an economic conference will be held at Quito to adopt it. Latin America wishes thus to contribute to the quest for a shared response by all of us who must deal with a solution to the crisis: the countries of the South and of the North, agencies of international co-operation and international banking.
17. To this end, the costs of the adjustment must be fairly distributed among all the parties concerned and not only among third world nations, which has been the case up to now. It must be borne in mind that the indebtedness was due to the permissiveness of international banking, which resorted to every possible means to place its surpluses and through pressure converted them to short-term debts. These operations have yielded excellent profits. Thus, for example, it is estimated that almost half of the 1982 profits of the ten largest North American banks derived from their international operations. With regard to the industrialized nations, the recovery of the third world is in their interest since the contraction of its imports is having a negative impact on the economic recovery of the North. They must therefore honour their commitment to increase their quotas in IMF and use their influence in this body, as well as in the World Bank and in others, to ensure that their decisions and programmes are adequate to meet the challenges of the crisis. Renegotiation agreements must take into account each country's actual ability to pay, which depends on the volume and value of its exports. Public financing must cover part of the credit which used to come from private banks. Above all, interest rates must return to their levels of the previous decade. We must not forget that mankind is sailing in a fragile ship which may well founder if we do not all join together to keep it afloat. If it does go down, it could take everyone with it. That others may ignore this risk is explicable, but it would be unpardonable for us, who are in government, to disregard it.
18. Greater still is the tragedy of peoples who are not only suffering from the economic crisis but also from the scourge of war often visited upon them by extraneous forces. My country has witnessed with much distress the Central American conflict generated by the authoritarian and exploitative regimes which held sway in the region, a conflict which today is promoted by foreign intervention intent on ending the East-West conflict. Ecuador once again reiterates its support for the Contadora Group and makes a fervent appeal to all parties concerned to cooperate with the Group. There can be no further talk of peace in Central America with weapons in hand. For so long the only language heard has been that of weapons, and the time has come for the voice of the people to be heard.
19. Ecuador has maintained, and will continue to advocate, the imperative need for an end to colonial intervention in the Malvinas Islands; for the withdrawal of foreign troops operating in Afghanistan, Lebanon, Cyprus, Kampuchea, Namibia, Chad and other areas; for an end to the cruel military conflict between Iran and Iraq; and for a negotiated solution for the problems of the Middle East, in particular of the Palestinian people.
20. For the good of mankind the arms race must cease, especially that of the major Powers, and the threat of a nuclear holocaust must end. After having lived through a promising state of detente in recent years, we now find ourselves in the midst of a political and military confrontation whose consequences might be more serious than those of the cold war. People everywhere are duty-bound to defend peace, whether they come from the East, the West or the third world. A return to dialogue and sanity is, above all, a responsibility of the major Powers.
21. The United Nations must continue to preserve international peace and security and promote the peaceful settlement of existing disputes in accordance with its principles, which do not recognize the use of force, territorial conquest or the occupation of territory, and on the basis of reason and justice.
22. In the American continent there are problems which are harmful to peace, security, co-operation and development, such as the territorial claim by Ecuador in the area of the Amazon, which must be resolved for the common good of two peoples that wish to live in peace within a framework of fruitful co-operation.
23. After one of the longest periods of dictatorship in its history, on 10 August 1979, thanks to the will of the Ecuadorian people and the co-operation of its armed forces, a democratic system was re-established in my country. A month ago I began my last year in government, during which democratic institutions have been consolidated with full observance of public freedoms and human rights and with attention to social needs, especially those of farmers and the poorest, despite the economic crisis which has also affected my country. Our citizens are now preparing for the election next year of new rulers and parliamentary leaders. With this background information and in the name of Ecuadorian democracy, I wish to express my sincere desire that all peoples of the world may live in freedom.
24. My country, which was one of the founders of the United Nations and has always remained loyal to its principles, will continue to support it. We consider the Organization to be an essential instrument for the preservation of peace and the promotion of development. It is my hope that this tragic year in which peace has been violated on all continents, not only by violence and war but also by serious economic and social problems, will see the opening of a path along which the peoples of the third world and the countries of the North will find the necessary common response to the critical situations which weigh so heavily on the future of mankind.
25. As a representative of the people of my country and in compliance with the resolution adopted at the Seventh Conference of Heads of State or Government of Non- Aligned Countries, held at New Delhi in March 1983, it has been a high honour for the President of Ecuador to come to this forum of peace and address the representatives of all the nations of the Earth.