Reforming global governance institutions the Indian way

Multilateralism has not failed; it is the governments of nation states that have miserably failed to carry out the ethos of multilateralism.

By Avilash Roul
Published: Monday 13 March 2023
Reforming global governance institutions the Indian way
Photo: G20 India / Twitter
Photo: G20 India / Twitter

The Indian Prime Minister, in a video message last week to foreign ministers of the inter-governmental gathering of Group of 20 countries or G20, said “multilateralism is in crisis” and “global governance has failed”. The same week, a historic United Nations ocean governance instrument emerged in New York.

Later, India’s external affairs minister, while presiding over the first session of the G20 meeting, placed the central responsibility on the gathering of the G20 foreign ministers to reform the edifice of multilateralism, that is the United Nations and especially targeting the UN Security Council (UNSC).

Has global governance failed in this prevailing chaotic world politics? Or, is present multilateralism blocking the pathways to achieve aspirations of new India as an individual country to become the global power centre? Or does the ruling political leadership merely wish for India to get world attention? 

India has immediately changed the focus from G20 to bilateralism as there were no unanimous declarations from the meetings of finance and foreign ministers.

It has been, however, frequently observed that the leading world powers have bypassed, bulldozed, bullied or even boycotted the multilateral edifices in which they are either founding members or active partners. 

Therefore, it is evident that multilateralism is not essentially at fault; it is the conflicting and contradictory aspirations of member countries, who have contributed in the making and evolution of multilateralism. 

Traditionally, the United States has been providing a major chunk to the annual expenditure of the UN and its agencies, the World Bank and other international or regional organisations. As a result, the leaders of these institutions hold offices or the institution's mandate is shaped by the whims and pleasures of the US and its Atlantic allies.

So no, multilateralism has not failed; it is the governments of nation states that have miserably failed to carry out the ethos of multilateralism.

So, how to put India’s clarion call in this G20 summit — to make ‘global decision making must be democratised if it has to have a future’— as a reasonable demand? It is a fact that most of the existing international organisations (IO) or intergovernmental institutions are post World War-II edifices created, led and now managed by western countries and their ideals. Most of them are neither geographically representative nor politically democratic institutions in the contemporary scenario.  

Let’s take the World Bank Group as an example here as the US has nominated / selected last month an Indian-origin US citizen, Ajay Banga, as the 14th president of the group.  

The minister of finance of Ghana and climate vulnerable 20 group (V20, now 58 members) chair, emphasised that “major reforms to the world’s international financial architecture are urgently needed to prevent the escalating climate crisis from overwhelming the global economy”. 

From Eugene Meyer as first president in 1946 to Banga in 2023, all the presidents are citizens of the US and nominated / selected by the US. Has India raised the issue of this nomination or selection to 189 member-based intergovernmental institutions as democratic? 

Without questioning the credibility of Banga, one must be questioning the process of selection of the president of the World Bank — a multilateral development bank (MDB). Why is there no open merit-based transparent contest or selection process to appoint the president? Can no person other than a citizen of the US be capable or credible for the role? 

The World Bank, an Anglo-American initiative from both sides of the Atlantic, mostly the brainchild of the US, was originally established in 1944 as the Bank for Reconstruction and Development (IBRD) and the International Monetary Fund (IMF), to support reconstruction in Europe after the devastation of World War II. 

As a longstanding practice since its inception, the US appoints its citizen as the president of the World Bank and Europe selects a European as the head of the International Monetary Fund (IMF). 

Similarly, Japan appoints a Japanese citizen as the President of Asian Development Bank (ADB) and China appoints a Chinese citizen as the President of the Asian Infrastructure Investment Bank (AIIB). The story of this convention never ends here.

It’s the shareholding capacity of the country that controls these multilateral edifices. In simple terms, one dollar one vote, and not one country one vote, is the unwritten guiding code in the decision-making process. 

As the largest shareholders — the US in World Bank Group / IMF, the Japan in ADB, China in AIIB — their respective voting powers are given more weightage than others in deciding loan amount, grants, policies, projects and direction of the institutions through their representatives as executive directors (ED) and their alternatives. 

In the 189-member World Bank, for instance, among 25 EDs, six countries appoint their own EDs according to their shareholding capacities and the remaining 183 countries appoint the remaining 19. 

As the single largest shareholder of the World Bank / IMF, with 16.5 per cent of voting power, the US mostly calls the shots in the Washington-based MDB. India has merely 3.01 per cent and China 5.61 per cent.

How then are these MDBs democratically representative of or democratically taking decisions in the Global South, which India claims to represent? India, without any hesitation or questioning the democratising decision-making process, has happily extended its support to the age-old tradition. 

Is not India initiating the 92-member International Solar Alliance and the 39-member Coalition for Disaster Resilient Infrastructure multilateral institutions? As per India, both are multilateral coalition of partners and doing well. 

India’s frustration with multilateralism or global governance emanates from raising the Kashmir issue frequently at UN General Assembly and human rights violations at UN Human Rights Council to no avail, stumbling blocks in listing terrorists and terrorist organisations in UNSC, China’s blocking of ADB projects and programmes in Arunachal Pradesh and a long list of snubbing at the global stage on multilateralism. 

In the same vein, one would ask India why the Climate Vulnerable 20 Group is breaking away from the G-77 + China or Association of Small Island States (AOSIS) to forge a powerful bloc in fighting climate change? India must not be entangled with Vasudhaiva Kutumbakam or One Earth, One Family, One Future as the theme of G20 or Ekatm Mannavvad while narrowly looking at multilateralism.       

If India’s Presidency of G20 rides on reforming global governing institutions or reforming multilateralism, it must not look into the UN to be reformed just by accommodating its representation in UNSC but all other western-led institutions. 

In addition, India, a mother of democracy as claimed by the government, must advocate and demonstrate democratisation of decision-making in the local, regional and national context within India, and not just global governance.

Views expressed are the authors’ own and don’t necessarily reflect those of Down To Earth.

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