IFI governance

News

A global summit to reform the international financial system

Intelligence and responses towards a so-called "Bretton Woods 2"

22 October 2008


Notice: Undefined variable: briefing_cover in /var/www/web130/web/wp-content/themes/bretton-woods-project/library/template-fragments/article.php on line 70

Over the summer of 2008 pressure was already building in official circles for a new Bretton Woods-style international conference to restructure the international financial architecture. A Commonwealth summit in June produced a statement calling for such a conference. And the discussions on the draft document for the UN’s Financing for Development conference in Doha (slated for December 20008) also have included language calling for such a conference. Finally in early October, the calls were made publicly by leaders of several big European countries, notably France. This may be the greatest chance since 1944 to influence the structure of international finance. This page is aimed at helping civil society coordinate a response to this potential conference. We will bring you analysis, links to documents and highlight selected events. If you want to contribute just write to info@brettonwoodsproject.org.


Civil society moves

The IFI watching and debt activist communities and movements have launched a global sign-on letter to governments about the process for a new international financial architecture. The statement supports the fundamental and far-reaching transformation of the international financial and economic system and a major international conference convened by the UN to review the international financial and monetary architecture, its institutions and its governance, but only if the meeting follows a process that:

  1. is inclusive and participatory of all governments of the world;
  2. includes representatives from civil society, citizen’s groups, social movements and other stakeholders;
  3. has a clear timeline and process for regional consultations, particularly with those most affected by the crisis;
  4. is comprehensive in scope, tackling the full array of issues and institutions;
  5. is transparent, with proposals and draft outcome documents made publicly available and discussed well in advance of the meeting.

The deadline for signatories to this statement is Thursday the 13th of November. Please endorse the statement using the Choike website: http://www.choike.org/bw2/.

Also on the Choike website is a secondary statement suplementing the above with more concrete demands.

The main topics are:

  • To create a new set of principles in which finance should be aimed at, and linked to, strengthening national and local real economies to meet the requirement of sustainable and equitable development.
  • To move away from the market fundamentalism driving the recent past.
  • To curb the power of the World Bank, the IMF and the WTO, and to enhance the accountability of global, regional and national economic governance institutions.
  • A call for governments to take immediate action to develop a new international regulatory architecture with democratic checks and balances that is aimed at promoting the interests of workers, small-hold farmers, consumers, and the environment and preventing future financial crises, in which the United Nations should play a central role in its development.

Concrete suggestions include:

  • regulating derivatives
  • stopping speculation on staple food commodities
  • applying stricter international capital reserve requirements
  • a speculation tax on international transactions
  • closing tax havens
  • stronger transparency rules
  • A renegotiation by governments of the dozens of free trade agreements and bilateral investment treaties that currently ban governments from placing controls on capital flows and applying other sensible conditions to foreign investment and other financial transactions.

Several other NGO networks and movements have produced statements on the financial crisis and their demands for a reformed international financial architecture. These statements generally focus on the financial sector and financial markets. But it is expected that more will be forthcoming. If you have a statement you want included in this list please let us know.

The first week of November will see the release of two sign-on letters on the content of the reforms. One will be a global sign-on whilst the other will be addressed at the UK government

UK seminar on the financial crisis

On 28 October, more than 40 representatives of NGOs, development organisations, labour unions, think tanks, academia and the media came together in London to discuss how to take forward demands for a fundamental redesign of the international financial system. The main themes for the day were about creating a system that works to improve people’s live, reduce poverty, and protect the environment.

A seminar report as well as videos and presentations from the day can be found here. Keep coming back for updates on outcomes and further events.

Latest intelligence

Over the summer of 2008 pressure was already building in official circles for a new Bretton Woods-style international conference to restructure the international financial architecture. Since, there has been the UN’s Financing for Development conference in Doha (28th November to 2nd December) and the first G20 meeting on the issue (15th November). These events mark the start of the greatest chance since 1944 to influence the structure of international finance. For an analysis on the processes of reform read our most recent article ‘International financial architecture: clearing up the mess?’

Washington diverges from New York

For the G20 meeting Bush set the host location as Washington, spurning the offer from the UN general secretary to hold the conference at UN headquarters in New York. Only the G8 plus some emerging markets (like Brazil, India, China, Argentina, Turkey, South Africa, and Indonesia) and other rich OECD countries (like Australia and South Korea), as well as Saudi Arabia have been invited. The G8 statement which called for “key leaders” to be invited, made that it was not a truly international summit.

In contrast to the G8 moves, the president of the UN General Assembly has set up a high-level task force to review the global financial system, including major bodies such as the World Bank and the International Monetary Fund (IMF), in response to the current turmoil that is affecting all countries, large and small. Miguel D’Escoto has appointed Joseph Stiglitz to chair the panel, which will also suggest steps to be taken by UN members “to secure a more stable global economic order”.

If you have more intelligence you would like to share please do make it available.

Background

For more background on the calls for the new conference the best papers are the briefings produced by our colleagues in Belgium and Canada. See the following:

As of now the following people/forums that have announced support for the new international conference include:

  • Selected Commonwealth heads of state in the Marlborough House statement
  • Nicholas Sarkozy, president of France
  • Gordon Brown, UK prime minister
  • Angela Merkel, German chancellor
  • Commonwealth finance ministers in their October 8 statement
  • Ban Ki-Moon, Secretary General of the United Nations
  • Supachai Panitchpakdi, UNCTAD Secretary-General
  • UN Financing for Development (draft outcome document)

Additionally some governments and statements have expressed interest in something less comprehensive than a full international conference involving all countries and external stakeholders. For example:

  • The G8 statement of October 15 calls for a meeting of “key leaders”
  • Pascal Lamy, director-general of the WTO “welcome[d] the construction of what some are calling a new Bretton Woods consensus” according to Livemint/WSJ