Global governance in a changing world

Despite two rounds of restructuring voting rights within the IMF (only one of which has been fully ratified), the US still maintains more than 15 percent of the voting power at the IMF. It has a similar voting share at the World Bank. This is enough for the US to block any motion in the IMF and the World Bank, by virtue of the founding articles of these institutions, which were written nearly 70 years ago by the US and its close ally Britain.

Although under the latest IMF restructuring China has increased its share of voting control to 6.1 percent, the US can still block any proposal it dislikes. Even the combined voting power of the BRICS countries - Brazil, Russia, India, China and South Africa - in the IMF is still not enough to match the voting power of the US. In five years, when the advanced countries' global economic share falls to less than 50 percent, how will the leadership elections of these important global institutions be conducted? Doubtless, the US and its European allies will fight to hold onto their controlling positions, despite their dwindling power.

Like the IMF and the World Bank, the World Economic Forum recognizes the powerful underlying economic trends shaping our global economy and society. But it is unable to tackle them head-on because it owes its origin and support to the advanced countries, not the newly emerging ones.

The nearest the Davos conference gets to addressing the fundamental shift in the world's economic structure is a discussion titled "China 2020", which attempts to forecast what impact China's rise will have on the world in eight years.

In fact, the resilient dynamism envisaged by the Davos conference, a world of greater economic confidence and of shared prosperity, depends on the new world that is emerging from the wreckage of the Western financial collapse. But only if the developed countries can relinquish their control of a world in which they are no longer the masters, and turn instead to the emerging countries in a spirit of true partnership and shared enterprise, can the aims of the Davos 2013 meeting - building resilient institutions, improving decision-making and establishing shared norms - be realized.

The author is a visiting professor at Guanghua School of Management, Peking University. E-mail: gileschance@yahoo.com

(China Daily 01/22/2013 page8)