My country, the Czech
Republic, has always appreciated the role that the
United Nations has played in strengthening security,
stability and prosperity in the world. I want to assure
Members that we will continue to participate in the
activities of the United Nations. We firmly believe in
the importance of this Organization and want it to be
efficient and effective. For that reason, we support the
reform of the Security Council so that it will more
adequately reflect the political and economic realities
of the world today, as some speakers have stressed here
today. Changes are necessary and we are ready to start
discussing them very seriously.
This year, in our part of the world, we
commemorate 20 years since the fall of communism,
since the moment when my country — together with
other States of Central and Eastern Europe — regained
freedom and sovereignty, and was again able to resume
the place in the community of free and democratic
countries that it enjoyed when the United Nations was
founded in 1945.
In the 20 years that have passed since those
historic events, we succeeded in building a stable
political democracy and in transforming our economic
system into a functioning free-market economy. I am
mentioning this because I believe that our experience is
relevant to the ongoing discussions about how to solve
the economic problems that the world faces today.
We are meeting at a time when the world is in the
midst one of the deepest economic crises since the
Second World War. The financial crisis, which
originated in the United States two years ago, quickly
spilled over into most other countries and led to a
severe decline in economic activity all over the world,
a substantial decrease in international trade and capital
flows and an increase in social and economic
instability in a large number of countries on all
continents.
The United Nations — as a unique worldwide
Organization — and its specialized institutions have
become an important global platform for discussing
alternative steps and policies that could, one hopes,
help to overcome the crisis and diminish its impact.
The measures that have been implemented to date have
contributed to the fact that the world has succeeded in
avoiding a repetition of the situation in the 1930s. We
also succeeded in avoiding a repetition of a massive
protectionist reaction to the crisis. Protectionism in all
its forms should be resolutely condemned here today.
We see the first signs that the economic crisis has
reached bottom, or come close to it. Nevertheless, we
find ourselves at the beginning of a difficult and very
complicated post-crisis period. There are many reasons
for the fragility and vulnerability of this phase, but I
should like to refer to just a few.
First, attempts to increase aggregate demand led
to unprecedented expansion in public expenditure and
public debt. As a result, a large number of United
Nations Member States are facing or approaching a
debt trap. Those huge fiscal deficits will harm future
economic growth. Secondly, international flows of
private capital, which contributed so substantially to
rapid economic growth in recent decades, are
decreasing and becoming less reliable. Thirdly, a
decrease in international trade will undermine the
continuation of export-oriented strategies of many
emerging markets.
It would be a tragic mistake to fundamentally
impair economic freedom in favour of State or
supra-State regulation just now. Long-term experience
shows us that it is thanks to free markets and free
entrepreneurship that we enjoy the current material
well-being and economic progress. Business cycles,
accompanied by economic downturns, recessions and
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crises, did exist, do exist and will exist in the future. In
spite of them, the world has been — at least in the past
two centuries — characterized primarily by economic
growth and growing prosperity.
When looking for an appropriate reaction to the
problems connected with the current crisis, we should
build on the idea that the crisis was basically a failure
of Governments, not of markets. The manipulation of
monetary policy in an attempt to artificially prolong
the period of growth, the irrational subsidization of
demand in the housing sector and the failures in
financial-market regulation contributed substantially to
the crisis. Let us not delude ourselves into believing
that economic cycles and their consequences can be
prevented by more extensive Government regulation or
by aiming at global governance of the world economy.
This issue has its important territorial and
geographic aspects as well. We have to pay attention to
the needs and interests of all kinds of countries — rich
and poor, developed and developing. Global economic
development will benefit from the removal of barriers,
not from creating new ones, because barriers would
substantially complicate poorer countries’ access to
foreign markets, as well as their ability to develop by
their own means.
Economic recession and large increases in public
debt have reduced the possibilities available to today’s
world to meet such goals as combating climate change.
I do not intend to go into details of this issue here now,
but we should carefully follow it because of unfinished
scientific debate and pay attention to the costs and
benefits of our future decisions.
I do, however, want to emphasize that the
measures proposed to combat climate change represent
another heavy burden for both developed countries,
which are falling into deep fiscal deficits now, and for
developing countries. This is happening in a context in
which rich countries, often pushing this agenda at
international forums, are losing their ability to
compensate poorer countries for the impact of those
additional costs.
The Czech Republic, as a successor State to
Czechoslovakia, which was one of the founding
Members of the United Nations, has always
participated actively in all kinds of United Nations
activities. It intends to do so in the future as well. It is
in our interest that the Organization remains a
respected high-level forum that contributes to
prosperity, stability and peaceful solutions to the
conflicts of today’s world.