Jomo Kwame Sundaram
Growing global interdependence poses greater challenges to policy makers on a wide range of issues and for countries at all levels of development. Yet, the new mechanisms and arrangements put in place over the past four decades have not been adequate to the growing challenges of coherence and coordination of global economic policy making. Recent financial crises have exposed some such gaps and weaknesses.
Multilateral UN inclusive
Although sometimes seemingly slow, the United Nations (UN) has long had a clear advantage in driving legitimate discussion on reform because of its more inclusive and open governance. Lop-sided influence in the current international financial system is a principal reason why many countries lack confidence in existing arrangements. Rebuilding confidence in such arrangements will require that all parties feel they have a stake in the reform agenda.
But the UN is also suited to drive the discussion because of its long tradition of reliable work on international economic issues. The UN secretariat has developed and maintained a coherent and integrated approach to trade, finance and sustainable development, with due attention to equity and social justice issues.
The ongoing ‘secular stagnation’ has again highlighted the interdependence of global economic relations, exposing a series of myths and half-truths about the global economy. These include the idea that the developing world has become “decoupled” from the developed world; that unregulated financial markets and the new financial instruments had ushered in a new era of “great moderation” and “stability”; and that macroeconomic imbalances — due to decisions made in the household, corporate and financial sectors — were less dangerous than those involving the public sector.