From exclusion to inclusion: Establishing just and reasonable global economic governance

The US decades-long commitment to economic globalization is being dismantled. Trade wars are launched and exclusive blocs are built to grasp at its fading hegemony. Consequently, global attention is pivoting sharply, seeking a new multilateral anchor in the rising economies of the Global South.

Opposition to US exclusive unilateralism

The Global South is spearheading the creation of a new driver of globalization rooted in South-South cooperation. Two months after being hit by Donald Trump's 30 percent tariff, South African farmers found relief in their new trade deal with China, which accesses varieties of stone fruits to the world's second largest market for the first time in history. Moving beyond specific deals, Beijing's policy underscores its broader commitment to upholding global trade openness, notably through the sweeping removal of tariffs on goods from 53 African nations.

Though struggling in the face of unilateralist headwinds, the Global South's commitment to expanding trade and integration could not only be encouraging for themselves but also the North. This year's Nobel economic prize laureates — Joel Mokyr, Philippe Aghion, and Peter Howitt — issued a direct warning regarding the challenge posed by Trump's trade policies to global growth and innovation. Empirical evidence further validates these concerns. A Yahoo Finance analysis of corporate earnings shows that tariffs and other US trade policy directly harm profits and force price hikes across at least 7 of the 11 sectors comprising the S&P 500 stock index.

A globalization in Global South style

The Global South's commitment to multilateralism is not a defense of the Western-centric model of globalization. Instead, they are pushing back against unilateralism to establish a new, equitable economic architecture. The reason for this move is obvious. Despite accounting for over 40 percent of the world's economy and driving roughly 80 percent of global growth, the Global South remains institutionally marginalized in the Western-led international financial architecture (IFA). The Global North commands nine times the voting power of the South in the IMF. Additionally, in the World Bank, the US, EU, and Japan collectively control approximately 46 percent of the voting shares.

This disparity is strongly remarked by the UN Secretary-General Antonio Guterres, who has stated that multilateral lenders such as the IMF and the World Bank have benefited "rich nations only" for decades now. The Global South is struggling for a globalization benefit-to-all equipped with fair and reasonable global economic governance that are never seen in human history — a globalization in Global South style.

The Global South's approach to inclusive globalization and equitable economic governance

The prerequisite for achieving a Global South style globalization is urgently increasing Global South representation within the IFA. This consensus was previously reflected in G20-mandated IMF reforms, notably 5 percent voting shares shift to emerging markets and developing countries at the Pittsburgh Summit and 6 percent at the Seoul Summit. Accelerating further IFA reform by realignments of IMF quota share and carrying out the shareholding review of the World Bank are essential to dismantling institutional barriers and enabling the Global South to fully pursue a more equitable and just world order.

Another critical imperative is safeguarding the multilateral trading system. Unilateralism in trade can be catastrophic. The US Liberation Day tariffs could have caused a 0.7 percent shrink of the global GDP with developing countries being the most affected, according to the UN International Trade Centre. A multilateral trading system with WTO at its core, along with resilient industrial and supply chains unimpeded by geopolitics, is essential to Global South development as well as the prosperity of the world.

The foremost to bear in mind is prioritization of development for all and adherence to the people-centered approach. The developing countries have the freedom to choose their own development paths. The very first thing that developed countries could do is expediting the fulfillment of their development assistance commitments towards the developing world rather than scrutinizing the South ideologically.

A Global South moment to be expected

The de-escalation of trade frictions between the two largest economies provides an opportunity to focus on a cooperative agenda for inclusive global economic governance and integration. This aspiration will face a crucial test at the G20 Leaders' Summit in Johannesburg this November, a premier forum for global economic governance currently led by a Global South presidency.

African countries are an indispensable part of the Global South community and upholders of the Ubuntu philosophy. With the South African presidency, the year 2025 is witnessing the first G20 Leaders' Summit in Africa and welcoming the African Union's second year as a formal G20 member. While some countries are undermining the G20 cooperation, the Global South is expecting solidarity to make the meeting a moment of itself. With such aspiration, G20 would be a defender of justice and a contributor to shared prosperity.

The author is an observer of international affairs.

The views don't necessarily reflect those of China Daily.

If you have a specific expertise, or would like to share your thought about our stories, then send us your writings at opinion@chinadaily.com.cn, and comment@chinadaily.com.cn.