Article - Vladimir Kvint: It’s Time for a G-25

From worldpolicy.org
March 27th, 2009
The leaders of major countries are in agreement on the need to respond quickly and cohesively to the current global economic crisis. But while developed nations are experiencing tremendous slowdowns, emerging market countries are still expected to achieve gross domestic product (GDP) growth rates of 2.5 percent to 3 percent, on average.

In this global downturn, can emerging market economies can be the locomotives of the world’s marketplace?

Perhaps. But only if the global community substantially changes the current organizational structure of the global economic order to allow these new and dynamic economies to assume greater responsibilities commensurate with their greater roles.

Today, there are only three major multilateral Bretton Woods institutions still in existence: the World Bank, the International Monetary Fund (IMF), and the World Trade Organization (WTO). This is not enough.

In 1944, these organizations were created as multilateral bodies, bringing together the biggest economies of the time. But, with the birth of emerging markets, the economy is now global. New rules and practices are needed. The global marketplace needs new global ratings agencies, global crisis monitors, and monetary and financial instruments for global regulators.

Political and business leaders have attempted to determine which individuals and authorities should be held accountable for not ringing the alarms at the first hint of the current financial crisis. Some point to the IMF—but it is only a fund, not a ratings group, and certainly not a crisis monitoring agency.

Read the full article at worldpolicy.org