core sector communique

New Instruments for a New Era Are Needed

• Fundamental changes must be made to decision-making processes within international institutions.
• The voices of developing and emerging market countries must be listened to and given legitimacy.
• The failure of the Doha Development Round and pervasive poverty is proof that multilateral institutions are not working.  

Davos-Klosters Switzerland, 28 January 2010 – If critical global challenges are to be met, there must be fundamental changes to decision-making processes within international institutions and a new attitude on the part of developed countries that have not listened closely enough to the needs of developing and emerging market countries. This was the message delivered by six heads of state at the World Economic Forum Annual Meeting 2010 as they addressed the issues of the redesign of the global financial system, climate change, the chronic failure of the Doha Development Round of trade negotiations and tackling poverty.

“It is important that the G20 reach out to those not taking part, listen to their needs and reflect them in our discussions. Otherwise, it will not be effective,” said Lee Myung-Bak, President of the Republic of Korea; Chair, 2010 G20 Summit. President Lee, who is hosting the 2010 G20 Summit in November, also called on world leaders to do everything they can to reject all forms of protectionism.

Stephen Harper, Prime Minister of Canada; 2010 G8 Summit; and Toronto G20 Summit, noted that world leaders disagree over climate change, trade and measures to safeguard the global financial system. “To square national interests with global interests it is necessary to recognize the legitimacy of the other’s [point of view],” he said. On financial regulatory reform, Harper said he was not pessimistic. “I do not think this is a hopeless exercise. Ultimately, there is recognition that problems in the financial system caused the crisis and cannot be repeated. There is recognition of the basics. If we are patient and keep working at it, progress will be made.”

The failure of the international community to come to an agreement on climate change, which will again be addressed at the United Nations Framework Convention on Climate Change Conference of the Parties meeting in Mexico City in November 2010, proves that “the negotiation by consensus mechanism is not working” said Felipe Calderón, President of Mexico. “We have new problems and we cannot tackle [problems such as climate change] with instruments that were created in 1945,” he said. “We need to create new instruments for a new era.”

The failure to conclude the Doha Development Round and the pervasive poverty that affects the majority of the world’s population is proof that multilateral institutions are not working. “We have structures that were developed decades and decades ago when circumstances were different,” said Jacob G. Zuma, President of South Africa. “Circumstances have changed. In the end, the majority of the world does not have the right to take decisions for themselves. We have reached a point today when it is time to rethink and redesign, including decision-making processes of existing organizations.”

José Luis Rodriguez Zapatero, Prime Minister of Spain, pointed to “big progress” in the area of financial regulation but urged world leaders not to lose sight of the Millennium Development Goals. “The financial crisis cannot be an excuse to reduce development aid,” he said. Nguyen Tan Dung, Prime Minister of Vietnam; Chair, 2010 ASEAN, noted that the financial crisis revealed to “weaknesses and shortcomings” in global governance. “We need a more democratic world . . . we need to touch upon the right role [for] developing countries.”