UK's Brown: G8, UN Need To Reflect "New World Order"

By Andrew Peaple
Dow Jones Newswires
Jan. 19, 2007

BANGALORE -(Dow Jones)- U.K. Chancellor of the Exchequer Gordon Brown said Wednesday that multilateral institutions such as the Group of Eight leading nations, the United Nations and the International Monetary Fund must reform to reflect a "new world order" in the global economy.

Speaking to the Confederation of Indian Industry in Bangalore, Brown said that the emergence of countries such as India necessitated changes to the membership and operations of such global bodies.

In particular, he called for the formalization of a process begun during the U.K.'s presidency of the G8 in 2005 whereby countries such as India, China, Brazil and South Africa have been invited to attend part of the group's meetings as well as meetings of the Group of Seven finance ministers.

"It is time to formally recognize on a more consistent and regular basis the reality of this emerging new world order," Brown said.

Brown also said the U.N. should be reformed to reflect the contribution to its operations from countries such as India, adding that he backed Indian membership of the U.N. Security Council.

The chancellor said that the purpose of both the IMF and the World Bank should be updated for the modern era.

"The IMF and World Bank...cannot be effective unless they are modernized to reflect the emerging world order - the IMF to ensure the stability of the whole world economy, with its primary role no longer to manage balance of payments crises but on crisis prevention through the surveillance of our economies," he said.

Brown said the World Bank's focus should now be on "energy security and environmental care."

Brown's speech comes at the start of a three-day visit to India, intended to promote economic ties between the U.K. and India.

It is also a chance for Brown to project himself on the world stage, as he prepares for his widely expected succession to the post of prime minister later this year, after Tony Blair steps down.

During his wide-ranging speech Brown emphasized that the role of the U.N. should be as an "effective peacemaker and peacekeeper." Brown praised the global leadership of Blair, but the tone of his speech differed from the current prime minister's emphasis on the need for the U.K. to have an interventionist foreign policy.

"The emerging new world order cannot work unless we act on the recognition that we are in an age of interdependence," Brown said. The chancellor said that this "new world order" should reflect not just military and political power, but also "the seismic shift in social and economic power brought forward by globalization."

The chancellor again called for a resumption of stalled World Trade Organization talks, the so-called Doha round. He and other G7 finance ministers have recently called for the talks to start up again, fearing the reemergence of protectionism around the world should they fail, with detrimental consequences for global growth.

"A resumption of the negotiations to secure a fair deal on free trade is both necessary and urgent," he said. The chancellor said that although "time was short," he believed there was the will from the U.S. and Europe to make concessions on agricultural subsidies, and that other major parties would follow suit.

Regarding the trade relationship between the U.K. and India, Brown said he welcomed the fact that India is now the third-largest source of foreign direct investment into the U.K.

He said that in turn, the U.K. hoped to increase its exports to India, doubling their size by 2010 and quadrupling them by 2020. Currently, U.K. exports to India only account for just over 1% of the total.