It is customary to talk of two different systems: the Bretton Woods system and the UN system. This reflects the facts of life but not the legal situation. Legally there is only one system, the UN system. The Bretton Woods institutions - the International Monetary Fund and the World Bank - are legally part of the UN system. They are specialised agencies of the UN, the same as the United Nations Food and Agriculture Organisation (FAO), the World Health Organisation (WHO), the International Labour Office (ILO) etc. As specialised agencies of the United Nations they are subject to guidance and recommendations by the UN General Assembly, the UN Economic and Social Council (ECOSOC), and subject to the administrative co-ordinating functions of the UN Secretary-General. In fact it was initially envisaged that the specialised agencies of the United Nations should all be together in one place - presumably New York - to facilitate day-to-day control and co-ordination.
However, all this is grey legal theory. The facts of life are very different. The Bretton Woods institutions do not consider themselves to be part of the UN system and the idea of guidance by the General Assembly, ECOSOC, and the UN Secretary-General would provoke hollow laughter at 1818 H Street NW, Washington. The separation of the two systems - in actual fact although not in law - has historical origins. The Bretton Woods institutions were established in 1944 at the Bretton Woods conference, on the basis of three famous memoranda written by Keynes in 1942 on the International Clearing Union (which became the IMF), the International Investment Fund (which became the International Bank for Reconstruction and Development or World Bank), and International Commodity Buffer Stocks (the stillborn International Trade Organisation (ITO). The United Nations was created in a separate process culminating in a conference at San Francisco in 1945 - a year after the Bretton Woods conference. Hence at the time of the Bretton Woods conference the UN did not exist (although its intended establishment had been proclaimed in the Atlantic Charter in 1941 and was thus known to the negotiators at Bretton Woods). This explains the absence of detailed discussions on the relationship between the two systems, as well as the more general references to linkage to the forthcoming UN. A special irony of this historical sequence is that the largely financial and banking institutions of the IMF and World Bank were established at the political capital in Washington DC whereas the UN, an essentially political institution, was established at the financial centre of New York. This geographical anomaly turned out to be a great advantage to the Bretton Woods system and a great disadvantage to the UN system.
The statement that the United Nations rather than the Bretton Woods institutions was envisaged as being the locus of global macroeconomic governance conflicts with the conventional wisdom that the Bretton Woods institutions were to be responsible for global macroeconomic governance. In fact this is something of a chicken-and-egg problem since the chronology of the creation of the two systems - UN and Bretton Woods - is intermixed in a complicated manner. The first step in this chronology is the Atlantic Charter of 14 August 1941 (well before the Bretton Woods conference and even preceding Keynes's original memoranda of 1942). The Atlantic Charter foresaw the creation of a 'wider and permanent system of general security'. Among the objectives of the 'wider and permanent system' listed in the Atlantic Charter was 'to bring about the fullest collaboration between all nations in the economic field with the object of securing, for all, improved labour standards, economic advancement and social security'. This was further underlined in a declaration at Washington by the twenty six states of the anti-Axis coalition on 1 January 1942. A more specific outline was decided at a conference at Dumbarton Oaks in October 1944 - in other words immediately following upon the conclusion of the Bretton Woods Conference in July 1944. Thus the Bretton Woods Conference preceded the Dumbarton Oaks Conference, but only just, and in fact the link was emphasized by the official title of the Bretton Woods Conference, ie 'United Nations Monetary and Financial Conference'. However the Charter of the UN itself was not signed until 26 June 1945 - almost a year after the conclusion of the Bretton Woods Conference at the San Francisco Conference. The relationship between the World Bank and the UN gave trouble and was in doubt from the very beginning (more so than in the case of the IMF). The agreement between the World Bank and the UN was not completed until November 1947 and the negotiations were rather antagonistic and acrimonious. 7 The UN had been pressing for an earlier agreement but the Directors and management of the World Bank requested repeated postponement. It is likely that an earlier agreement would have given greater emphasis to the role of the UN, but the final agreement emphasized the independence of the World Bank and stressed the limits of the relationship with the UN.
The Terms of Agreement of the World Bank include a section on the relationship with other international organisations. With the UN already so clearly on the horizon, this clearly refers to the UN prominently among the 'other international organisations'. The key provision specifies that in making decisions on loans or guarantees relating to matters 'directly within the competence of any international organisation ... the Bank shall give consideration to the views and recommendations of such organisation'. While the requirement to 'give consideration' is rather vague, and in the negotiations of an agreement with the UN the World Bank insisted on its independence and special status different from other specialised agencies, yet the Terms of Agreement clearly give the various organs of the UN a legitimate right to express views and make recommendations to the World Bank. This provision in the Terms of Agreement of the World Bank is in addition to a general duty to 'cooperate with any general international organisation and with public international organisations having specialised responsibilities in related fields'. The 'general international organisation' referred to in specific distinction from 'international organisations have specialised responsibilities' clearly refers to the UN itself.
The difficulties and delays in reaching an agreement between the World Bank and the UN and the insistence by the directors and negotiators or the World Bank to put a distance between the two systems was an early indication that the major powers put their confidence in the Bretton Woods institutions with their more 'reliable' distribution of voting power. This greater 'confidence' factor rules today as strongly as ever and is now further defended by a 'competence' factor. At the time of the early agreements giving the Bretton Woods system virtual autonomy from the UN, however, the 'competence' factor could hardly have played a role. Any competence differential may well be the result of 'confidence' and the consequent distribution of support and resources between the two systems. It may also be more a question of different approaches and different comparative advantages and disadvantages rather than competence differentials. The other UN specialised agencies have also striven for 'autonomy' although not to the same extent and not with the same support by the industrial countries since the other agencies remain tied to the UN voting system. In their case it is more the developing countries which are behind the drive for 'autonomy', but both tendencies create obstacles in the way of co-ordination and joint action by the whole system. Distribution according to 'confidence' and voting systems seems a poor substitute for distribution according to comparative advantage and complementarities.
There are still remnants of the legal position. For example, the President of the World Bank and the Managing Director of the IMF present a report at one of the two annual meetings of the Economic and Social Council, although this is more in terms of a lecture than of accounting for their activities. It is yet another anomaly that the Secretary-General of the UN is not reciprocally allowed to make a statement at the annual September meetings of the Bank and Fund. (There seems however no reason why the Secretary-General should not break with this convention and forcefully participate in the annual meetings of the Bank and Fund, representing the interests of the global community - he could hardly be denied the floor!)
The main difference between the two systems is the different voting system and method of control. In the Bretton Woods system voting is on the basis of contributions: hence the IMF and World Bank are firmly under the control of the major industrial countries and financial centres. This is also clearly reflected in the different outlooks and approaches of the two systems and the composition and previous training of their staffs. In the UN system, leaving aside the veto power in the Security Council on potentially military matters, voting is on the basis of one-country-one-vote. At the beginning of the UN, when most Third World countries were still colonies, this did not trouble the major industrial countries unduly. But with decolonization the principle of one-country-one-vote meant a built-in majority for the developing countries - especially when they teemed up with the Soviet bloc. This difference in control proved highly beneficial to the Bretton Woods system (where for a long time the Soviet bloc was absent), and it thus became the chosen vessel of the industrial countries while the UN system was sidelined and marginalised.
Insofar as the one-country-one-vote system and universal membership can be considered more democratic than the one-dollar-one-vote system, the refusal of the industrial countries to give serious support to an institution governed by one-country-one-vote sits uneasily with the promotion of democracy proclaimed by the Western countries. A third voting system, reflecting the size of member countries' population (one-person-one-vote) would give very similar results to the UN system of one-country-one-vote, as far as the ratio between industrial countries and developing countries is concerned - but would give enormous voting power to China and India.
The method of decision-making is also different in the two systems. In the Bretton Woods institutions binding decisions are made by a relatively small body (about twenty) of Executive Directors, representing the major contributors (with a virtual veto power by the US) and groups of minor contributors. In the UN system, non-binding resolutions are decided in much larger bodies (54 in ECOSOC, over 100 in the General Assembly), in practice on the basis of preceding discussions within and then between the three major groups. This group procedure is most directly embodied in the decision-making process of UNCTAD. In the Bretton Woods system, the developing countries feel powerless and at a disadvantage, even though they also have their separate channel of expression in the Development Committee. In the UN system the industrial countries (and to some extent the large countries) feel at a great disadvantage. We have yet failed to find methods of decision-making with which both sides feel comfortable, although qualified majorities and group systems represent promising approaches.
There are also differences in staffing and recruitment. The UN system, including the Specialised Agencies, operates on a country quota basis. This means that nationality considerations may prevail over competence and suitability - an inferior candidate from an 'under-represented country' may get priority over a candidate from a country with an 'overcrowded quota'. Alternatively, if highly competent candidates from countries with skill scarcities are recruited, this represents a harmful brain drain for the country concerned. The Bretton Woods system has the advantage of less concern with 'country quotas' but the disadvantage of a less diversified and less multicultural staff. This will lead to less representation of different development experiences and greater ideological uniformity of views among the staff which in the long run can be as harmful to effective performance as lack of competence.
The original division of labour between the World Bank in particular and the UN was that the World Bank would concentrate on project financing on a non-concessional basis, while the UN would be the focus of global macroeconomic management (centred on ECOSOC) and of a concessional multilateral aid programme (the Special United Nations Fund for Economic Development, or SUNFED, more accurately described by its original name of UNFED, without the Special!). In the event, this original division of labour has completely disappeared. The World Bank has struck out from the project basis into programme lending and structural adjustment lending, largely in the service of debt collection. At the same time the World Bank, through its IDA window, has also moved into the field of concessional lending (although the bulk of its lending is still non-concessional). In this process, the World Bank has assumed a more controversial role and the results of the structural adjustment and stabilisation policies imposed both by the IMF and the World Bank are mixed and their impact a matter of debate. Furthermore, in this process the quality of the Bank's project lending has declined (by its own evaluation) as emphasis has shifted from agricultural engineers and other skilled project personnel to monetarist/neoclassical macroeconomists, and staff incentives have shifted in the same direction.
The Bretton Woods institutions justify their approach by arguing that the developing countries must face the facts of life and that without the type of adjustment imposed on them their plight would be even worse. This last statement, as a counterfactual argument, is difficult to prove or disprove; as for the 'facts of life' argument, the counterargument would be that the Bretton Woods institutions were not created to impress the facts of life on deficit countries but to change the facts of life. This would imply pressure on the surplus countries rather than the deficit countries. Indeed such pressure on surplus countries - or at least symmetrical pressure on all countries - was part of the original vision for the Bretton Woods institutions. This symmetry still exists on paper in the form of IMF 'surveillance' of all member countries. But this is a very shadowy affair and not taken seriously by the powerful member countries not in need of direct IMF or World Bank assistance.
At the same time, the function of global macroeconomic management, insofar as it has not been taken out of the multilateral system altogether and embodied in the G-5 or G-7, has been moved from the UN to the Bretton Woods system. The concessional aid fund foreseen in the form of SUNFED or UNFED has also been taken away from the UN and incorporated in the World Bank. The same process has been at work with another fund, the idea of which originated in the UN, i.e. a compensatory fund for unforeseen losses in export earnings. This has been incorporated in the IMF in the form of the Compensatory Financing Facility (CFF), but there is now a consensus that it has become emasculated and distorted away from its original intended purpose, and that it should be better used and with greater concessionality in line with original intentions. There is also broad support for the idea that the CFF should be widened to deal with increases in import prices and changes in terms of trade (not just export earnings) as well as other contingencies (the latter extension has already been made in principle).
The separation between the UN system and the Bretton Woods system is strikingly demonstrated in the way the IMF/World Bank stabilisation/structural adjustment programmes are being negotiated. These negotiations are limited to financial IMF and World Bank specialists from Washington on one side of the table, and representatives of ministries of finance and central banks on the other side of the table (the latter themselves quite likely former staff members of the World Bank and IMF). Many of the deficiencies and doubtful effects of the programmes can be explained as the result of such a narrow financial framework for their negotiations. Decisions which have a major impact on the fate of say agriculture or health of a country are made without representation of the UN agencies responsible for agricultural problems and with field representation in the country, i.e. the FAO, or the WHO is the case of health, and on the other side of the table without representation of the Ministries of agriculture or health. A broadening of the negotiating framework could do much to restore the unity of the UN system. Other potential reforms of the present process of stabilisation and structural adjustment relate to the country-by-country approach with insufficient regard to aggregation effects and to the nature of performance indicators.
A fashionable suggestion for a new division of labour between the two systems - often in the name of `revitalizing the UN' - is to allocate to the Bretton Woods system the 'hard' core of development, i.e. macropolicy, finance, and trade (GATT being considered as an adjunct of the Bretton Woods system). The UN would deal with `soft' issues such as poverty reduction, social policy, employment, environment, human resources, vulnerable groups such as women and children, refugees, disaster relief, etc. Leaving aside such questions as what is `hard' and `soft' in development, and whether such a division into hard and soft issues makes any sense, this proposed division of labour would only work if the UN, in charge of the `soft' issues, would receive the same degree of political and financial support as the Bretton Woods system. As already explained, this will not be the case as long as the financially powerful countries, in their dislike of the UN voting control and the UN's different approach, concentrate their backing on the Bretton Woods system while marginalising the UN system and keeping it on the brink of bankruptcy. The precedent of the environment is not encouraging: although environment would be counted among the issues allocated to the UN (with a UN agency already in existence in the form of UNEP - the UN Environment Programme), when it came to establish the financial backing for the agreements arrived at the Rio Environment Conference, the chairmanship, administration and overall co-ordination of the General Environmental Facility (GEF) (including policy and investment projects) was entrusted to the World Bank and not to the UN system (although the UNDP was made responsible for technical assistance activities and UNEP for the administration of subsidiary funds to help developing countries to comply with the provisions of the Montreal protocol for phasing out ozone-destroying substances).
The GEF also illustrates the attempt to reach compromises between the dollar-a-vote Bretton Woods system and the country-a-vote UN General Assembly and ECOSOC. The developing countries have pressed for control of GEF operations to be moved away from World Bank decision-making procedures and this has in principle been accepted. The latest proposal provide for a "Participant Assembly" with 30 groups or "constituencies", of which at least half would be represented by developing countries. This elaboration of the 'Group' system parallels proposals for the distribution of voting power in a reconstructured and smaller ECOSOC or new Economic Security Council. The principles accepted in all these cases is that decision-making power should be "transparent, balanced and equitable" - but this still leaves room for different interpretations of what institutes "balance" and "equity".
Recent experience illustrates the highly unequal distribution of resources between the two systems. While the recent replenishment of IDA has shifted 13 bill. SDR in new contributions to the window of the World Bank, the GEF (General Environmental Facility) in which is the UNDP and UNEP have at least a share in resources (although administration and investment decisions and implementation are in the hands of the World Bank) has received less than 5% of this over a similar 3-year-period (7% if co-financing is included). For the GEF, this was, of course, an initial plot phase, but even for the next 3-5 year phase the target is only 11% of the IDA contributions (on an annual basis) - and it is by no means certain that this target will be met. By even sharper contrast, the UNDP initiative for sustainable development (Capacity 21) which would be entirely within the UN system has remained virtually inoperative for lack of contributions. No wonder that the Report of the Secretary General to the first sessions of the Commission for Sustainable Development, while listing IDA and even GEF as "positive developments", Capacity 21 appears among the "not encouraging" items (E/CN17/1933/11, paras. 54 and 55).
There have also been significant shifts within the Bretton Woods system itself. The net result has been a shift in influence away from the World Bank and towards the IMF. The IMF, according to its Articles of Agreement, has the purpose 'to promote international monetary cooperation through a permanent institution which provides the machinery for consultation and collaboration on international monetary problems'. Another of its purposes is 'to facilitate the expansion and balanced growth of international trade, and to contribute thereby to the promotion and maintenance of high levels of employment and real income and to the development of the productive resources of all members as primary objectives of economic policy'. The role of facilitating 'the expansion and balanced growth of international trade' has been largely taken over by GATT. Moreover, the task of 'promoting international monetary cooperation ... and machinery for consultation and collaboration on international monetary problems' has in fact been taken over by the G-7 and it is notable that during recent troubles of alignment among major currencies the IMF has been very much on the sidelines.
To that extent, as well as in its lack of effective surveillance of powerful member countries, the IMF has lost ground compared with the original expectations. On the other hand, in compensation or otherwise, the IMF has gone into the development business by establishing strict and effective policy surveillance of debtor countries and developing countries generally. It has also moved away from its intended limitation to very short-term and temporary support towards medium-term assistance and a type of conditionality which goes well beyond the single criterion of balance of payments equilibrium. Moreover, this conditionality can hardly be said to be inspired by 'the promotion and maintenance of high levels of employment and real income and the development of productive resources ..'. The IMF in fact through its stabilisation programmes and medium-term facilities impresses a particular type of development policy upon those member countries for which its surveillance is effective.
In doing so, the IMF has inevitably encroached upon the functions of the World Bank. Development was supposed to be World Bank business, not IMF business. The original clear division of responsibilities between the two institutions has become blurred. Moreover, in its relation to the IMF the World Bank has come to assume a subordinate role, playing second fiddle8 - the Bank cannot provide programme lending of any kind until the country concerned first has an IMF programme in place. A suggestion has been made that a tidy new division of labour would be to restore to the IMF its trade and surveillance functions by merging GATT with the IMF, but on the other hand getting the IMF out of the development business and restoring it to the World Bank. 9
The erosion of the normative and analytical functions of the UN in favour of the Bretton Woods system has also extended to the UN specialised agencies such as the FAO, ILO, WHO, UNESCO, etc. Their financial resources are as precarious as those of the UN itself and they are increasingly compelled to compete for technical assistance resources from bilateral donors, the UNDP, and indeed the World Bank itself. Their intended functions of norm-setting, policy advice and analysis have increasingly been taken over by the IMF and World Bank. The lack of financial resources has a cumulative effect in that it lowers the capacity of the UN and its agencies to do their work competently and this then serves as a further reason (or pretext) to cut their resources further and shift them to the Bretton Woods system. As long as this vicious circle is not broken all talk of 'revitalization' is idle.
There is enough in this 'black-and-white' overall picture of a shift in support and resources away from the UN system and towards the Bretton Woods system to give food for second thoughts and provide a case for a movement back towards better balance. Yet at the same time this picture is oversimplified and could be seriously misleading. Reality is more complex. Neither the Bretton Woods system nor the UN system are homogeneous in the degree of support which they receive. There are elements in the Bretton Woods system which are struggling to attract support, and there are parts of the UN system which are recognised success stories and command a great deal of support. This applies particularly to some of the work of the WHO, to the work of UNICEF, to the operations and co-ordinating functions of the World Food Programme, and to some of the work of the FAO (such as the establishment of early warning systems for impending crop failures in cases of drought etc). Some of the comparative advantages of the UN system are widely recognised, such as their strong field presence, their co-operative relationship with recipient governments in drawing up country programmes and discussing policy changes, and their less dogmatic and more pragmatic approach The UN system also seems better equipped in any movement from unilaterally imposed quick-fire stabilisation and structural adjustment programmes to mutually binding long-term development contracts; there is a growing consensus in favour of such a shift. 10
It is perhaps not sufficiently recognised how many major innovations within the Bretton Woods system have grown out of analyses and initiatives developed within the United Nations system. Because of this lack of public perception it may be useful to present a list of the major innovations of this kind. As a quantitative indicator of the importance of the UN as a source of new ideas, at least six Nobel prize winners in economics have worked for the United Nations. Often the role of the UN has been to serve as a scapegoat in the sense that the major industrial countries adopted UN initiatives, but shifted them to the Bretton Woods system as part of their strong preference for acting through the Bretton Woods Institutions rather than the UN. (There is a parallel here with the political arena where the role of the UN has often been to serve as an alibi for not taking unilateral action which might have led to conflict.) In this sense it is true to say that 'the UN's greatest successes are its failures'. This is particularly well illustrated by the first item in our list, the creation of IDA as the soft aid window of the World Bank.
Thus, while the role of the Bretton Woods institutions may be currently predominant, the role and even more the potential of the UN system remains a key element in the promotion of human progress and the eradication of poverty. The challenge to the world community is to use both systems equally well and equally fully, allotting tasks according to their comparative advantages and getting the two systems to work in harmony and mutual supplementation.
What of the future? It is difficult to believe that the original vision of 1944-1945 can be restored, with development policy centred and co-ordinated in the UN with its more democratic voting system. This would only happen if, motivated by the political need for a strong UN in peacekeeping and peacemaking, the idea of revitalising it in the economic and social fields is also taken seriously. Meanwhile, the best that can be hoped for is a return to a reformed and updated version of the Bretton Woods system which for 25 years served to create a 'Golden Age' of full employment. There seems to be an emerging consensus in this direction, a growing pressure for change of the present relationships and present modes of operation, a feeling that the pendulum is swinging back towards the original vision. At the same time, new concepts of human-based development are seen to require new concepts of human-based global governance with new emphasis on the UN system and a re-ordering of relations within the system.
The proposal to create a UN Economic Security Council arises from dissatisfaction with the present institutional arrangements for global development policies within the international system. This dissatisfaction is justified since presently we have no institutional arrangement which would combine the two essential requirements of democracy and effectiveness. Insofar as the present system is centred in the Bretton Woods institutions of the World Bank and IMF, it is clearly not democratic. The developing countries containing the majority of mankind as well as the majority of sovereign member countries have virtually no say either in the decision-making process or in the management of these institutions. They are effectively controlled by the G5 or G7 - so it makes little practical difference whether the G5 or G7 handles development policies directly or through the World Bank/IMF. The decision-making process and the management of these institutions may be effective but only in the sense of carrying out policies and decisions which are non-democratically determined.
On the other hand, the UN institutions - the General Assembly and ECOSOC - are democratic in their distribution of voting power, but they are not effective, partly because of the excessively large numbers of actors involved which makes for unwieldy and time-consuming procedures, and partly because the powerful countries needed to give effect to their decisions do not support institutions in which they are in a minority.
The proposal for an Economic Security Council (ESC) is not the only possible way of resolving the present impasse. Other possible approaches would include the following:
Among the non-military and apparently localised problems which today spill over across national frontiers and constitute major global problems from which no country is exempt are of course the problems of environmental degradation which are now recognised as a global concern to be dealt with by the United Nations. The creation of UNEP, the establishment of the Global Environmental Facility in the World Bank with the collaboration of the UNDP and UNEP, and the establishment of the UN Commission for Sustainable Development are all indications that this is now a recognised fact.
However there are many other problems arising from economic and social degradations, particularly in the developing countries, which are of comparable seriousness and create a comparable need for global action. These would include problems of disease (especially AIDS), drugs, international crime syndicates, terrorism, massive migration of 'economic refugees', political refugees, etc. Unemployment has also returned as a widespread international problem with indications that once again it may lead to protectionism, nationalism, and danger of conflict. The widespread debt crisis in developing countries is another situation which at one point could easily have led to confrontation between debtors and creditors and may do so again. The marginalisation of Africa is a sufficiently serious problem to require global action and contain the seeds of future conflict if allowed to continue.
In addition to this globalisation resulting in an increasing tendency for national problems to spill over into global problems calling for effective treatment at UN level even in the absence of direct military international conflict, there is also an increasing realisation that preventive action is much cheaper than waiting for these problems to develop into military conflicts. The need for, as well as the scope for, preventive diplomacy has been emphasized by the UN Secretary General in Agenda for Peace. We know from the operation of early warning systems for crop failures operated by the FAO that early warning can save money as well as lives, provided it leads to early action. An ESC with an effective secretariat could be the natural channel for receiving such early warnings and for preventing the manifold localised deprivations from reaching a scale where they spill over across national boundaries. Such a wide agenda certainly suggests that the ESC should be in continuous session and form special negotiating groups (possibly in the form of ESC sub-committees) to deal with the major problems identified above.
This last point leads us to the question of the more specific composition and working methods of the ESC. In formulating suggestions in this direction the closest existing blueprint is the proposal for a 'World Economic Council' arising put forward by WIDER as a follow-up to their proposal for a Group of the Non-Five. 12 As part of this proposal they suggest that the Non-Five group should merge with the G5 (or G7) to form a 'World Economic Council'. The suggestion is for a governing body of 8-11 members; in the case of 11 members three would come from Western Europe, three from Asia and Oceania, three from the Western Hemisphere, one from former USSR and Eastern Europe, and one from Africa and the Middle East. This composition has been arrived at on the basis of a mixture of economic and social indicators, including GDP (on a Purchasing Power Parity basis), external trade and population. In the light of the agenda of the ESC, in which the problems of Africa figure so strongly, and the possibilities of constructive developments in the Middle East arising from recent peace moves might also be an important item, it might be suggested to increase the membership of the ESC to fifteen by giving Africa the same number of seats as Asia and the Western Hemisphere, i.e. three, and by giving the Middle East two seats by itself. This would weaken the position of Western Europe and the US (which would be part of the Western Hemisphere representation). This weakening should not be counter-balanced and made acceptable to Western Europe/US by watering down the mandate of the ESC to general and non-binding discussions and resolutions, but rather by making action dependent on a qualified - say two-thirds - majority in the ESC. Minorities would always be free to put forward alternative recommendations. The list of issues mentioned above makes it clear that in any case positions taken would often cut across a simple North-South divide.
The smaller size (around 10) of the WIDER proposals of around 10 members stems from its origin in balancing the G5 with a Group of Non-Five. However, elsewhere the WIDER study mentions the Committee of Twenty which proved to be an effective negotiating context in the mid-1970s for the development of proposals for the reform of the international monetary system and the Group on Supplementary Financial Measures work within UNCTAD in the mid-sixties to evolve compensatory measures for protecting developing countries against export shortfall. 13 The membership of the Committee of Twenty was arrived at by balancing the existing Group of Ten (industrial countries) with nine members of developing countries and a seat for Australia. If the membership were increased from 11 or 15 to 20, it would be possible to give greater representation to size of population (only 10 per cent in the WIDER proposals as against 45 per cent for GDP (on PPP basis) and 45 per cent for share in world trade.
If, instead of balancing the G5 with an equal number of developing countries, the G7 is taken as the starting point and representation from the Second World (Russia and Eastern Europe) is added, we would also arrive at a membership of around 18. Special reserved membership for China and India outside the normal calculation, to give greater weight to population would bring membership up to twenty.
The structure of an ESC would thus be a body of 10-20 members meeting all year round to receive reports and recommendations of smaller negotiating groups on subjects referred to them by the ESC, such as the above-mentioned threats to peace and economic security as debts, Africa, changes in IMF/World Bank structural adjustment requirements, AIDS, migration, refugees. In addition, the ESC would deal with direct economic threats to peace referred to it by the Security Council or by the Secretary-General. It would also deal with Security-Council-related matters, e.g. to devise methods of sanctions which protect vulnerable civilian populations and compensate poorer third parties for losses incurred as a result of the implementation of sanctions. The ESC in turn would put before the Security Council direct threats to peace arising from deterioration of economic conditions in sensitive areas. Another standing subject of the full ESC would be recommendations concerning the improved working and co-operation of UN agencies. The ESC would give special attention to 'interface' problems falling between or cutting across agencies, e.g. links between trade and finance, environment and employment, structural adjustment and labour markets etc. The economic problems of specific regions, e.g. Africa or Palestine, are also typical cross-agency matters.
The smaller negotiating groups dealing with specific problems would have flexible structures and procedures depending on the nature of the problems with which they are concerned. The group dealing with Africa should obviously have stronger African representation and base its secretariat in the ECA; the group dealing with debt and structural adjustment problems would be based in the Bretton Woods institutions, the group dealing with migration and refugees would be based in the HCR, the group with AIDS in the WHO, etc. Each group would be given a definite time limit to report back to the ESC with agreed recommendations and action programmes for all UN agencies (as well as governments). This would enable the ESC itself to schedule its meetings well in advance and give consideration in depth to the selected 'topic of the month', in addition to its continuing functions of dealing with potential economic threats to peace and problems of rehabilitation after military conflicts, in collaboration with the Security Council.
Obviously, in the initial years procedures would evolve in the light of experience. For this reason, the different negotiating groups might well deliberately adopt different procedures. The groups could well co-opt professional experts to participate in their work as well as request advice from consultants. But the ESC itself, like the Security Council, should be composed of diplomats of ambassadorial rank, with economic and social competence and fully representative and in touch with their constituencies.
The recommendations of the ESC should have priority status on the agenda of ECOSOC (assuming that ECOSOC continues as at present) and the General Assembly. The recommendations of the ESC should be given priority over the mass of routinely recurring items now clogging up the proceedings of the General Assembly and ECOSOC. This would enable these organs to have a more concentrated and higher-priority agenda and achieve greater effectiveness. Similarly, the relevant recommendations of the ESC should be placed on the agenda of the annual meetings of the IMF and World Bank, and their relevant Committees and their Directors, as well as the governing bodies of the UN Specialised Agencies concerned.
7. With some understatement, Mason and Asher in their standard history of The World Bank Since Bretton Woods Washington DC, Brookings Institution (1973) describe the negotiations as 'not particularly cordial' (p55).
8. Frank Vogl (former Director of Information and Public Affairs at the World Bank) in 'Revisiting Bretton Woods - Reforming the World Trade and Finance System' in Development and Cooperation No 4/1993, published by Deutsche Stiftung für internationale Entwicklung (DSE), Frankfurt, Germany.
10. Originally proposed by Thorvald Stoltenberg of Norway at the 25th Anniversary of the OECD Development Centre in 1989.
11 . World Economic Summits: The Role of Representative Groups in the Governance of the World Economy WIDER Study Group Series No 4 published by the World Institute for Development Economics Research of the United Nations University, see especially Appendix A by Stephen Marris 'A Proposal to Create the "Group of the Non-Five"'.