Former UN Under-Secretary-General makes case for constiuency-based global monetary system
A former candidate to lead the World Bank, Jose Antonio Ocampo, issued a public address at the CIGI Auditorium to set out his vision for a constituency-based global monetary system.
Ocampo’s keynote, titled The Global Monetary Non-System, was the opening event for CIGI’s annual conference, CIGI ’12 — Five Years After the Fall: The Governance Legacies of the Global Financial Crisis. The conference convened some of the world’s top thinkers on the global economyand the challenges related to the continued fallout from the global financial crisis, and ran from November 9 to 11 at the CIGI Campus.
The Columbia University professor began by summarizing the history of the global economy from the bimetallic standard to the establishment of the Bretton Woods system of fixed exchange rates, before moving to the events that led to the 2008-2009 global financial crisis and the 2012sovereign debt challenges of the euro zone. Ocampo, a former United Nations’ Under-Secretary-General for Economic and Social Affairs, continued by outlining the four major problems that any reforms to the global monetarysystem must address: the asymmetrical adjustments that have occurred since the start of the euro zone crisis; the cyclical dangers of having a single national currency as the global reserve currency; the hurdles faced by major emerging economies forced to rely on insufficient financing from the International Monetary Fund (IMF), which also comes with restrictive conditions; and the trade surpluses of oil-exporting countries.
As an alternative to the current “non-system,” Ocampo suggested moving to a constituency-based system that would see the G20 institutionalized. He said this could be done “around the UN system, but not dependent on the UN,” citing the examples of the IMF and World Bank.
Following his lecture, Ocampo joined Steve Paikin, TVO anchor and senior editor, for a wide-ranging question-and-answer session that covered the recent US election and that country’s impending “fiscal cliff,” the increasing role of multilateral development banks, and the ability of Canada and other commodity-rich nations to avoid the worst of the financial crisis. Paikin specifically asked Ocampo about the general public’s waning faith in international financial institutions such as the IMF and World Bank, in the face of continued global strife. “The European crisis is not helping in that regard,” Ocampo stated.
Asked if the G20 model was too unwieldy to form the foundation for his constituency-based model, Ocampo replied that the size of the membership is not the problem, but how the membership is selected. He added, “You have to organize representation, not deny representation.”