June 16, 2024
World Economy

Lavrov urges creation of new Global Economic Governance entities

Global financial institutions of the Bretton Woods System are becoming a relic of the past, new entities should be created which would rely on mutual gain and interests, Russian Foreign Minister Sergei Lavrov said in Rio De Janeiro, Brazil.

“The democratization of the Global Economic Governance system, certainly, also needs new entities which from the start are focused on consensus and mutual gain. We are now seeing a positive dynamic of such organizations being strengthened. Among them are the BRICS [Brazil, Russia, India, China, South Africa], SCO [Shanghai Cooperation Organization], ASEAN [Association of Southeast Asian Nations], the African Union, the Arab League, CELAC [Community of Latin American and Caribbean States], and the EAEU [Eurasian Economic Union],” Lavrov said at a G20 foreign ministers’ meeting on the reform of global governance.

“Keeping the Global Economic Governance system efficient is an invariable priority of the Group of 20’s work,” while the “rising global threats and challenges are highlighting the need to reform the current multilateral architecture no longer reflective of contemporary realities,” he said.

“Recent years have seen a marked intensification of the formation process of a fair, multipolar world order devoid of an explicit center and periphery,” Lavrov said.

“Asian, African and Latin American states are becoming actors in their own right in world economy, often setting its tone and dynamic. In 2023, the BRICS’ share in the world’s GDP by Purchasing Power Parity increased to 35% and exceeded the G7’s (30.3%). According to the latest IMF [International Monetary Fund] forecasts, the rates of economic growth in emerging markets will surpass the worldwide average (3.1%) to reach 4.1% in 2024 and 4.2% in 2025. Against this backdrop, many Western economies, especially European, are effectively in stagnation. These are the statistics of the same Western-curated institutions: the IMF, the World Bank, the OECD [Organization for Economic Co-operation and Development],” Lavrov said.

“These institutions are turning into artifacts of the past. Already the West’s dominance is affecting their ability to keep up with the demands of time, whereas today it is absolutely clear that the only way to overcome humankind’s current problems is through a consolidated basis, with due regard for the interests of the Global South and the entire totality of global economic realities,” he said.

Regrettably, “the ongoing work of reforming global governance institutions is stalling,” he said.

“Western countries are seeking to retain their domineering positions. The United States is not ready to part with its blocking package and status as the main shareholder of the IMF. Washington is sabotaging the implementation of the G20’s 2010 agreements to ensure a more representative participation of developing nations in multilateral mechanisms. As a result, the Bretton Woods institutions are turning from being professional formats into a venues for score-settling and sponsoring the ‘political clientele’ of the West in detriment of the development prospects of the Global majority countries,” Lavrov said.

This year Russia is presiding in the BRICS, he said.

“A whole host of new members has been added to this format. We will facilitate, in every way possible, the strengthening of this entity’s potential and its relations with the G20. In this context, we welcome the initiative of our Brazilian friends to invite representatives from the New Development Bank to G20 events,” Lavrov said.

At the G20 summit in New Delhi, the participants spoke unanimously in favor of a “broader representation and stronger voice of developing nations within international economic and financial institutions. We assume that this time around these are not hollow words but an obligation to proceed to practical activities,” Lavrov said.

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