G20 Foreign Ministers Meeting: Session II – Global governance reform
21 February 2024
Your Excellencies,
In times of great and rapid change, not everything changes at the same speed. This creates imbalances and tensions in our societies and in the global system.
These are times of exponential change: technological, climate, economic and geopolitical change.
It is imperative to update the global governance system to allow it to keep up with this change and the complex challenges it brings.
That said, among these challenges, there are opportunities too. The rise of the Global South, and of its large emerging economies, all present in this forum, is bringing economic and political decentralization to world affairs.
And decentralization can bring with it an important promise – the promise of “dis-concentration”, and therefore, of inclusion.
Regional trade agreements, for example, may bring global supply chains and structural transformation to countries currently far from them; here, the African Continental Free Trade Area is a good example.
Forums like this one, and the G7, and the BRICS, may work to strengthen multilateralism, not weaken it, as Minister Viera has reiterated here today.
Regional MDBs – like the CAF, IADB, the African Development Bank – may scale up public and private investment to regions that need it to make the SDGs a reality, like so many of you have supported.
This decentralization may drive us towards open regionalism, to what the Secretary-General of the United Nations has called “networked multilateralism” and to what I have started to call “poly-globalization”, as a form of more inclusive globalization.
And yet, there is indeed a major risk. And the risk is that, instead of decentralization, we will walk toward fragmentation. To decentralize is not to replace the centre, but to expand it.
And for that, we must ensure more coordination not less and ensure that universal things remain universal, like only the United Nations and its General Assembly are. That is why the reform agenda of the Security Council, the peace and security pilar, the governance of AI and the International financial system presented by the Secretary-General at the Summit of the Future are so central to the discussions we are having here today.
We also need the IMF and the World Bank to be larger, stronger and better so they can act with the speed and the scale that is needed and that frankly we don’t have now. We really need a Global Financial Safety Net and an effective debt restructuring mechanism. And we need a trade system based in internationally agreed and enforceable rules of the game as many of you had said. In an era of rising protectionism and industrial policies, the South cannot compete on a subsidies race, since they simply don’t have the fiscal space to do it, or to support what Norway and the AU said about the "spaghetti bowl" of climate regulation.
This will require, no doubt, deep reforms. The governance of the Bretton Woods institutions, based on GDP quotas is outdated and out of step even according to its own methodology.
At their foundation, the boards of the IMF and the World Bank had 12 seats for a total of 44 countries. Today, each board has 25 seats representing 190 countries. If the original proportion were maintained, these bodies would now have 52 seats. I am not advocating for doubling the board’s seats but giving some perspective to the problem of representation.
Those absences, those missing voices, diminishes us all. We lose untapped ingenuity, fail to grasp perspectives critical to wise judgment and risk solutions as narrow as the viewpoints that conceived them.
These are reforms that must be assumed with urgency and wisdom. If the G20 agrees on them, they can be done – we have to start here! They are the key to ensuring that we do not fracture under change.
Thank you.
