Brown calls for shakeup of world order

Updated: 2008-01-22 07:34

 

Indian Vice-President Hamid Ansari (right) presents an honorary doctorate from the University of Delhi to British Prime Minister Gordon Brown in New Delhi, India, yesterday. AP

British Prime Minister Gordon Brown called yesterday for an overhaul of global institutions to counter financial crises, deal with new priorities such as climate change and recognize the rise of new powers like India.

In a wide-ranging speech, he said the international institutions formed after World War II, such as the United Nations, World Bank and International Monetary Fund (IMF), had to be radically reformed to fit the new, globalized world.

"I see a world that harnesses for the common good the growing inter-dependence of nations, cultures and peoples - a new global society," he said in a speech to business groups in New Delhi.

Brown is on an official visit to India drumming up support for business with the growing economic powerhouse, which is also increasingly playing a more important diplomatic role in Asia.

He said he supported India's bid to become a permanent member of the UN Security Council, where Britain, China, France, Russia and the United States have wielded exclusive veto power since 1945.

And he called for changes to the IMF, World Bank and the Group of Eight leading industrial countries to reflect the rising economic clout of India and Asia in general.

Brown proposed turning the IMF into an independent watchdog that would form the heart of a global early warning system against financial turbulence.

He suggested there should be rapid response teams of police and experts that could move quickly to restore order and begin rebuilding after conflicts.

He called for a new UN crisis prevention and recovery fund and for a multi-billion-dollar global climate change fund within the World Bank to finance environmentally sustainable development in the poorest countries.

He said Britain would play a leading role in efforts to speed up nuclear disarmament "and to ultimately achieve a world freer from nuclear weapons".

London would also press for early agreement on a new international system to help non-nuclear states acquire new sources of energy, he said.

Brown believes the rapid spread of the credit crisis last year, after problems with US sub-prime mortgages, points to failings in global financial supervision which must be fixed.

"I propose that the IMF should act with the same kind of independence as a central bank in a national country," he said.

"It should make its focus the surveillance of the global economic and financial system. Its role should be to prevent crises and not simply to manage or resolve them as in the past," said Brown, nearing the end of a four-day trip to China and India.

"The IMF, working with the global Financial Stability Forum, should be at the heart of ... an early warning system, involving regulators and supervisors in all countries, for financial turbulence affecting the global economy," he added.

The Financial Stability Forum groups central banks, regulators and international bodies.

He also said the IMF should develop a financial instrument to insure "well-managed economies against sudden reversals of capital flows" but gave no details.

The credit crunch claimed a high-profile casualty in Britain when mortgage lender Northern Rock suffered the country's first bank run in more than a century last year.

Agencies

(China Daily 01/22/2008 page12)