Bomi Akarakiri was a Leadership Programs junior fellow at the McCain Institute.
The Bretton Woods institutions –the International Monetary Fund (IMF) and the World Bank–were created in 1944 to enhance global integration. The following year, the United Nations (UN) was founded and became the largest International Governmental Organization (IGO). Although these institutions have helped to modernize and stabilize the world, there are criticisms that they promote Western superiority due to the imbalance of power. The voting power within the IMF is based on a country’s financial contribution. Therefore, countries like the United States, which has a voting power of over 17%, hold greater influence over smaller countries because their financial contributions grant them favorable powers like the ability to veto. Likewise, with regards to the World Bank, the greater the country’s capital stock, the greater the share of votes. Finally, in the UN, the Security Council (UNSC) is formed of five permanent members (the U.S., U.K., France, China and Russia) and 10 non-permanent members which changes out every two years. The P5 hold the greatest power within the UN because they are the central decision makers and have the power to veto decisions.
Despite this, organizations that once took a back seat in the Bretton Woods institutions and the UN are becoming more relevant in discussions on cooperation, security, and trade. The possible further expansion of organizations such as the North Atlantic Treaty Organization (NATO), the European Union (EU), and BRICS leads one to question why the world is seeing a rise in regional organizations. Perhaps factors such as war, the rise of non-Western states, and the development of countries’ economies have increased discussions on the need to reform traditional institutions or develop alternatives.
Russia’s full-scale invasion of Ukraine triggered discussions on the expansion of NATO and the EU. The IMF has approved a third review of Ukraine’s $15.6 billion loan program, and the UN has deployed over 1,400 personnel to provide aid to people affected by the war. Yet, Ukraine not being a powerful member within these organizations still raises concerns over the need for strengthened security – especially in the Balkan region. The annexation of Crimea in 2014 was a major act of aggression towards Ukraine, and it should have triggered a security response from leaders. But Russia, being a P5 member, was able to veto the UN resolution condemning the act. Although there were talks for Ukraine to join the EU in 2013 through an association agreement, intimidation from Russia led to the abandonment of the partnership by former Ukrainian President Viktor Yanukovych, which is arguably a decision that Ukraine is paying for now. The full-scale invasion has highlighted the need for protection in Europe as there are fears that the war may spread west. This is why citizens from countries that border Russia, such as Estonia, Latvia, and Lithuania, are already volunteering to serve in the military as a form of preparation.
Now, more serious discussions are being held regarding Ukraine’s accession into not only NATO, but the EU, as security and military alliances provide Ukraine with more manpower and resources to combat Russian attacks and contain Russian ambition. Joining the EU and/or NATO means that Russia would not be able to leverage its power as it did as a permanent member of the UNSC, thus highlighting an advantage regional institutions have over the traditional IGOs.
In addition to war, the rise of non-Western states and the development of countries’ economies suggests growing solidarity for a change in global order so that emerging states can have more representation. In a recent discussion with Carnegie Endowment for International Peace, South Africa’s Minister of International Relations and Cooperation, Naledi Pandor, stated that a main priority for South Africa is the reformation of the United Nations where African and East Asian countries are permanent members. In addition to this, Pandor argued for the establishment of post-WWIIreforms within Bretton Woods institutions where emerging states have a greater voice within International Development Financial institutions. Because of the veto powers of the United Nations Security Council, and the fact that the United States receives the greatest voting power in the IMF due to its financial contributions, these reforms seem unlikely. Perhaps this is why, instead of fighting a losing battle within the Bretton Woods organizations, powers like South Africa are shifting their attention to organizations like BRICS where they can leverage their influence. Non-Western states such as China and Russia are also shifting their attention away from traditional institutions because they can use alternative institutions like BRICS to cement their power, invest in multipolarity (as opposed to Western dominance) and reimagine the global order. With the expansion of BRICS to include Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates (UAE), members will represent 42 percent of the world’s population and 36 percent of global GDP– a force to be reckoned with in contrast to the current international world order.
So where does this leave the West? On the one hand, the West could choose to ignore calls for reform and continue to use its power in traditional institutions as leverage against other countries. However, by doing this, the risks of alternative organizations persist, and non-Western states like China and Russia would be able to change the world order to work in their favor. Alternatively, the West could invest in multipolarity and demonstrate the ability to evolve from the past and provide greater influence on emerging states, but this will require some forfeiting of power. As states become stronger, it will arguably be in the West’s greatest interest to listen to the cries for reform so that they do not risk losing out on diversifying their alliances. What is becoming clearer is that the world has changed from what it was when the Bretton Woods institutions were formed. So would it not also make sense for the institutions to evolve with the world?