“The international financial architecture, designed in 1945 after World War II, is undergoing a stress test of historic proportions – and is failing,” the UN argues. Secretary-General António Guterres in a 2023 policy note.
He points out that unsustainable debt levels are putting many poor countries in dire straits, preventing them from investing sufficiently in key development areas such as social protection and health care.
Goals missed
The need for reform has become even more urgent with the fast-approaching deadline to achieve the goals. Sustainable Development Goals that the Agenda 2030 for Sustainable Development, established to set measurable goals for building a better future by the end of the decade.
The goals were adopted by UN member states in 2015, meaning that the halfway point will be reached in 2023. The milestone was reached last September SDG Summitwhich was intended to give the goals a much-needed boost, while official UN statistics indicated that only 15 percent of the goals had been met.
A new Bretton Woods?
In his policy note, the UN chief lays out proposals that could enable countries to lift their citizens out of poverty and reach their full potential, and calls for a “new Bretton Woods moment,” a reference to the groundbreaking post-World War II international agreement that led to the creation of the International Monetary Fund (IMF) and the World Bank, organizations that determine how and under what conditions money is lent to countries in need of financial assistance.
The context in which the IMF and the World Bank were established is virtually unrecognizable from today’s political and economic environment. For starters, there were only 44 delegations present, compared to the current IMF membership of 190 countries. Yet developed countries continue to exercise veto powers and excessive voting rights, while developing countries remain underrepresented.
The system, Mr Guterres said, is now “wholly unfit for purpose in a world characterised by persistent climate change, rising systemic risks, extreme inequality, persistent gender bias, highly integrated financial markets vulnerable to cross-border contagion, and dramatic demographic, technological, economic and geopolitical changes.”
The answers, the UN chief said, include increasing financing to eradicate poverty and support sustainability, making the key decision-making bodies of the IMF and World Bank more democratic and representative, and creating a new, overarching body to coordinate global economic decisions, with the power to act as an “Economic Security Council“.
WHO/Diego Rodriguez
Everyone has the right to a healthy living environment, free from pollution and its harmful effects.
A pact and a promise
The proposals in the policy document and the commitments made at last year’s SDG Summit will form the basis for a series of discussions to be held at the SDG Summit. Top of the futurean important conference taking place at the UN headquarters at the end of September.
They will also be reflected in the Pact for the futurea document to be adopted by UN member states at the summit, which contains the following content: according to António Guterresa pledge by all countries to “use all resources at their disposal at the global level to solve problems – before those problems overwhelm us.”
Under the pact, signatory countries commit to taking “bold action” to implement the 2030 Agenda for Sustainable Development, with a particular focus on ending hunger and poverty, reducing inequalities and raising ambition to tackle climate change.
The summit will build momentum for the International Conference on Financing for Development (Ffd4), which will take place in Spain in June 2025.
