Cape Town — While the London G20 Summit represented a step towards a more inclusive global governance system, further institutional reforms are badly needed to ensure the interests of low-income countries are adequately represented, according to national leaders and other participants gathered at this year’s World Economic Forum on Africa in Cape Town.
In particular, they urged the major industrialized countries to accept long-stalled changes in the governing structures of the IMF and the World Bank.
“A critical lesson from the current crisis is the need for a transformed global financial system,” Jacob Zuma, President of South Africa, said in his opening address. Reform of the so-called Bretton Woods institutions, he added, would “reflect changing economic realities and provide a voice for emerging and developing countries.”
The G20, Zuma noted, endorsed such reforms – which would increase the voting power of the lesser developed countries – in its communiqué following the London Summit. Now, he said, African and other developing world leaders will need to carefully monitor progress towards that goal, as well as the other objectives laid out in the communiqué, such as pledges from the major developed countries to meet their millennium development goals, shun additional protectionist measures and increase IMF and World Bank lending resources.
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However, the promised governance reforms face formidable institutional resistance, warned Kofi Annan, Secretary-General, United Nations (1997-2006); Member of the Foundation Board of the World Economic Forum; Co-Chair of the World Economic Forum on Africa.
“The countries that sit on the boards and have the bigger voice in the decisions being taken will have to reflect on how much they are prepared to give up to make the participation of the emerging nations and the poorer countries meaningful,” Annan said. “Speaking as someone who tried desperately to reform the UN Security Council, I can tell you that reform is difficult, but essential.”
While Annan praised the London Summit and the replacement of the G8 by the G20 as psychological recognition on the part of the major industrialized countries that the world has changed, others expressed a less positive view, arguing that the slow pace of reform is falling even further behind the shift in global economic and financial power.
“If I was keeping a scorecard, it would be a B minus or less,” said Ngozi Okonjo-Iweala, Managing Director, World Bank, Washington DC; Co-Chair of the World Economic Forum on Africa. To date, she argued, the steps taken and proposals made have largely promoted the interests of the larger, wealthier developing countries represented on the G20. “We need to make sure we have a global system in which our concerns as lower income countries are also reflected,” she said.
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Annan agreed: “I hope we will not ignore the needs of the poor, because if we do whatever system we create will not last long.”
More than 900 participants from 50 countries are participating in the 19th World Economic Forum on Africa in Cape Town from 10 to 12 June 2009 under the theme Implications of the Global Economic Crisis for Africa.
The Co-Chairs of the 2009 World Economic Forum on Africa are Kofi Annan, Secretary-General, United Nations (1997-2006); Member of the Foundation Board of the World Economic Forum; Soud Ba’alawy, Executive Chairman, Dubai Group, United Arab Emirates; Jiang Jianqing, Chairman of the Board, Industrial and Commercial Bank of China, People’s Republic of China; Graham Mackay, Chief Executive, SABMiller, United Kingdom; and Ngozi Okonjo-Iweala, Managing Director, World Bank, Washington DC.
