5.- AN ECONOMIC SECURITY COUNCIL AND
CONCLUDING REMARKS



    A n     E c o n o m i c     S e c u r i t y     C o u n c i l

The other major lacuna in existing arrangements identified in the Panel’s report is the absence of an apex organisation with political legitimacy. There is no authoritative international body with a remit to ask the sort of question about whether the world needs an ITO that was discussed in the previous section of this paper. There is certainly no international body that would consider asking whether there is any justification for maintaining UNIDO! The G-7/G-8 is doubtless the closest the world currently has to a body with the necessary political clout, but since its members include less than 15% of the world’s population, it is difficult to regard it as having political legitimacy. The United Nations Security Council does not deal with economic matters, and the General Assembly—like the Economic and Social Council--is far too unwieldy. The G-20 has no capacity to meet at summit level. There is simply no body that is capable of (and has a responsibility for) giving overall direction to economic policy.

Does that matter? Does one believe that the transition was handled as well as could reasonably be expected, or would it have been better to create special ad hoc arrangements, with adequate financing, to assist this historic process? Was the East Asian crisis inevitable, or might it have been avoided if there had been a body with the authority to counteract the pressure from Washington to liberalize capital accounts rapidly? Is tax erosion a matter of little consequence, or is there a case for an ITO? Is it time to ask whether the world is getting value for money from UNIDO? Should we be asking whether to consolidate the various international bodies with environmental responsibilities into a single GEO? It seems to me that there is a prima facie case for believing that an Economic Security Council would have more than enough work to do, even if it did not supplant the G-7 summits, for which a case might also be made.

In terms of organization, the report echoed the view of the Commission on Global Governance (1995) that it would be important to the effectiveness of an ESC that it should be small in size, which they interpreted as meaning that there be no more than 23 members. The report pointed out that this would preclude adapting the UN Economic and Social Council, which has 54 members, to become an ESC (this idea sometimes circulates in UN circles). It mentioned that the Commission on Global Governance had "suggested that the world’s economies, in terms of GDP measured on a purchasing power parity basis, should be represented as of right." It went on to assert "Membership by these countries would be supplemented by a constituency system to provide balanced representation among regions and participation by some of the smaller States. One way of implementing this proposal would be for each of the five United Nations regional commissions to elect periodically one of their members to represent the smaller countries of the region."

It is worth noting that if the18 countries with the largest PPP-weighted economies are to be included as of right (18 is 23 minus 5, the number of regional UN commissions), one is getting close to the G-20 membership. In fact, the G-20’s 19 country members (the 20th member being the EU) comprise 18 of the largest economies, as measured by PPP. The missing country is Spain (#13), which is replaced by Saudi Arabia (#28). While Barcelona may not be the best place to say so, there actually is a certain logic in that replacement, in that Spain is the smallest country among the biggest 18 or 19 from a neighbourhood that is well represented while Saudi Arabia is the leading member of OPEC, a bloc of countries with an important strategic role in the world economy that probably ought to be represented in an Economic Security Council (See footnote).

In the end the Panel did not suggest any particular structure for an Economic Security Council or even advocate the creation of such a body. Instead, it suggested that the United Nations should convene a global economic governance summit on a one-time basis, and leave it to that meeting to decide whether it judged that it would be worthwhile perpetuating itself as an ESC. That would also give it the option of modifying its composition before institutionalizing itself.


    C o n c l u d i n g     R e m a r k s

Perhaps the proposals of the Zedillo Panel will be dismissed as wildly unrealistic. And perhaps they are. But once one starts to think about whether the present set of international institutions is the best possible set, I think it is difficult to argue that they are. It will be rather sad if the world allows itself to carry on indefinitely with an inappropriate set of institutions just because they happen to be what has been inherited from the past. If this project can do anything to avoid that danger, it will prove eminently worthwhile.



    R e f e r e n c e s

   Commission on Global Governance (1995), Our Global Neighbourhood (Oxford: Oxford University Press). 

   Esty, Daniel C. (1994), Greening the GATT: Trade, Environment and the Future (Washington: Institute 
        for International Economics). 

   G-8 Preparatory Conference (2001), Toward Shared Responsability and Global Leadership (Washington:
        Institute for International Economics). 

   Schott, Jeffrey J., and Jayashree Watal (2000), "Decision-making in the WTO", IIE Policy Brief 00-2 
        (Washington: Institute for International Economics).

   Tanzi, Vito (1999), “Is There a Need for a World Tax Organization?" in A. Razin and E. Sadka, eds., 
        The Economics of Globalization: Policy Perspectives from Public Economics (New York: Cambridge
       University Press).

   United Nations (2001), Report of the High-Level Panel on Financing for Development (the Zedillo 
        Report) (New York: United Nations). 

--------------
 Footnote:  The idea of giving a group of G-20 leaders an apex role was also advanced recently by a shadow G-8 (G-8 Preparatory Conference 2001), who suggested that the G-8 invite the leaders of the G-20 to join them before or after future G-8 summits.       Back to the text.


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