Policy Briefing on Global Policy Reform for the UN Secretary General
Definition of Context and the Problem
Governance in various countries and international organizations is a matter of special concern in the modern world and requires the adoption of strong policy measures that help enhance good governance. The world today faces various challenges emanating from poor governance issues prompting the need for the United Nations to develop sound governance policies that can help enhance the quality of administration across the globe. According to Wouters and Ryngaert (2004), there exist several challenges in the global governance of various organizations and governments because of the variations in interpretation of good governance across different platforms. Wouters and Ryngaert (2004) argue that the governance problem in financial institutions is interpreted on the focus of macroeconomic issues around the world while the political establishments’ rating of governance is based on human rights issues and adherence to the rule of law.
Due to the challenges facing various international organizations, it is important that the United Nations secretary general develop credible and efficient governance reforms to help enhance the quality of services offered by the organizations across the globe. The roles of various international organizations have shifted dramatically over the past few decades prompting the need for the adoption of good governance programs that help enhance service quality in line with the modern challenges (Kenen, 2007). The governance issue is a matter of global concern as majority of the affected organizations operates in several countries, hence, the need for the adoption of policy reforms with a global scope. Financial organizations play an integral role in moderating development around the world, hence, are best suited in launching reforms boosting global. The UN secretary general thus needs to oversee the development of global policy reforms on governance based on the specific needs of the affected entities. The best way to boost good governance around the world will happen through strengthening various institutions supporting good governance around the world in regional and national settings.
Governance in International Financial Institutions
The establishment of the Bretton Woods institutions after the Second World was a good strategy of helping the rebuild of countries affected by challenges that require financial support to help enhance their reconstruction. However, Wouters and Ryngaert (2004) notes that this institution faced several challenges while rolling out their programs across different countries. The researchers assert that corruption and weak institutions of governance were a major cause of the collapse of various programs rolled out in most developing countries. Through the analysis of Wouters and Ryngaert (2004), it is evident that the challenges hindering the efforts of various international organizations are known yet for several years no lasting solution has been set out to help ensure outright success of all functions of the international financial institutions.
It is important to note that international organizations such as the World Bank and the IMF have failed to achieve their objectives in various countries especially in the developing world because the international organizations operate on a rigid framework. The guidelines for undertaking various activities across different countries and regions originate from set macro-economic policies that do not conform to the actual needs of a people. The policy programs used by the international financial institutions such as the World Bank thus require massive reforms to help ensure they are designed to solve the individual needs of countries and people instead of using preset macro-economic programs that fail to address the exact challenges facing the people.
In the development of effective policy reforms to help enhance the quality of governance in various international financial institutions, it is important that the UN secretary general understands that most of the programs used by the institutions are badly biased and I urgent need for restructuring. In most cases, Wouters and Ryngaert (2004) note that the international financial bodies based their policy development on the macro-economic perspective of a liberal free market while in real sense the regions the policies serve have governments that influence their development cause. The global international policy reforms to be adopted in this case thus ought to factor the political issues of the regions they operate in and should engage governments in the development of various funding and financial support policies (World Bank, 2001).
The implementation of international organization policies in different countries across different regions is a tough task that requires flexible, tough and problem-specific policies to help ensure success in international financing. To begin with, the UN secretary general should note that the organizations identify corruption and weak institutional systems as the leading causes of the challenges they face in developing countries while failing provide adequate solutions to them. It is important that policy reforms be undertaken to help international financial organizations develop alternative efficient strategies such as running campaigns to sensitize people of the importance of their programs. Additionally, the organizations should engage directly with the local administrations in the development of their policies to help get sufficient backup and support that can help them succeed.
Based on the broad understanding of good governance, international finance institutions should establish guidelines that limit financial support access to institutions and governments that embrace good governance through adhering to human rights needs and democracy. Wouters and Ryngaert (2004) further note an error in the UN Millennium Declaration due to the fact the declaration proposes the need for good governance and respect for human rights yet fails to provide a distinct definition of good governance. For the UN to succeed in developing strong policies designed to enhance good global governance, it is important that reforms be adopted to help enhance the upholding of good governance by helping the stakeholders understand what is expected on them in the first place.
Kenen (2007) argues that the reforms in the international funding institutions because their services have been largely abused and misused by various countries. The policies guiding the financing of the international funding institutions were drafted long time ago and never factored issues like the dependence the fund creates in developing countries in addition to the burden it places on the citizens of developed countries. According to Kenen(2007), the current lending rates to developing countries are far below their market rates prompting the need to restructure the funding policies of the institutions to help deter overreliance on the fund by developing countries. The development of strict policies guiding the international monetary institutions should take place in time because the global challenges such as wars and the collapse of various economies may not end soon, hence, the need to act now. Additionally it would be of great importance if the institutions were to establish mechanisms to help ensure the disbursed funds serve the intended purpose to help mitigate the possibility of corruption in the projects supported by international funding organizations.
Governance in International Financial Systems
International finance institutions play an integral role in shaping the global financial landscape in the modern world trough their funding programs. Dunaway (2009) notes that the good economic governance across the globe is mandatory to help have a strong world economy. According to the researcher, globalization brings about an unavoidable international interaction between countries as economies interact in international trade prompting the need to have stable current accounts globally. Countries with stable current accounts face no challenges in local and international business dealings, hence, the need for advanced economic governance to help ensure mutual business interactions.
According to Dunaway (2009), the current global economic crisis pitting several countries and cutting across both the developed and developing nations emanates from poor economic governance. The main major global imbalances are attributed to the large current account imbalances of various nations resulting from the inability of countries to adopt strong economic policies guiding the investment and savings. The current account problems affected almost all countries in the world have existed for very many years and the international monetary organizations have noted the problems in various countries and developed policies to help guide recovery (World Bank, 2000). However, the adjustment of economic programs in line with the set global economic policies has always been delayed as countries tend to keep what keeps them growing and going despite the worsening of their current accounts.
Through early identification of the causes imbalance in current accounts, governments should embrace good governance and avoid straining their economies to help maintain a given development level. The main challenges of deficit current accounts are that it exerts upward pressures that lead to a rise in the interest rates and a decline in the exchange rate, which eventually leads to tough economic times. The recommendations set out by the international monetary institutions with regard to the measures to be put by all countries to help foster favourable balance of payments. Wouters and Ryngaert (2004) note that in the 2008 G20 summit, the global economic crisis was attributed to a failure of several governments to implement good governance in managing the current accounts over a prolonged period of time. The strategies used to advice countries to adhere to recommended favourable current account levels are very lenient such that most countries just opt to ignore them.
It will be upon the UN secretary general to understand the negative macro-economic impact created by the inability of several countries to abide by the set recommendations of favourable current account levels and strict propose new effective measures. With the help of international financial institutions like the IMF, the UN secretary general should be able to survey through various economies and recommend the desirable current account levels in addition to establish compelling frameworks that can force countries to make timely adjustments. The inability to force countries to respond to some given economic pressures in time resulting in a larger effect due to globalization is an unfortunate occurrence, prompting the need for necessary policy reforms to help achieve some set goals.
Through globalization, large countries like the United States direct interact with several nations on trade terms and once their current accounts are unfavourable, then the effects rakes through several other economies. The IMF can always note the sustainability of the current accounts of various countries in time and develop sufficient policy recommendations that can help mitigate large macro-economic effects. Good governance through adhering to the set policies and assigned global experts will always help countries avoid holding other nations ransom for the sake of growing and developing their own economies.
Good Governance and Globalization
The modern world is highly interconnected in cross border business activities, which many at times occur without the input of the existing regional governments. Various giant institutions expand across different regions and maintain a specific organizational culture despite the political regions their organizations lie. Reincike (1997) notes that globalization actually attempts to kill the sovereignty of countries as international transactions can happen through the internet without the direct input and regulation of individual countries. The ability of some organizations to run their credible administration practices through economies with negative cultures of is a great show of what good governance can do (Reincike, 1997).
Globalization ought to serve as a tool to enhance good governance as it boosts democracy by allowing organizations to interact on the global scale and not asa source of woes through manipulation of systems to serve as conduits of corruption (Nye and Donahue, 2000). Through good governance, countries enjoy the fruits of globalization by charging tariffs and other cross border charges for goods and services moving in and out of an economy (Reicike, 1997). The charging of high tariff rates against imported products kills the economic growth of the exporters of various products leading to a negative effect on the economic growth of several economies. Through good governance, countries set favourable exchange rates that boost regional and global economic growth.
Policy Recommendations and Suggestions
International Monetary Fund (IMF)
The IMF is a critical financial institution that helps bail out countries trapped in financial tragedies or hit with some severe catastrophes. Through the organization, developing countries access low interest credit to help them undertake various economic programs. The issuance of funds at the IMF is based on a set of guidelines that need reforms to help maintain high degree of relevance and credibility in the modern world. To begin with, the reforms at the IMF should come with a criterion of choosing who best qualifies for credit bailout and what the guidelines are for that (Buira, 2005). To help enhance good governance, the credit access at the IMF should be limited to countries that meet stipulated good governance practices while the interest rate should be factored based on the market rates of the borrowers and not on a preset rate that is too low for the markets of some countries. Through adjusted interest rates, developing countries will develop other financing outcomes and avoid always rushing for bailout at the IMF.
The other reform necessary at the IMF is the need to increase the member states to help more developing countries access the fund (Truman, 2006). The enrolment of more member states helps enhance the recovery of various countries trapped in some economic tragedies. The fund managers also have to institutionalize the need to have all countries seeking support produce documents that prove their commitment to good governance through reduction in corruption, increase in concern for humanity and the enhancement of democracy (Lane, 2005).
World Bank
Reforming the World Bank’s funding policies in line with the requirements of good governance is important in helping enhance the success of the international organization in executing its mandate (Bello, 2001). The World Bank should set good governance principles that should be abided to by all its member countries. The UN secretary general should adopt propose this reform to help ensure all the beneficiaries of the institution’s funding are devoid of bad governance practices such as corruption and abuse of human rights. The World Bank reforms should also factor the empowerment of institutions of sound governance in developing countries to help ensure issues like corruption and embezzlement of funds can be dealt with conclusively at the local stage (OSCE, 2001).
The reform of the World Bank’s financing process will also help ensure the institution avoids using skewed operational and financing models but rather adopt funding policies that factor the individual needs of countries (IMF and World Bank, 2007). This will help enhance good governance at the institution as it will shift from the predominant use of macro-economic frontiers and factor other important issues like the political and economic environment of a country before developing funding policies. Additionally, it will be very important for the institution to establish programs of directly engaging with the citizens to help sensitize them on the dangers of poor governance to help achieve liberal and informed societies.
To help solve the financial crises witnessed around the world due to poor governance, it will be important for the UN secretary general to empower surveillance bodies like the IMF to help them compel countries adopt recommended changes as professionally stipulated. The macro-economic effect of countries failing to adhere to recommended current account standards stifles the development of developing countries. This prompts the need to empower the IMF as an overseer of balanced current accounts across different countries.
Conclusion
Good governance is interpreted as the process of adhering to management and administrative practises that boost respect to human rights and upholding democracy around different countries and regions. The world faces several challenges resulting from bad governance and the inability to institute effective counter mechanisms allows bad governance across various organizations and governments to flourish. Most of the countries affected with bad governance are developing countries that have to deal with challenges such as corruption and abuse of human rights. International financial institutions such as the World Bank and the IMF are strategically positioned to help boost global good governance practises. The institutions’ ability to interact with institutions mandated with the enhancing democracy and upholding human rights around the world helps them serve as pillars that can help support good governance globally. Through the adoption of various good governance reforms, international institutions can be given strict guidelines that borrowers have to meet to help them access credit. It is upon the UN secretary general to ensure upholding of good governance across all the economies around the world.
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