UN Secretary-General Antonio Guterres on Sunday stated that the time has come to update both the Security Council and Bretton Woods to reflect “the realities of today’s world.”
The Group of Seven summit meeting was held in Hiroshima, Japan, where Guterres argued both institutions needed to be upgraded because they still reflected the power dynamics of 1945.
“The global financial architecture became outdated, dysfunctional, and unfair,” he said. “In the face of the economic shocks from the Covid-19 pandemic and the Russian invasion of Ukraine, it has failed to fulfill its core function as a global safety net.”
According to the UN Charter, the Security Council has primary responsibility for maintaining world peace and security. In some situations, it can impose penalties or provide the go-ahead for the use of force. It consists of ten non-permanent members, each of whom has one vote, and five permanent members, namely China, France, the Russian Federation, the United Kingdom, and the United States.
The G7 conference, according to Guterres, saw a rising awareness among poor nations that not enough was being done to update antiquated institutions or “remove the frustrations” of the Global South.
The International Monetary Fund predicted in its World Economic Outlook published in January that India’s economy will expand by more than 6% this year and the following year.
As per Pierre-Olivier Gourinchas, the director of the research department at the IMF and chief economist, China, and India would collectively account for roughly 50% of global growth in 2023.
According to the IMF, the economic influence of the affluent G7 has decreased over the past 30 years, with their share of world GDP falling from 50.7 percent in 1980 to 29.9 percent in 2023.
“We will see now what is the impact of the discussions that were held here in Hiroshima,” Guterres said. “The G7 members were able to discuss with some of the most important emerging economies in the world.”