According to UN Secretary-General António Guterres in a 2023 policy brief, the current international financial system, established in 1945 after World War II, is being put to a historic stress test and is failing to meet the challenge. Guterres points out that many developing countries are burdened with unsustainable levels of debt, hindering their ability to invest in crucial areas such as social protection and healthcare.
The urgency for reform is amplified by the approaching deadline to achieve the Sustainable Development Goals (SDGs) by the end of 2030. These goals were adopted by UN Member States in 2015 and the halfway point was reached in 2023. However, at the SDG Summit last September, it was revealed that only 15% of the goals had been met.
In his policy brief, Guterres proposes measures that could help lift countries out of poverty and enable them to reach their full potential. He calls for a “new Bretton Woods moment”, referencing the post-World War II agreement that established the International Monetary Fund (IMF) and the World Bank. These organizations determine how and under what conditions to lend money to countries in need of financial assistance.
The context in which the IMF and World Bank were created is vastly different from today’s political and economic landscape. Despite the IMF now having 190 member nations, developed countries still hold veto power and disproportionate voting rights, while developing countries remain underrepresented.
Guterres argues that the current system is no longer suitable for a world facing climate change, systemic risks, extreme inequality, gender bias, and other significant challenges. He suggests increasing financing to eradicate poverty and promote sustainability, making decision-making bodies of the IMF and World Bank more democratic and inclusive, and establishing a new overarching body to coordinate global economic decisions.
These proposals, along with the commitments made at the 2023 SDG Summit, will be discussed at the Summit of the Future in late September, and will also be reflected in the Pact for the Future, a document to be adopted by UN Member States. The Pact represents a pledge by all countries to use all necessary tools to address global issues before they become overwhelming. It commits signatory nations to taking bold actions to implement the 2030 Agenda for Sustainable Development, with a focus on ending hunger and poverty, reducing inequalities, and addressing climate change.
The Summit will also help build momentum for the International Conference on Financing for Development (Ffd4) in Spain in June 2025.