The changed global economic equation with the rise of developed countries calls for redistribution of power through the reform of international financial institutions and the Security Council, according to Secretary-General Antonio Guterres.
UNITED NATIONS — The changed global economic equation with the rise of developed countries calls for redistribution of power through the reform of international financial institutions and the Security Council, according to Secretary-General Antonio Guterres.
While the global institutions are set in the power scenario of several decades ago, "the world is changing, and we are seeing the emergence of new powers", he said at a news conference here.
"So, there must be a redistribution of power", he said, and "essential in this redistribution of power is the reform of multilateral institutions".
"If there are two multilateral institutions where this reform is essential, it's the Security Council and the Bretton Woods system", he said.
The Bretton Woods system -- named for the place in New Hampshire where an international conference on the post-World War II monetary issues was held in 1944 created the framework for institutions like the International Monetary Fund (IMF) and the World Bank.
Describing the changes to the economic scenario since then, Guterres said, "Every single day the percentage of developed countries (share) in global GDP diminishes a little bit, and every single day the percentage of emerging economies (share) in the global GDP increases a little bit".
"So, there is a change in what is the relative weight of countries in the world is today in relation to what it was when these institutions were created", he said.
His point is illustrated by China leapfrogging to the second place after the US in the rankings according to the Gross National Product (GDP), according to IMF data.
And India is poised to regain fifth place when it again moves ahead of Britain.
Even among the industrialised nations, there has been a reordering of rankings after Germany and Japan rose from the ashes of World War II to reach the third and fourth ranks in the GDP tables.
Yet at the IMF, China's voting power is only 6.08 per cent, behind the US and Japan, and India is at the seventh spot with only 2.63 per cent.
"The way power is distributed and power is used in our world does not allow multilateral institutions to act effectively", Guterres said.