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Time to reform both Security Council and Bretton Woods system: UN chief

G7 calls for constructive and stable relations with Beijing

G7 leaders

Ukrainian President Volodymyr Zelenskyy, center rear, joins G7 world leaders at a working session on the final day of the G7 Summit in Hiroshima, Japan.

Agencies

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UN Secretary-General Antonio Guterres said on Sunday that it was time to reform both the Security Council and Bretton Woods to align with the "realities of today's world".

Speaking at a press conference in Hiroshima, Japan, where the Group of Seven summit meeting had been held, Guterres said both institutions reflected the power relations of 1945 and needed to be updated.

"The global financial architecture became outdated, dysfunctional and unfair," he said. "In the face of the economic shocks from the Covid-19 pandemic and the Russian invasion of Ukraine, it has failed to fulfil its core function as a global safety net."

Guterres also spoke of how he felt that at the G7 summit there was a growing consciousness among developing countries that not enough was being done to reform outdated institutions or "remove the frustrations" of the Global South.

The Bretton Woods system is a set of unified rules and policies that provided the framework to create fixed international currency exchange rates. Under it, gold was the basis for the US dollar and other currencies were pegged to the US dollar's value. The system came to an end in the early 1970s when the US announced that it would no longer exchange gold for U.S. currency. 

The G7 democracies united in urging China to pressure its strategic partner Russia to end its war on Ukraine and resolve territorial disputes peacefully, and China lashed back.

In a joint statement, the G7 leaders emphasised they did not want to harm China and were seeking “constructive and stable relations” with Beijing, “recognizing the importance of engaging candidly with and expressing our concerns directly to China.”

Meanwhile the G7 communique took aim at Beijing over "economic coercion" and said the group would pare back exposure to the world's second-largest economy in everything from chips to minerals to supply chains. In describing twin threats of Russian aggression and Chinese bullying, the leaders called on non-aligned countries such as India, whose Prime Minister Narendra Modi met Zelenskyy on the sidelines of the summit, to give full support to Ukraine.

The global financial architecture became outdated, dysfunctional and unfair. In the face of the economic shocks from the pandemic and the Russian invasion of Ukraine, it has failed to fulfil its core function as a global safety net”

António Guterres, UN Secretary-General 
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First Published: May 21 2023 | 11:23 PM IST

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