Friday 17 June - 1150-1250
Will the overlap between new and existing international institutions boost or threaten the global economy?
How can senior ministers manage the overlapping jurisdictions for trade, investment and financial regulation between established and new institutions, including the IMF, the New Development (BRICS) Bank and the Asian Infrastructure Investment Bank? What are the consequences of failure and what are the opportunities from successful cooperation?
In this session, the panel explored the role of international financial institutions, particularly the IMF, in achieving sustainable growth and macroeconomic stability.
Despite their failings, the panel agreed that many of the post-War international financial institutions will continue to play a central role in the international system in the future, despite the rise of alternative regional financial organizations. However, institutions such as the IMF need to undergo considerable reform in order to achieve a legitimacy that they have been lacking over the decades.
Over the past 70 years, corruption has had major implications for economic growth and development. Furthermore, some members of the panel argued that a lack of a representative decision-making process in these organizations has led to the emergence of new regional financial organizations between countries with shared interests such as the development of the Asian Infrastructure Investment Bank.
The panel also discussed the global financial crisis, the rise of India and China in the international system and also the importance of developing gender-inclusive economic development.
‘The IMF will continue to be an anchor in the international system [in the future].’
‘There are countries who are opening up sub-groups...because they have something in common, like the BRICS bank. One of the reasons the BRICS bank took this step is the perception that they didn’t have adequate representation in the IMF.’
‘The world has changed since the architecture put in place 70 years ago [and] these organizations have been difficult to reform.’
‘The most effective response in the aftermath of the financial crisis was national politicians coming together and breathing fresh life in what had been a sleepy talking shop.’
‘The big challenge we have now is that the statesmanship and foresight that we had in 1944-45 is sorely lacking today.’
‘There was a sense that those who were at the high table 70 years ago were not going to make room for others. From our point of view, coming from a country like India, we know well that you’re either at the table or on the menu. 70 years on, with a lot of changes in the global economy and global geopolitics, some of the rule-takers are ready to take part in the rule-making.’