Commonwealth leaders said international institutions such as the United Nations and the World Bank were inadequate in their response to a trio of global financial crises, calling on Tuesday for immediate reform. "Global crises required truly global and universal responses," said a statement at the end of the two-day conference of 12 presidents, prime ministers and their deputies in London.
"The inadequacy of the current responses calls into question whether incremental and ad hoc approaches to reform will create a new generation of international institutions fit for today's world." British Prime Minister Gordon Brown, at the close of the meeting, said bodies such as the International Monetary Fund were no longer fit for the purpose. "We acknowledge that we face and particularly the poorest countries of the world face three major crises," he told a news conference.
"We have food shortages, fuel shortages and oil price rises that have been incredibly damaging to all economies and the credit crunch which is affecting finance throughout the world." He raised the prospect of a new conference along the lines of the original Bretton Woods meeting that set up the World Bank, IMF and other bodies after World War Two.
The developed world credit crisis sparked by problems in the US mortgage market has hammered markets around the world, drying up access to capital while the poorest have been hit by food prices rising as much as 50 percent in recent months. At the same time, oil prices have hit record highs, registering their largest ever jump on Friday to nearly $140 a barrel. Brown praised recent reforms of the UN agencies to better co-ordinate, but said reform had to be more widescale.
The leaders did not outline precisely what reforms they wanted, but said they wanted institutions to be legitimate, have fair representation, be responsive, flexible, transparent and accountable as well as effective. Prime Minister of Trinidad and Tobago Patrick Manning raised the prospects of a global energy body looking beyond oil, perhaps helping raise capital for hydroelectric power projects in poor countries. He suggested that without proper coordination, some poorer countries would attempt to shift to nuclear power - bringing with it risks of accidents and terrorism.
Several leaders criticised what they described as excessively unregulated markets, which some blame in part before the credit crunch as well as for the savage volatility of food commodity and oil markets.
"The current financial crisis - how could it happen?" asked Tanzanian President Jakaya Kikwete. "That suddenly $500 billion has evaporated and the world now is inside a big crisis. We find that the IMF is mostly looking at developing countries. Who is overseeing Britain when there are economic problems? Who is overseeing the US? We think there is a need for a fresh look."