Recently the Philippines Prime Minister threatened that the hPhilippineswould be leaving the United Nations, if the organisation does not change its stand on his country’s policies. The UN, like many other global institutions, no matter how much we like them, is under threat if they do not reform.
The Old Ones
The challenge is not only of legitimacy and the legality of decisions these institutions pass but also of acceptance. The Bretton Woods institutions were instituted in 1944 and controlled by then top world powers. The problem the world faces with them now is that the old powers still control these institutions even though they do not have as much sway over the current financials affairs as they once did. To make sure these institutions survive and flourish, it is now critical for the old powers to pass on the baton to the new emerging ones. Failing to do so, may result in these institutions being perceived as illegitimate or just getting eclipsed by the newer ones. This new trend is evident with emerging growing competition to World Bank from banks such as the New Development Bank (BRICS-led) and Asia Infrastructure Investment Bank (China led).
Failing to do so, may result in these institutions being perceived as illegitimate or just getting eclipsed by the newer ones.
To the New Ones
I have spoken about the global institutions who, to survive, need to accommodate the new rising powers. There is another group of institutions who now need to do much more. One such institution is the G20. The G20 is a group of the top 19 nations and the European Union and is supposed to incorporate developing nations into the matters of global importance. The group came into its prominence after the 2008 financial crisis. The coordinated approach to minimising the effects of the financial meltdown prevented a much deeper recession.
The main issue with the G20 is that it has failed to act on important issues of our times. Although the G20 showed great resolve to fight the financial crisis and tax policies by introducing BEPS (and further work is expected); The G20 has furthered failed show any initiative on global issues like migration crisis, tax havens, terrorism, and climate change. These issues are global in nature, but the G20 has never shown any urgency to act on them in unison. This failure to act not only exasperates these issues but puts the whole idea of a global decision making on the backburner, and further delegitimizes the significance of the global institutions.
…failure to act not only exasperates these issues but puts the whole idea of a global decision making on the backburner, and further delegitimizes the significance of the global institutions.
Before it’s too late
The next G20 summit is happening in China. Hopes are high, but expectations, once again, are low. As Murphy once said, “Left to themselves, things tend to go from bad to worse”. Let’s hope our leaders get their act together, before it’s too late.