Inclusive and Effective Global Economic Governance:A challenge of our times

Graduate Program in International AffairsPracticum in International Affairs Presentation

Client: United Nations Department of Social and Economic Affairs Strategic Planning Department

Aditi ShuklaManjola KarameMartine NedregårdMartin Wøldike

Advisor: Ambassador Rafat Mahdi

UN Resolution:

•Secretary -General’s Report

•Reaffirm UN’s role in global economic governance

Client

•United Nations Department of Economic and Social Affairs ▫Strategic Planning Division

Client Objective

•Find a solution to the current state of global economic governance

•Put the UN on center stage

•“In what way can the UN system be strengthened to play a leading role in global economic governance facilitating both more coherent and better coordinated multilateral policy responses to global challenges?”

Client Objective

Background• Failure of international community to handle

crisis through a representative body

• Weaknesses of current international economic system highlighted

• Current system inadequate

• How can the UN play a leading role?

Methodology

•Qualitative Research Methods

•Interviews with prominent UN Ambassadors▫G20 ▫Global Governance Group

Why the UN?

•Of its universal character with ▫Inclusive representation ▫Global outreach▫Long expertise

•Widely regarded as legitimate

•Can create international law

Dilemma:

•Efficacy v. legitimacy and inclusiveness

Deficits in Global Economic Governance

•Coherence

•Legitimacy

•Inclusiveness

•Effectiveness

Lack of Coherence• Myriad of actors, but little coordination

• Gaps to bridge and overlaps to break

• Will improve general effectiveness

• How to address the incoherence in a legitimate and effective way?

Lack of Legitimacy

•Need for inclusiveness/outreach/representation

•Need for effectiveness

Balancing Effectiveness and Inclusiveness

•Tradeoffs between effectiveness and inclusiveness

•What is the “optimal” balance?

Criteria• Criteria of the selection of the 47 countries in the

United Nations Economic Global Governance Council:▫ Population density▫ Nominal GDP▫ Number of states in the region

• Effectiveness and inclusiveness of a global economic governance body are most efficiently maintained through a model of regional representation

UN Regional Groupings• Council is organized in terms of the five UN Regional Groups:

▫ Africa —53 countries▫ Asia —53 countries▫ Eastern Europe —23 countries▫ Latin America and the Caribbean —33 countries▫ Western Europe and Others —28 countries

UNEGG Council Seat AllocationsAfrica Asia E.Eur LA&C WE&O

Seats 10 14 6 7 10

Total UNEGG Council Seats: 47

Population Sub-Group

•Population▫In order to represent countries with

substantial populations. ▫Countries with the largest population must

be present to make a substantial impact and effect a large body of people

GDP Sub-Groups

•3 subgroups dedicated to the three nominal GDP divisions of high, middle and low in the region:▫Economic diversity▫Seat eligibility

Baseline UNEGG Council Seat Allocations

Africa (53) Asia (53)E. Eur (23) LA&C (33)

WE&O (28)

Population +1 +1 +1 +1 +1High +1 +1 +1 +1 +1Middle +1 +1 +1 +1 +1Low +1 +1 +1 +1 +1Regional Seats 4 4 4 4 4

Seats Based on Percentage of World GDP•Proportion of seats should be allocated

based on the region’s access to the resources in question for the sake of effectiveness of the council- 15% threshold:▫Every 15% share of total world GDP a

region is allocated an additional seat.

Percentage of Total World GDP by Region

Region

Regional Nominal GDP/World Nominal

GDP % of Total World GDP

Africa 1,715,480 / 62,930,725 0.02725 2.7%

Asia 18,673,481 / 62,930,725 0.2967 29.7%

Eastern Europe 3,079,217 / 62,930,725 0.0489 4.9%Latin America & Caribbean 4,889,582 / 62,930,725 0.0776 7.8%Western Europe and Others 34,572,965 / 62,930,725 0.5493 54.9%

Calculation of “15%Threshold” Seats by Region

Region% of World GDP

Rounded Up

% of World GDP (Rounded Up) /

15 15% Rule Seats

Africa 3% 3/15 = .2 0

Asia 30% 30/15 = 2 2

Eastern Europe 5% 5/15 = .333 0Latin America & Caribbean 8% 8/15 = .533 0Western Europe and Others 55% 55/15 = 3.667 3

UNEGG Council Seat Allocations + World GDP “15% Threshold”

(53) (53) E. Eur (23) LA&C (33) WE&O (28)Population 1 1 1 1 1High 1 1 1 1 1Middle 1 1 1 1 1Low 1 1 1 1 1Open Seat 0 +2 0 0 +3Regional Seats 4 6 4 4 7

Total UNEGG Council Seats: 25

Open Seats• The region will be permitted to democratically

allocate their open seats as they see fit.

• There are no restrictions on the nomination for the seats other than membership in the region.

• Flexibility▫ Acceptance of the Council ▫ Encourage energetic participation.

UNEGG Council Seat Allocations + World GDP “15% Threshold”

(53) (53)E. Eur (23) LA&C (33)

WE&O (28)

Population 1 1 1 1 1

High 1 1 1 1 1

Middle 1 1 1 1 1

Low 1 1 1 1 1

Open Seat 0 +2 0 0 +3Regional Seats 4 6 4 4 7Total UNEGG Council Seats: 25

Population Size

•The largest populations must have a seat at the table as their decisions impact a large proportion of the global economy.

Seats Based on Percentage of World Population• The “>1% rule” will ensure that all member

states with populations exceeding 1% of the world population are eligible for nomination for the regional population seat.

• Each region is given an additional seat for every third country which accounts for greater than 1% of the world’s population.

Seats Based on Percentage of World Population

Region Countries with >1% of World Population

Number of Countries

Additional Population Seats

Africa Nigeria, Egypt, Ethiopia 3 1

Asia China, India, Indonesia,Pakistan, Bangladesh, JapanPhilippines, Vietnam, Iran

9 3

Eastern Europe Russia 1 0

Latin America & Caribbean

Brazil, Mexico 2 0

Western Europe & Others

United States, Germany, Turkey

3 1

Seats Based on Percentage of World Population

Africa Asia E.Eur LA&C WE&O

Population1 + 1 1 + 3 1 1 1 + 1

High1 1 1 1 1

Middle1 1 1 1 1

Low1 1 1 1 1

Open Seats0 2 0 0 3

Regional Seats5 9 4 4 8

Total UNEGG Council Seats: 30

Seats based on States to Seat Ratio•“10:1 ratio”– calls for the allocation of an

additional seat for every 10 member states in a region

Seats based on States to Seat Ratio

RegionNumber of

Member StatesNumber of

Member States/10“10:1 Ratio” Seats

(rounded down)

Africa 53 53/10 = 5.3 5

Asia 53 53/10 = 5.3 5

Eastern Europe 23 23/10 = 2.3 2Latin America & Caribbean 33 33/10 = 3.3 3Western Europe and Others 28 28/10 = 2.8 2

UNEGG Council Seat Allocations + 10:1 Ratio

Africa (53) Asia (53) E. Eur (23) LA&C (33) WE&O (28)Population 2 4 1 1 2High 1 1 1 1 1Middle 1 1 1 1 1Low 1 1 1 1 1Open Seats +5 2 + 5 +2 +3 3 + 2Regional Seats 10 14 6 7 10Total UNEGG Council Seats: 47

The UNEGG Council

Africa (53) Asia (53) E. Eur (23) LA&C (33) WE&O (28)

Population 2 4 1 1 2

High 1 1 1 1 1

Middle 1 1 1 1 1

Low 1 1 1 1 1

Open seat 5 7 2 3 5Regional Seats 10 14 6 7 10

Conclusion• United Nations is well-positioned to play a

leading role in shaping an effective, representative and coherent system of global economic governance.

• We endorse the proposed model for a UNEGG Council

Thank You!

•Alia and Mark

•Mr. Navid Hanif

•Ms. Madhushree Chatterjee

•The UN Ambassadors

•And of course, our Ambassador Rafat Mahdi