Revamping the Global Multilateral Institution | PWOnlyIAS 2023

Context: This article is based on an Editorial “Reforming global governance institutions the Indian way” which explores the Failure of multilateral Institutions. 

• The Indian Prime Minister recently expressed concerns regarding the crisis and failure of global governance in multilateral institutions. Also, the climate vulnerable 20 group (V20) emphasized major reforms to the world’s international financial architecture to prevent the escalating climate crisis.

What are the Multilateral Institutions:

In a world where unity prevails multilateralism stands as a hope for a better future, fostering collaboration & peace.

• • A multilateral institution (such as the United Nations (UN), International Monetary Fund (IMF), World Bank Group etc) is formed by three or more nations to work on issues of common interest.
  • Multilateralism, through international institutions, binds powerful nations, discourages unilateral actions, and empowers smaller states.

• Historical Beginning of Multilateralism

• The Congress of Vienna (1814-1815)

• • • • After the Napoleonic Wars, great powers convened at the Congress of Vienna to redraw Europe’s map. This led to the Concert of Europe, promoting peaceful issue resolution.

• Post-World War II Multilateralism – The United Nations (UN)

• • • Established in 1945 with active U.S. and Soviet participation, the UN expanded multilateralism. Multiple organizations came into existence after the UN such as WTO, IMF, WHO etc.

The necessity for Multilateral Institutions:

Multilateralism is our global lifeline which unites nations to tackle shared challenges and secure a better future.

• Need to tackle challenges of global nature: Most of the challenges nations face today are conflicts, climate change, migration, macroeconomic instability, and cybersecurity which require global solutions.
• Overcome from pandemic disruptions: The COVID-19 pandemic has reversed the social and economic progress that the global society made in the past couple of decades. In 2020, the pandemic resulted in an additional 97 million people falling into poverty.
• Conflict Resolution: Multilateral institutions provide a stage for diplomatic negotiations, decrease the likelihood of armed conflicts between nations.
• Trade and Economics: Facilitating trade agreements and economic cooperation, they foster stable global economies and reduce trade disputes.
• Soft Power: Multilateralism increases a nation’s soft power by highlighting its commitment to global cooperation & problem-solving.

Deteriorating Multilateral System:

The growing global challenges and shifting dynamics, preserving and reforming multilateralism becomes highly important for a stable and peaceful world.

• Crisis of Multilateralism: The recent East Asia Summit in Jakarta and the G20 summit display the irreversible crises within the established multilateral order.
• Rise in Global Conflicts: Russia is entangled in a conflict with Western nations regarding Ukraine, while China faces disputes with several Asian countries.
• China Angle: China represents a lasting challenge to multilateralism. China’s increasing economic strength and military capabilities, to its expansionist actions, steadfast backing of Russia has created significant challenges in Asia and Europe.
• Global Power Shifts: Changing power dynamics and the rise of new global players can disrupt established multilateral systems.
• Polarization: Sharp ideological divisions among member states can paralyze multilateral forums, preventing consensus.
• Human Rights Violations: Member states’ human rights abuses can strain the credibility of multilateral organizations that fail to address them effectively.

Issues Facing Multilateral Organizations:

To ensure the fairness & effectiveness of multilateral institutions, inclusive and equitable approach is required in leadership’s approach  & decision-making processes.

• Western Dominated: Most international institutions are primarily led and managed by Western countries. All presidents in the World Bank Group, from its inception in 1946 to 2023 have been U.S. citizens nominated or selected by the U.S.
• Failure to uphold principles of multilateralism: Developed nations sidestep or even boycott multilateral institutions in which they are either founding members or active participants.
• Non merit based Selection: There is no open merit-based transparent selection process to appoint the president of the World Bank.
• Non Democratic Representation: Nations with greater voting powers are given more weightage in deciding loan amount, grants, policies, projects and direction of the institutions.

Obstacles to Restructuring Multilateral Organizations:

In the face of a shifting global landscape, addressing the complexities and shortcomings of multilateralism is imperative for fostering a more inclusive and effective international order.

• Change in current distribution of power is a complex and sensitive process that can have significant consequences if not approached carefully.
• Multilateralism against emerging multiplex global order, which facilitates the creation of new groups, alliances, and coalitions among like-minded nations, complicating efforts to reform older institutions.
• Lack of Accountability: Some multilateral institutions lack transparency and accountability mechanisms, making it challenging to implement meaningful reforms.
• Inequality in Representation: Disparities in representation and decision-making power among member states can hinder equitable reforms.
• Rise of Protectionist Policies: The rise of protectionist policies such as America First, Brexit, etc underscore the threat and crisis of multilateral institutions.

The Way Forward: Revamping of Global Multilateralism:

Embracing reform, diversity, and innovation is the path to revitalizing and fortifying effective multilateralism globally.

• Establishment of a clear narrative for multilateral reform to create a dedicated engagement group.
• Promotion of minilateral groupings as a new approach to multilateralism and work on transforming them into multi-stakeholder partnerships.
• Taking cues from the G-20 to overcome the trust, legitimacy and utility crises of multilateralism.
• Reformed Multilateralism with more diversified and democratic global order with multiple centers of production.
• Developing a multilateral governance framework for plurilateral agreements to include key principles of non-discrimination, transparency, and inclusivity in incorporating the results of plurilateral negotiations in the WTO rulebook.

Conclusion:

• In today’s complex world, reforming global governance is vital. We must embrace diversity, fairness, and innovation to strengthen effective multilateralism. By working together and learning from successful models like the G-20, we can navigate the challenges and build a more inclusive, democratic, and accountable global order.