Global Trends by Martin Khor
28 September 2009
Group of 20 summit in
However it did not tackle key issues of immediate concern to the developing countries, such as providing more liquid funds to help them cope with a reversal of capital flows, or to help countries from falling into a foreign debt crisis caused by the crisis.
Some progress on reforming the governance of the international financial institutions was made, by giving a figure of at least 5 per cent, as the shift from developed to developing countries in the quota (denoting equity share) in the IMF and 3 percent of the voting rights in the World Bank, when the reforms of decision-making power in these two organisations is completed.
reform process will still go on for several years, and 5% or 3% is too
little to re-balance the quotas of equity and votes, if the rights of
different categories of developing countries (the bigger countries like
the most important decision of the
move is bound to be controversial. On one hand, it will be hailed as
spreading international governance more evenly between developed and
developing countries. This is because the G20 includes developing countries
Thus the power of the developed countries is made more dilute, and the talk is that European countries as a whole have been over-represented and now some of them may have to give way to the bigger developing countries.
However, an even bigger issue is that most developing countries are not in the G20 and they have not accepted the G20 as the “premier” body that will decide on global economic issues in their absence.
developing countries have argued that the G20 is a grouping whose membership
was decided on by the big developed countries like the
The Minister of a Latin American country that is not in the G20 has said that even if a few developing countries in his region are in the G20, this does not mean that his country or region is represented, as he was not consulted nor did he agree that those countries would represent his country and other countries left out of the G20.
it can be argued that although
There is no internationally agreed system of election, selection or appointment in the membership of the G20, and this makes its legitimacy a question in the eyes of a majority of countries.
Recently, the United Nations General Assembly held its own meeting on the economic crisis, and several developing countries proclaimed that the Assembly is the Group of 192, that it represents almost all the world’s countries, and is thus legitimate and democratic.
There was a lot of discussion on the merits of setting up a Global Economic Council inside the UN, with its members to be selected or elected by all the UN members, and in which the various regions and their regional organisations would appoint countries to represent them, including some on a rotation basis.
Thus, the debate on how legitimate and representative the G20 is, and how the UN should be the proper forum for decisions on global economic matters, will continue or even increase, especially since the G20 has now proclaimed itself as the “premier forum”.
next G20 summit (in
will avoid any premature withdrawal of stimulus,” said the G20. “At
the same time, we will prepare our exit strategies and, when the time
is right, withdraw our extraordinary policy support in a cooperative
and coordinated way, maintaining our commitment to fiscal responsibility.”