PERSPECTIVE
The UN and the BWIs
How to promote policy coherence and coordination
for sustainable development
WERNER PUSCHRA AND SARA BURKE
May 2013
 Strengthening and reform of the institutional framework should not be an end in itself
but a means to achieve sustainable development. (The Future We Want)
 Even without a formal role in sustainable development many functions performed by the
BWIs – IMF’s macroeconomic guidelines, Article IV consultations, advice on tax, energy
and incentives policies, and research on inequalities and their economic and social effects;
the Bank’s new vision to end extreme poverty and promote shared prosperity – affect
development’s sustainability.
 A common perception in the BWIs is that ECOSOC’s overloaded and rigid schedule, too
many pre-prepared statements and little opportunity for real policy dialogue make it
unattractive as a forum for Ministers.
 Decades of incremental and stalled ECOSOC reform have taken decisionmaking capacity
on international economic and social policy away from the UN and are an obstacle to
effectively pursuing sustainable development through a reformed institutional framework.
 If we expect the proposed High Level Political Forum to achieve – rather than just discuss
– sustainable development, we would be wise to learn from what the G20 does right:
committing the necessary human and other resources to large amount of technical
preparation required for meetings where Ministers and Leaders can engage in candid
policy dialogue and take necessary decisions.
1. Introduction
There was unanimous agreement at the United Nations
Conference on Sustainable Development (Rio+20) that
the “strengthening and reform of the institutional
framework should not be an end in itself, but a means
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to achieve sustainable development.” One knows the
Bretton-Woods institutions (BWIs) can provide expert
advice on data, indicators and analysis; one imagines
they will be expected to take a role in financing
sustainable development. However, the question before
us is whether it is necessary to enhance their
involvement in a reformed institutional framework in
order to achieve sustainable development.
So far the BWIs have not had a formal role in the IFSD,
but many of the individual functions they perform
already are necessary for pursuing sustainable
development. The IMF’s production of macroeconomic
guidelines, its yearly Article IV consultations with
Members, its advice to countries on tax and energy
policy and incentive schemes, as well as its research to
assess the effects of inequalities on growth and
economic stability all affect development and its
sustainability. Similarly, the World Bank’s recently
announced vision “to end extreme poverty and
2
promote shared prosperity” will have an effect on
sustainable development. The question is, without
coordination under sustainable development guidelines,
what effect are their policies likely to have?
With regard to IMF advice on policies to promote
growth, a sustainable development orientation would
have to emphasize the relationship between resource
use and growth and the resulting impacts on the
environment, jobs and social protection as well as on
the economy. The Bank’s vision for poverty eradication
and shared prosperity is to end $1.25/day poverty by
2030 while promoting income growth for the bottom
40 per cent in each country. For sustainable
development there needs to be better coherence
between poverty-eradication and inequality reduction
policies: the promotion of income growth at the
bottom 40 per cent in each country without attention
1
Paragraph 76 of the outcome document “The future we
want”
2
“A Common Vision for the World Bank Group” (SecM20130122)
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to the potential for a “middle-income-gap” between
top earners and bottom earners ignores and in policy
terms fails to combat the growth of inequalities and the
economic and social instability that can result.
The policies pursued by the BWIs influence international
and national policies on trade, finance and investment
and thus have a major impact on sustainable
development, but without policy coherence and policy
coordination, they can have negative consequences for
that objective. This makes it necessary to create a global
political decision-making body which brings together
the key developed and developing countries to address
the critical inter-linkages between trade, finance,
investment, the environment and economic and social
development. Clearly, if the BWIs were situated within
a truly reformed institutional framework and their
policies made coherent within the three dimensions –
or pillars – of sustainable development, we can say that
it would go a long way toward progress toward
sustainable development. But how likely is such an
outcome, and what are the challenges to be overcome?
2. Some challenges
For the BWIs to take an enhanced role in a reformed
institutional framework for sustainable development
(IFSD), incremental and stalled governance reforms
need to be accelerated. Despite incremental quota
reform at the IMF to enhance the voice and
representation of emerging market developing
countries to better reflect changes in their relative
weights in the global economy, agreement on a
comprehensively reformed quota formula in time for it
to serve as a basis for the 15th General Review of
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Quotas in January of 2014 has stalled. There is also
the concern that recent Board realignment has not yet
gone far enough towards fulfilling European countries’
commitment to enhance the voice and representation
of emerging market developing countries. Without
governance reform, the new multilateral institutions for
development finance and for emergency crisis support
announced by the BRICS in late March could well
3
The term “middle-income-gap” was coined by Indermit Gill,
World Bank chief economist for Europe and Central Asia,
and Homi Kharas, from Brookings, as a caution that simply
stimulating economic growth often resulted in greater
inequality for middle-income countries.
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Group of 24 Communiqué, April 18, 2013
decide to compete with the Bank and IMF rather than
cooperating with them.
The UN Secretary General’s February 2013 Report on
implementing GA Resolution 61/16 to strengthen the
ECOSOC states: the “recent economic and financial
crisis has underscored the importance of strengthening
the multilateral system with respect to global economic
and financial issues and the critical role of global
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economic coordination and coherence.”
Since the
ECOSOC is the greater UN system’s institutional point
of engagement with the BWIs, the degree and
character of ECOSOC reform would have to be
determined in order to say whether enhanced
involvement of the BWIs in a reformed IFSD would be
capable of enhancing their contributions to sustainable
development.
The co-facilitators of GA resolution 61/16, in their
“Food for Thought: The ECOSOC we want” document,
offer suggestions on the integration of sustainable
development into the ECOSOC’s work. They suggest to
use the integration session in May to consolidate inputs
by all actors linked to ECOSOC on the integration of
the three pillars of sustainable development and to
contribute to a focused annual theme and coordinated
follow-up on major summits and UN conferences. The
overall goal of this session is to “deal with global
problems (unemployment, food security, poverty,
inequality, biodiversity loss, climate change) through
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three-dimensional lenses” and 2) to feed these results
into the annual ECOSOC High-Level Segment in July.
Informal interviews with a number of Executive
Director’s offices, from both developed and developing
countries in both the IMF and World Bank, conducted
as background for this brief, revealed a common
perception that ECOSOC – with an overloaded and
rigid schedule because of its complicated mandate, and
with too much reading of pre-prepared statements and
too little opportunity for genuine policy dialogue – is
simply not a place where Ministers can discuss and take
decisions. If the High Level Political Forum is to attract
not only Heads of State for a one or two day event in
September, but engage the full range of Ministries that
5
Paragraph 54 of Report of the Secretary-General on
“Implementation of General Assembly Resolution 61/16 on
the Strengthening of the Economic and Social Council”
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“Food for Thought: The ECOSOC we want”, Part V, section
on possible lines of action.
need to be involved in sustainable development – not
only Environment and Development Ministers, but
Labor and even Finance Ministers, – the HLPF will have
the additional challenge to overcome resistance to
participation in a universal forum, seen as anathema to
genuine policy dialogue and decision-making on
contentious issues.
As with governance reform in the BWIs, decades of
incremental and stalled ECOSOC reform have
contributed to taking decision-making capacity on
international economic and social policy away from the
UN and present a serious obstacle to the development
of an effective institutional framework for sustainable
development within the intergovernmental system.
Additional obstacles stemming from conflicting political
and economic interests operating both within and
outside of this system, as well as the facets of the
intergovernmental system that hinder candid policy
dialogue, reinforce a tendency for the most pressing
decisions related to international cooperation to be
taken in informal bodies, such as the G20, despite the
fact that this violates standard norms of good
governance and policy accountability. Reform efforts
therefore face the extremely difficult imperative to
correct weaknesses in the present intergovernmental
system while constrained by powerful political and
economic interests that prefer the exclusivity and
expediency of informal arrangements.
In replacing the Commission for Sustainable
Development, if we genuinely expect to create a High
Level Political Forum that can muster and direct political
will to achieve sustainable development, it would be
wise to learn from what the G20 does right. Shaped by
its experiences in international cooperation and
decision-making in the five years since it has become a
Leaders forum, the G20 has realized it is impossible to
have a high-level political debate – a real policy
dialogue even if it is just a yearly one-day or two-day
summit – without a huge amount of technical
preparation by the ministries involved. At first, this
meant just the finance ministries, which dedicated
appropriate numbers of their staff necessary to prepare
the background for an ambitious, year-round calendar
of meetings.
Eventually the G20 branched out to include
development, labor, tourism, environment and other
ministries in their expanding calendar of meetings. In
each case, the political will existed on the part of
participating governments to dedicate the human
resources, that is, to contribute to the secretariat
necessary to appropriately prepare for meetings in
which issues are discussed and decisions taken. If we
want the High Level Political Forum to provide the
political leadership to actually achieve sustainable
development within an intergovernmental framework,
we will plan for the necessary human and other
resources to do the work that is needed to prepare
meetings at which they can take the necessary
decisions.
About the Authors
There have been many proposals over the years for
creating new bodies to overcome deficiencies in global
governance, such as the Stiglitz Commission’s idea for a
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Global Economic Coordination Council.
Its proposal
for an intergovernmental Council could provide a good
model for the High Level Political Forum. It would have
to be supported by an independent panel to identify
systemic risks and to issue wake-up calls on tipping
points and issues of urgency to the global economy, the
planet and its people that governments might be
tempted to ignore or suppress and that private
economic interests do already lobby to cover up. It
would also have to provide for the necessary technical
preparation for effective Ministers’ and Leaders’
meetings.
Friedrich-Ebert-Stiftung | New York Office
747 Third Avenue, 22B | New York, NY 10017 | USA
7
“Report of the Commission of Experts of the President of
the United Nations General Assembly on Reforms of the
International Monetary and Financial System”, United
Nations (2009)
Werner Puschra was Executive Director from August 2008May 2013 and Sara Burke is Senior Policy Analyst for
Economic and Social Issues for the Friedrich-Ebert-Stiftung
New York Office.
The views expressed in this publication are not
necessarily those of the Friedrich-Ebert-Stiftung.
Imprint
Responsible:
Dr. Werner Puschra
Executive Director, New York Office
Tel.: +1-212-687-0208 | Fax: +1-212-687-0261
http://www.fes-globalization.org/new_york/
Contact:
[email protected]