Rethinking Bretton Woods | Wed, Nov 12, 2008
Why G20 summit stirs few hopes of real reform
Published: November 12 2008 02:00 | Last updated: November 12 2008 02:00
From Mr Aldo Caliari.
Sir, Does it really come as a big surprise that the level of ambition for the November 15 summit of Group of 20 leaders is so low? (“Don’t bank on Bretton Woods II, says IMF chief”, November 8.) It should not.
We only need to look back at what came out of the last time leaders of rich countries talked about a “new global financial architecture”, in the late 1990s. The response conveniently underscored changes to the domestic financial structures of developing countries, rather than to those of developed countries or the gaps and dysfunctions of global institutions. Unless a much more inclusive approach is followed, giving an institutional platform for the voice of all developing countries, it is unrealistic to expect better results this time.
Fortunately, such a platform is available. Only two weeks after the summit, leaders of the world will meet in Doha, Qatar, to review progress in implementation of the 2002 International Conference on Financing for Development. Reform of the international financial system is a key item on the agenda. Indeed, the current draft outcome document contains a breakthrough call for a major review of the “international financial and monetary architecture, and global governance structures”. The basis for the review is the 2002 Monterrey consensus, whose pertinent chapter constitutes the first north-south multilateral consensual framework for reform of the international financial system.
The Doha review clearly provides a much better forum to launch a long-term discussion on reform, one that gives some voice to the poor and vulnerable and that garners the broadly based knowledge, ownership and political support that needs to be behind such reform.
Only something with such multilateral roots deserves to be called “Bretton Woods II”, and G20 leaders meeting in Washington should use the opportunity to lend their support to it.
Rethinking Bretton Woods Project,
Center of Concern,
Washington, DC, US
Copyright The Financial Times Limited 2008