Panel discussion on “Global Economic Governance and Development:

Enhancing the Coherence and Consistency of the International Monetary, Financial and Trading

Distinguished delegates,
Ladies and Gentlemen,

I would like to thank Ambassador Momen for the kind invitation to me to moderate this panel. The focus of this important event is indeed very timely. More and more, global economic governance is at the center of attention. Policymakers, academics, practitioners and the public at large are all deeply engaged.

The President of the General Assembly designated the topic as the theme of the general debate at its 65th session. Specifically, the theme is: “Reaffirming the central role of the United Nations in global governance”. During its 66th session this fall, the General Assembly will continue to consider this important issue.

Today, my remarks will focus on the current system of global economic governance and ways to strengthen it. As Moderator, I will try to present a range of views and perspectives, though I may not necessarily share all of them.

Ladies and Gentlemen,

The world is still on a fragile and uneven path of recovery from the financial and economic crisis. The Millennium Development Goals were set back by this global shock, as well as by the energy and food price hikes. In addition, there are new challenges to global growth and development. For example, we see increased frequency and severity of natural disasters, some linked to climate change.

These global and systemic crises threaten future progress in development.

They also reflect a world economy that is more connected and interdependent than ever. Yet our existing system of global economic governance was put in place more than 60 years ago. Many argue that it has not kept pace with international economic integration and interdependence.

Consider the growing economic importance of many developing economies. Their voices are not sufficiently reflected in the governance structures of several key decision-making bodies, though some progress has been made recently.

Furthermore, an increasing number of experts argue the existing international monetary, financial and trading systems suffer from interrelated weaknesses and inadequacies. They contend that these deficiencies are reflected in increasing fragmentation of global economic governance, leading to inefficiency and, above all, lack of coherence and consistency.

As a result, current institutional arrangements have not been able to tackle a range of pressing challenges.

Some of them have been highlighted, including:

Recently, major economies have been criticised for resisting bringing the traditional formal structures of global economic governance closer in tune with world realities. The critics point out that major economies rely on informal arrangements and ad hoc groupings. Such informal groupings cannot always address the underlying problems of established multilateral arrangements.

Since the financial crisis, the G-20 has replaced the G-8 as the major forum for international economic cooperation. This is a welcome development. Nevertheless, there are still questions to be answered.

Many have pointed to the limited representation of G-20. What are the implications for smaller developing countries?

This leads us to another important question. How can we reform the system of global economic governance to become more inclusive, effective and transparent?

In my view, to answer this central question, we need to ensure progress on the following 4 issues. Each one deserves serious consideration.

First issue: the United Nations must play a stronger role in global economic governance.

It bears repeating that the UN remains the only truly universal and inclusive multilateral forum. Its legitimacy has incomparable value. In this regard, we need to set our focus around two parallel sets of measures:

Second issue: we need to strengthen governance mechanisms in other parts of the multilateral system.

On this issue, an increasing number of countries have called for additional steps to strengthen the voice and representation of developing countries in the Bretton Woods institutions and other related bodies. The World Bank and IMF have taken steps to address imbalances in voice and representation. However, much more needs to be done, they argue.

Third issue: regional arrangements should be better incorporated into the framework for global governance.

Effective regional institutions and arrangements can strengthen global economic governance. They can better address regional needs and demands. And they can provide representation, voice and ownership for smaller, poorer countries.

There is considerable scope for strengthening regional mechanisms as part of global economic governance architecture. Linkages between the regional and global levels can also be enhanced, with regional agreements informing global processes.

Fourth issue: the G20 needs a better relationship with the established multilateral system.

The G20 has demonstrated increased willingness to involve the wider membership of the United Nations. And they have been open to fostering engagement with relevant stakeholders. Yet there are questions related to its limited representation. It is therefore important to improve and institutionalize the engagement between the UN and G20 and there have been specific suggestions made by groups like the “3G” (Global Governance Group) and other Member States. In a broader sense, there is also a need to ensure the G20, the UN and other multilateral organizations play a complementary role – a role that utilizes their comparative advantages and strengths.

In my view, these four issues are central to an effective system of global economic governance. However, political will is surely needed. It is the only way we will have the international monetary, financial and trading system we desire and deserve – one that is effective, transparent and inclusive.

The deliberations we have been having at the United Nations – including this meeting – should be seen as important steps toward achieving this goal.

As moderator, I will conclude with some questions for you to consider during the interactive discussion. These are also contained in the concept note for the meeting.

I look forward to a lively discussion and to hearing your insightful answers.

Thank you for your attention.