Create New Global Institutions

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In addition to reforming and strengthening existing UN bodies, there is a need to create a small number of new institutions at the global level under United Nations authority and oversight.  The following are five specific proposals:

International Insolvency Court: Most of the world’s poorest countries are under a stranglehold of unrepayable external debts, much of it accumulated under dictators who pocketed the money and left their people holding the bag.  As a result, many countries spend more on interest payments to rich financial institutions in the global North than they do on health care and education. These burdens have subjected heavily indebted countries to control by the World Bank and International Monetary Fund, which have tied access to new loans to market fundamentalist policy reforms.  In addition to expanded debt cancellation, new mechanisms are needed to help prevent future debt crises and to resolve disputes over sovereign debts in a fair and equitable manner. For more, see:

UN International Finance Organization (IFO): The proposed International Finance Organization (IFO) would work with UN member countries to achieve and maintain balance and stability in international financial relationships, free national and global finance from the distortions of international debt and debt-based money, promote productive domestic investment and domestic ownership of productive resources, and take such actions as necessary at the international level to support nations and localities in creating equitable, productive, sustainable livelihoods for all. The IFO would serve as a replacement for the IMF, but with full accountability to the United Nations. Lacking either lending capacity or enforcement powers, its functions would be to maintain a central data base on international accounts, flag problem situations, and facilitate negotiations among countries to correct imbalances.

A System of Regional Monetary Funds: Recognizing the legitimate need for access to short-term emergency foreign exchange loans, while also recognizing that finance should be local to the extent possible, we endorse the creation of regional monetary funds accountable to the member countries of their region. These regional funds would provide quick response, short-term emergency loans in the event of an unanticipated foreign exchange short-fall. Accountable to their region’s governments these regional funds would reflect regional sensibilities and interests. While all countries would be welcome to send representatives to their meetings as observers, no country should be allowed to be a voting member of more than one regional fund.

UN Trade Disputes Court: Steps toward the localization of production and consumption recommended in this report would lead to a reduction in the movement of goods between countries. Even so, the world will continue to need a system of rules to maintain the stability and fairness of the international trading system, because so long as there is trade among nations there will be disputes and the potential for abuse and coercion of the weak by the strong. As suggested earlier, UNCTAD might have a lead in the rule setting process. The UN International Finance Organization would track current account balances and raise a warning when international intervention is required.

There remains the need for a body to mediate and arbitrate trade disputes. To meet this need we propose the creation of a UN Trade Disputes Court. It would have a structure similar to that of the UN International Insolvency Court, with a Conciliation Panel to facilitate negotiated settlements between trading partners and an Arbitration Panel to make legally binding rulings based on the provisions of relevant international agreements — including treaties and declarations on human rights, labor, health and safety, and the environment — where parties fail to reach a voluntary settlement.

UN Organization for Corporate Accountability (OCA): Next to financial speculation, the greatest economic threat to the well-being of people and planet is the growth and abuse of unchecked corporate power. There are virtually no mechanisms in place at the international level for dealing with this threat and the Bretton Woods institutions regularly seek to block corrective actions at national levels. Corporations, many of which command internal economies larger than those of most states, move freely around the world buying off politicians and playing states, communities, and people against one another in a competition for the jobs, finance, and access to technology that corporations control. Shifting the responsibilities of the Bretton Woods institutions to UN agencies, rescinding structural adjustment programs, and canceling provisions in international trade agreements that place the interests of global corporations and financiers ahead of human interests will be major steps toward restoring the right and responsibility of governments to hold corporations accountable to public interests.

  • The primary function of the proposed UN Organization for Corporate Accountability will be to support national initiatives on corporate accountability through the provision of information and advisory services, facilitating negotiation of relevant bilateral and multilateral agreements and coordinated bilateral and multilateral implementing actions.  While enforcement authority will rest entirely with national and local governments, the OCA will provide both governments and the general public with comprehensive and authoritative information on corporate practices as a basis for legal action and for investor and consumer actions.

Sitglitz Commission Proposals

In the wake of the global financial crisis that erupted in 2008, proposals along these lines have gained ground.  A high-level UN commission on the financial crisis chaired by Nobel economist Joseph Stiglitz proposed wide-ranging reforms to the global financial system, including:

  • establishing a UN Global Economic Coordination Council as a more democratic alternative to the G20,
  • a new global reserve system to reduce dependence on the U.S. dollar,
  • a new international debt restructuring court,
  • consideration of new innovative financing mechanisms, including carbon taxes and financial transactions taxes, and
  • comprehensive financial market regulation to prevent future crises.

Nearly a year after the Stiglitz Commission first began making such proposals, however, there is little concrete evidence of significant reforms.  The world’s largest countries continue to assert that the G20 is the legitimate forum for developing international responses to the global crisis.  And yet as the G20 itself has thus far failed to achieve substantial progress, there may be increasing opportunities for global civil society groups to ally with progressive governments to push for a reinvigorated multilateral approach under UN auspices.

The idea that a grand alliance of developing country leaders, global civil society, and sympathetic politicians from the North might emerge with sufficient power to achieve sweeping institutional reforms at the global levels has a precedent in similar alliances between progressives in the North and popular leaders in the former colonies that resulted in the dismantling first of the trans-Atlantic slave trade and then of colonial empires following World War II.  Perhaps we will see a new cycle of liberation.