By Vijay phanshikar
In the past some years, countries like India have often questioned the wisdom of the present global structure that actually keeps power concentrated in just a few hands in a wide spectrum of activities.Washington, October 15 (PTI): Facing the twin tasks of fighting the coronavirus pandemic today and building a better tomorrow, the world is experiencing a new Bretton Woods moment, International Monetary Fund (IMF) Managing Director Kristalina Georgieva said during her address to the annual meeting of the IMF’s Board of Governors. What was true at Bretton Woods, when allies at the end of World War II gathered for a conference to create the institutions that would use economic cooperation to prevent future conflicts, remains true even today. “...We face a new Bretton Woods moment. A pandemic that has already cost more than a million lives. An economic calamity that will make the world economy 4.4 % smaller this year and strip an estimated USD 11 trillion of output by next year. An untold human desperation in the face of huge disruption and rising poverty for the first time in decades,” she said.
THE recall of the historic Conference at Bretton Woods in New Hampshire, US, way back in 1944 as a reminder of the task of reconstruction of global economy and fightback against the coronavirus pandemic and poverty of unprecedented scale, is appropriate in more ways than one. The world really needs such an effort once again -- in the manner, method and spirit of Bretton Woods where representatives of many countries sat down to discuss the framework of how to provide economic succour to the world reeling under the World War II that was still raging.
A welcome outcome of the Bretton Woods meet was the establishment of the International Bank for Reconstruction and Development (IBRD) that became subsequently a part of the World Bank Group and the International Monetary Fund (IMF). These institutions served a great global purpose at a time when hopes of a revival were fading rapidly all over the world.
Even as the World War II was at its ugliest peak, a few world leaders like British Prime Minister Sir Winston Churchill and United States President Mr. Franklin Roosevelt realised the need to initiate the process of building back a better tomorrow after the devastation of the war. They started their thought-process as early as in 1941 and offered a foundation for the Bretton Woods decisions.
It is only natural that at this current juncture, the Bretton Woods moment comes back up in human memory. The world once again needs a fresh look at what can be done for the reconstruction of the global economy in multiple layers -- so that possibilities of future conflicts are reduced in a big way. For, the predictions of the coronavirus damage to the world economy are nerve-shattering, to say the least, and the world may not know how to face the scourge of extreme poverty whose scale had never been imagined before.
If, therefore, this is one point in time to remind us of what Ms. Kristalina Georgieva calls Bretton Woods moment, this is also the point where we should pause in all seriousness to consider what actual purpose will just a replication of framework by those standards serve for the world. No matter the purpose the institutions such as the World Bank and the IMF have served over time, there are several grey areas in the global economic order needing a complete redefinition and reinvention.
The world has noticed time and again that many of the global financial and economic institutions like the IMF and the World Bank have been unfairly abused by a few countries who shouldered the big burden of funding their operations. The world has not missed the abuse of institutions such as the United Nations, too, at the hands of a few powerful countries that blocked the passage of other countries into the decision-making infrastructure for better benefit of the world.
In the past some years, countries like India have often questioned the wisdom of the present global structure that actually keeps power concentrated in just a few hands in a wide spectrum of activities. Even though the World Bank is known to have a lot of difference to changing the economic profile of a lot of regions and countries, there are quite a few questions that still remain unanswered.
If the powers that be contemplate revival of the spirit of Bretton Woods, then, they will have to rethink the model in absolutely novel terms unaffected by the undesirable shadows of the institutions created in the time immediately after World War II. If this need of the time is recognised and worked upon, then what the IMF Managing Director talks of as a Bretton Woods moment would serve its stated purpose. But if certain powers that be will still feel inclined to treat the new institutions or systems as the tool in their hands to serve THEIR purpose, then the effort will be futile for the larger world.
The Bretton Woods Conference was not just a meeting with cosmetic intentions. Much to the contrary, it was an attempt to face a massively and rapidly changing world bogged down by violence and malevolence. The subsequent creation of the series of global institutions, though chiefly dominated by the United States and its allies -- with certain participation of other political segments -- did lead to a better world order. It must be admitted that the attempt did reduce possibilities of conflict to certain extent and also provided economic support to regions and countries reeling under poverty of resources.
If a new Bretton Woods moment is being brought up now, it will have to be approached with wider global concerns sans the trappings of power of handful of nations that dominated the post-World War II world. And this is not just an expression of utopian wish, but of an expectation of a world in need.