India feels very strongly that there is a clear need for an expansion of the Security Council in both categories — permanent and non-permanent. But it also sees the Security Council as part of a broader process of renewing the United Nations. Like many developing countries, India would like to see the General Assembly strengthened as the primary intergovernmental legislative body, which it is not yet; it has become too often a rhetorical forum, prone to declaratory effulgences without effect, rather than one which acts as a legislative body driving the action of the UN organization. The UN’s Economic and Social Council too should become a more meaningful development-oriented body, and a serious instrument of development governance. A greater sharpening is also required in the focus and the operational efficiency of the UN funds, agencies and programmes, whose effectiveness is so important for so many of the world’s vulnerable and developing people.
India is conscious, too, that the international financial institutions set up at Bretton Woods in 1944 are also in need of reform, since they too reflect the realities of a vanished era: Belgium, for instance, disposes of the same weighted vote as China in these institutions. The G20 summit in Pittsburgh in September 2009 set in motion a process for global redesign of the international financial and economic architecture, and is thus emerging as the premier forum for international economic cooperation. The G20 has become a meaningful platform for North— South dialogue precisely because the South is not completely outweighed by the North in the composition of the G20. India will use its position in this grouping to pursue a long-term objective of broad parity between the developed countries and the developing and transition economies in the international financial institutions.
This is reflected in the Pittsburgh summit decision to reform the Bretton Woods institutions, the creation of a mechanism for G20 experts to address regulatory reform, and plans to shift decision-making power (5 per cent of the IMF quota share and 3 per cent of the World Bank’s voting power) from the developed world to the developing and transition economies. Nations like India, Brazil, Russia and China have called for higher figures—7 per cent of the IMF quota share and 6 per cent of the World Bank’s voting powers — to be transferred. India has already established itself as a key player in the G20, where Prime Minister Manmohan Singh is a notably influential voice, and this institution — or a variant of it, such as a smaller ‘G13’ being touted in some circles as an alternative to both the G8 and the G20—could well prove a more valuable mechanism for international impact in the long term than the United Nations.
It certainly seems incontestable that the recent global financial crisis showed that the surveillance of risk by international institutions and early warning mechanisms are needed for all countries. In other words, it is important that, in the context of global governance, the developing countries should have a voice in overseeing the global financial performance of all nations, rather than it simply being a case of the rich supervising the economic delinquency of the poor.
India also has an evident interest in continued economic liberalization worldwide, which it needs to support overtly and actively, given its stake in freer global trade across the board in goods and services. This means that India would need to start taking more explicit positions in bilateral and multilateral forums in favour of keeping the world economic order open, and play an active role in ensuring such an outcome. New Delhi should, out of self-interest as well as principle, play to its own strengths by advocating liberalization in transnational labour flows, not just capital flows. It has been suggested that India should also take a lead in proposing innovative totalization agreements and tax treaties that would permit the movement of labour and human capital. Under the UPA government, India has energetically pursued global cooperation on issues of bank transparency, money laundering and the oversight of tax havens. This has obvious domestic benefits as well as international ones. Another area of domestic importance with international implications is that of FDI into India, which is currently lower than outward investments by Indian companies abroad. It is essential for India to undertake the domestic reforms necessary to attract and retain FDI; this implies vigorously pursuing the domestic economic reform agenda that many observers currently see as stagnating. All of these initiatives will make New Delhi a more credible and effective player in the Bretton Woods institutions and the WTO. India’s interest in the idea of a ‘BRICS Bank’, floated at that grouping’s New Delhi summit in 2012, is an indication of its willingness to challenge global economic assumptions, all of which are currently West-centric.
A reform package that incorporates both Security Council and Bretton Woods reforms could transform global governance, whereas failure to reform could doom it. The international system — as constructed following the Second World War — will be almost unrecognizable by 2030 owing to the rise of emerging powers, a transformed global economy, a real transfer of relative wealth and economic power from the West, or the North, to other countries in the global South, and the growing influence of non-state actors, including terrorists, multinational corporations and criminal networks. In the next two decades, this new international system will be coping with the issues of ageing populations in the developed world; increasing energy, food and water constraints; and worries about climate change and migration. Global changes, including India’s own transformation, will mean that resource issues — including energy, food and water, on all of which demand is projected to outstrip easily available supplies over the next decade or so — will gain prominence on the international agenda.
The need for increased, more democratic and more equitable global governance will therefore be even greater. Let us look even further than the next two decades. Growth projections for Brazil, Russia, India and China indicate they will collectively match the original G7’s share of global GDP by 2040–50. All four, probably, will continue to enjoy relatively rapid economic growth and will strive for a multipolar world in which their capitals are among the poles.
The experts tell us that, historically, emerging multipolar systems have been more unstable than bipolar or unipolar ones. The recent, indeed ongoing, global financial crisis underlines that the next twenty years of transition to a new system are fraught with risks. Global policy-makers will have to cope with a growing demand for multilateral cooperation when the international system will be stressed by the incomplete transition from the old to the new order. And the new players will not want to cooperate under the old rules.
The multiplicity of actors on the international scene could, if properly accommodated, add strength to our ageing post — Second World War institutions, or they could fragment the international system and reduce international cooperation. Countries like India have no desire to challenge the international system, as did other rising powers like Germany and Japan in the nineteenth and twentieth centuries. But they certainly wish to be given a place at the global high table. Without that, they would be unlikely to volunteer to share the primary burden for dealing with such issues as terrorism, climate change, proliferation and energy security, which concern the entire globe.