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Multilateral system need fundamental overhaul - Zoellick
Accra, Oct.10, Ghanadot/GNA - The way the world tries to
solve its economic problems needs to be rethought amid
today's global crisis, including turning the Group of Seven
into a Steering Group that empowers rising economic states,
World Bank Group President Robert B. Zoellick has said.
Referring to the upcoming U.S. election, Mr Zoellick said
the new president would have to move beyond "the firefight
of financial stabilization" to address the "economic
aftermath"; saying that whoever won the White House should
work with others in modernizing the multilateral system as
there needed to be a greater shared responsibility for the
health and effective functioning of today's global economy.
" The G-7 is not working. We need a better group for a
different time. For financial and economic cooperation, we
should consider a new Steering Group including Brazil,
China, India, Mexico, Russia, Saudi Arabia, South Africa,
and the current G-7," Mr Zoellick said in a speech to the
Peterson Institute for International Economics in Washington
D.C.
A release from the World Bank Office in Accra said Mr
Zoellick was speaking ahead of the Annual Meetings of the
World Bank Group.
He said the new Steering Group should be more than just
replacing the G7 with a fixed-number G14, as this would be
using old world methods to remake the new. The Steering
Group should evolve to fit changing circumstances, including
new emerging powers, while serving as a network for frequent
interaction. "We need a Facebook for multilateral economic
diplomacy," Zoellick said.
Warning about the effects of the financial crisis, Zoellick
said: "The events of September could be a tipping point for
many developing countries. A drop in exports, as well as
capital inflow, will trigger a falloff in investments.
Deceleration of growth and deteriorating financing
conditions, combined with monetary tightening, will trigger
business failures and possibly banking emergencies. Some
countries will slip toward balance of payments crises. As is
always the case, the most poor are the most defenseless."
The former U.S. Diplomat, Trade Negotiator and Financial
Executive said economic multilateralism needed to be
redefined beyond its traditional focus on finance and trade.
Energy, climate change, and stabilizing fragile and
post-conflict states were economic issues and not just part
of the global dialogue on security and the environment.
Mr Zoellick said the New Multilateralism must give an equal
value to development as to international finance otherwise
the world would remain an unstable place. But the aid system
was not working well enough and it needed to move much more
quickly and effectively to help those who were most
vulnerable when crisis hits.
The World Bank Group also needs reform. Mr Zoellick
announced the creation of a High Level Commission under the
leadership of former Mexican President Ernesto Zedillo to
consider modernizing the governance of the World Bank Group.
Turning to multilateral trade talks, Mr Zoellick said the
Doha round "has hit the rocks" and countries should
therefore consider trade facilitation as another way of
cutting the costs of trade, adding "here are opportunities
to cut costs of trade far in excess of those imposed by
tariffs and other trade barriers".
Describing world energy markets as "a mess", Zoellick called
for a "global bargain" between energy producers and
consumers. Both sides could share plans for expanding
supplies, improving efficiency and lessening demand;
assisting with energy for the poor; and considering how
these policies related to carbon production and climate
change policies.
"There could be a common interest in managing a price range
that reconciles interests while transitioning toward lower
carbon growth strategies, a broader portfolio of supplies,
and greater international security," Zoellick said.
He said the World Bank Group was developing Energy for the
Poor initiative with a number of donors to help the poorest
countries to meet energy needs in efficient and sustainable
ways.
GNA
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