China Rallies G77 Countries for  Reform of WTO,  World Bank, IMF

Ndubuisi Francis in Abuja

China is rallying the Group of 77 developing countries to push for reform of the global governance system which, according to some leaders in Africa, Asia and Latin America,  disproportionately favours the West.

Chinese vice-premier Liu Guozhong, said developing countries, “should jointly support the reform of the World Trade Organisation (WTO) and the international financial system.”

Liu was speaking in Kampala, Uganda at the third South Summit – the decision-making body of the 134-country G77 and China, which does not consider itself a member of the group.

 Uganda also assumed chairmanship of the group at the meeting, taking over from Cuba.

China joins a growing list of countries, especially from Africa and Asia, that had been piling on the pressure for a reorganisation of the global political and economic order – especially the UN Security Council and the WTO, as well as the World Bank and the IMF.

The increasing calls for a review of the Bretton Woods institutions–IMF and the World Bank were based on concerns that their structure, location and mandate were no longer fit to deal with changing global trends.

The United States played an outsize role in the creation of the IMF and World Bank and continues to command considerable influence, as one of the largest shareholders in both organisations, which are also headquartered in Washington DC.

Liu’s call to reform the WTO comes a few months after Chinese President Xi Jinping urged more effort in reforming the organisation, which has become the world’s largest goods trader and a key partner for more than 140 countries since China joined in 2003.

Liu, who is attending the summit as Xi’s special representative, said  it was crucial to make international development agencies more efficient in supporting countries in the Global South – broadly categorised as Latin America, Asia, Africa and Oceania.

He said: “The collective rise of the countries of the Global South is unstoppable, yet the unjust and inequitable international political and economic order from the past continues to have lingering effects.”

 According to Liu, as part of China’s initiative to reform the global financial system, Beijing had helped to establish the New Development Bank, the Asia Infrastructure Investment Bank and the Silk Road Fund.

These institutions are providing alternative lending for countries that cannot access international financial markets, and have funded mult-ibillion projects in Asia and other overseas markets, he said.

He noted that developing countries, especially those in the Global South, should raise their representation and voices in meaningful ways to tackle the age-old problems of international governance.

At the same time, he urged developed countries to deliver on their development and climate financing commitments, and to speed up implementation of the 2030 Sustainable Goals Development (SGD) agenda.

“China supports countries of the south to realise common development,” Liu said. He added that his country was doing its part, with investments through initiatives such as the Belt and Road Initiative and the Global Development Initiative.

Liu highlighted the more than 3,000 belt and road projects, worth more than US$1 trillion, that China has bankrolled around the world in the past decade.

Xi had, “underlined that China is a developing country and one of the Global South countries” and had stood with fellow developing countries “through thick and thin”, Liu said.

He added that South-South cooperation would continue to be a priority.

Liu’s sentiments won support among the leaders present, including UN Secretary-General Antonio Guterres, who was also encouraged by Liu to nominate a special envoy for poverty eradication.

In his address, Guterres said the international system is “out of date, out of time, and out of step, reflecting a bygone age when many of your countries were colonised”.

“The United Nations Security Council is paralysed by geopolitical divisions. Its composition does not reflect the reality of today’s world. It must be reformed,” he added.

The UN chief said the global financial system, including the Bretton Woods institutions, had failed to provide a global safety net for developing countries in distress.

But he added that the Summit of the Future, taking place in New York in September, would be considering “deep reforms” to the international financial architecture.

Dennis Francis, president of the UN General Assembly, told the gathering that multilateral organisations – including the United Nations and international financial institutions – must undergo urgent reforms to better recognise and leverage the significance of the Global South.

“We need an international financial system rooted in inclusion and equity, inspiring full commitment to multilateralism, fostering SDG-aligned investments, and breaking the vicious cycles of debt and interest for developing countries,” Francis said.

In his first speech as chairman of the G77 and China, Ugandan President Yoweri Museveni rallied the leaders to remain united in their demands to the international community – to support developing countries to urgently address global challenges such as poverty, hunger, the digital divide and climate change.

“As the G77 and China, we should continue to work collectively to ensure that we achieve an international economic order that is just and equitable, as envisaged 59 years ago at the founding of the group,” Museveni said.

He added that Uganda supports the urgent reform of the international financial architecture to ensure that it is fit for purpose to respond to the financing needs of developing countries.

Since its inception in 1964 as a group of 77 developing countries, the G77 has promoted economic cooperation among its member states. Beijing has provided political and financial support to the grouping since 1994.

Seifudein Adem, an Ethiopian global affairs professor at Doshi¬sha University in Japan, said that the G77 and China, like the Non-Aligned Movement (NAM), seeks to represent the interests of developing countries.

“China has almost ceased to be a part of the Third World. It is regarded today as a superpower. Yet some observers see China’s interests as aligning or at least intersecting with the interests of G77,” Adem said.

“Unlike the NAM, which suffered a crisis of purpose with the end of the Cold War, the raison d’etre of G77 remains valid,” he said, pointing out that the international political and economic conditions which led to the G77’s formation are still there