T

he world is biting its finger while witnessing how the world’s geopolitics and economy are shaping up. The Doha Round is on life support and the OPEC talk on June 8 to increase the world’s oil supply broke down. While the fate of Libya still looks unhopeful, Syria stands on the wing of another Allies’ military interventions in North Africa and throughout the Middle East.

The world becomes an economic and political arena of power-fighting: Developed versus emerging and developing countries, BRIC vs. G7, and even among the BRIC nations themselves. Meanwhile, poorer and the poorest countries with small wealth-shares in the global economy remain under-represented. Global political governance is an implausibility, but has the time for global democracy come?

The G20 is expanding its agenda — from the financial, fiscal and monetary agenda to the development and anticorruption agenda. A question is raised on whether it should expand its discussion to political issues, such as the UN Security Council reform and democracy. The answer is somewhat nuanced than a plain “no”. The G20 should avoid a political discussion at the summit because it may ruin the global economic cooperative spirit that the G20 strives for.

The G20 should learn this from the recent OPEC talk on June 8 that was overshadowed by political tensions between the US and oil-exporting countries like Iran and Venezuela. The Bali Democracy Forum is one possible forum to talk about democracy issues. But, what the G-20 can do is to promote “global democracy” as a part of global governance reform that is legitimate and credible.

We need global democracy because economic globalization has increased inter- and intra- inequality; national policies have cross-border impacts — both in poor and rich nations — but countries with small wealth-shares in the world economy are not fairly represented, if represented at all, in global institutions; the IMF, World Bank, WTO, and other international financial institutions (IFIs) remain largely answerable to industrialized nations; many decision-making processes of IFIs remain opaque; and wars are often waged in the name of democracy and freedom.

The world has always been in need of global democracy, but only recently was the world awakened to the voices coming from the emerging economic clout, namely the BRICS, including their demand for a new leadership of the IMF that is not based on nationality. Their voices were heard because of their economic power.

To promote global democracy, the G20 should strengthen the democratic structure of international financial institutions (IFIs). The IMF quota and voice reforms with the goal to continue the dynamic process of adjusting quota and voice shares to reflect shifts in the global economy must be completed.

As reiterated at the G20 London Summit 2009, “the heads and senior leadership of the IFIs should be
appointed through an open, transparent, and merit-based selection process.”

Financial regulatory reforms must also be pushed for. The G-20 should help to amend the current financial system that privatizes gains and socializes losses, otherwise financial and eventually social stability will be at stake. Macro-prudential tools that measure systemic risks of an individual bank and cross-border regulatory coordination are needed.

Institutional reforms at international organizations should also include pushing to make decision-making processes more transparent. We want to avoid the so-called the WTO’s “green room”, where the agenda was pre-set and the results were pre-determined.

Lastly, the G20 must continue to improve its legitimacy by reaching out to other non-G20 members,
and protect the voice of the poorest nations, as well as to bring to the G20 table issues related to the impacts of economic globalization including inequality. The time is now, not later.

US President Obama in his address to the British Houses of Parliament on May 24, 2011, stated that the rise of superpowers such as China and India did not mean the end for American and European influence in the world.

In a globalized world, all nations become one global nation, and hence the fair representation of voices from all nations — rich and poor — needs to be protected.

We try to avoid one-power dominance within a nation, but we must also remember that we want to avoid one-power dominance, or two-power dominance, or hegemony of a group of nations, within the global world. BRIC strikes a balance between emerging countries and the hegemony of the G7. But, it must also be remembered that BRIC, or any other coalition, does not need to form a caucus, although caucusing is encouraged. The G20 should preserve this multilateralism. It is not the time for rivalries of power, but managing voices.

The writer is a researcher at the Centre for Strategic and International Studies, Jakarta, and a lecturer at the Department of Economics, University of Indonesia.