## We Must Place Our Hope in Multilateralism

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## Bibliographic details
- Authors: GORDON BROWN
- Published: September 3, 2024

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### Context and thesis
- Author: GORDON BROWN, former prime minister of the United Kingdom.
- Published: September 2024.
- Core argument: Only by strengthening multilateral institutions and cooperation can countries prevent global fragmentation and avert deepening economic, security, and environmental crises.

### Major geopolitical and economic shifts identified
- Shift 1 — Unipolarity to multipolarity
  - Rise of multiple centers of power rather than a unipolar order.
  - Evidence of hedging and nonalignment: only 45 countries are imposing sanctions against Russia.
  - BRICS enlargement: membership increased from 5 to 10, with more members expected.

- Shift 2 — Neoliberalism to mercantilism / protectionist policy
  - Governments increasingly use import and export bans, technology bans, investment bans, and sanctions rather than higher tariffs alone.
  - Nearly 3,000 trade restrictions implemented globally last year.
  - IMF estimate: global losses from increased trade fragmentation could carry a long-term cost of up to 7 percent of global GDP.

- Shift 3 — Constrained globalization and power-based order
  - More than 100 countries adopting national industrial policies.
  - Over 2,500 protectionist measures recorded in the past year alone.
  - Purchasing strategies shifting from “just in time” to “just in case”; diversification strategies described as “China plus one, two, three, four, or even five.”
  - Clarification: this is not necessarily deglobalization; trade in services rising and globalization is becoming more constrained by security, environmental, and equity concerns.

### Key economic indicators and social consequences (preserved exactly)
- Global growth estimated to be 2.8 percent by 2030.
- Historical averages cited as 3.8 percent.
- Extreme poverty currently stands at about 700 million people.
- At current rates of progress, poverty will still affect 600 million in 2030.

### Institutional shortcomings and equity concerns
- IMF governance imbalance: 59.1 percent of voting shares in the IMF are held by countries representing 13.7 percent of the world’s population; India’s and China’s combined share is only 9 percent.
- Developing and emerging market climate and SDG financing gap: estimated need of $3 trillion a year by 2030 (excluding China), of which $2 trillion should be raised domestically and $1 trillion will have to come from outside.
- G7 membership judged too narrow to steer the world economy; the G20 should serve as the premier, more representative forum.

### Policy recommendations and institutional reforms
- World Trade Organization (WTO)
  - Use director-general Ngozi Okonjo-Iweala’s skills to resolve disputes by conciliation, arbitration, and negotiation.
  - Move away from an overly legalistic and broken judge-based appeal system.

- International Monetary Fund (IMF)
  - Enhance role in crisis prevention and crisis resolution.
  - Prioritize IMF as an early-warning system for the world economy.
  - Mobilize its $1 trillion lending capacity to offer better insurance against economic shocks.
  - Negotiate a much-improved sovereign debt restructuring mechanism to create a more comprehensive global financial safety net.
  - Reform IMF constitution to address voting-share imbalances.

- World Bank and multilateral development banks (MDBs)
  - Reorient the World Bank as a global public goods bank focused on human capital and environmental stewardship, per Ajay Banga’s proposal.
  - Mobilize innovative financial mechanisms, including guarantees to de-risk and scale up private sector investment.
  - Raise further funds from shareholders through a capital increase.
  - Summers-Singh G20 report proposal: multilateral development banks should provide an annual increase of $260 billion.

- G20 reforms
  - Re-establish the G20 as the premier forum for global economic cooperation.
  - Make the G20 more representative via a constituency system.
  - Assemble a professional secretariat to ensure continuity of policy from year to year.

### Historical precedents and concluding scenario
- Historical examples of successful multilateral cooperation cited: Kennedy’s nuclear test ban treaty, Reagan–Gorbachev nuclear reductions, multinational efforts against ozone depletion, the 2009 G20 summit stabilizing the global economy, and the Paris climate accord.
- Two possible paths presented:
  - Path 1: Global fragmentation and deepening crises.
  - Path 2: Collective action yielding prosperity, progress, and hope — the author chooses hope.

*This article draws on a speech by the author at the April 2024 PIIE-IMF conference on steering structural change.*

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_Source: https://www.imf.org/en/publications/fandd/issues/2024/09/point-of-view-we-must-place-our-hope-in-multilateralism-brown_