UN takes small step to restore global economic system

Global critics of the international financial architecture say the system is broken. As Brazilian President Lula da Silva said today in his speech to the United Nations General Assembly, it has become “the Marshall Plan in reverse, with the poorest financing the richest.” From realizing people’s socioeconomic rights to tackling climate change, the laws and institutions that make up the global economic system are seen as benefiting rich countries, while many governments, particularly in the Global South, lack the resources they need to realize everyone’s rights.

Despite Russia’s attempt to thwart the vote, UN member states on Sunday approved the “Pact for the Future,” which aims to revitalize global action to address the world’s most pressing crises, including the widespread failure to achieve sustainable development.

The Pact rightly recognizes “increasing catastrophic and existential risks” around the world and the need for international law, including human rights, to deal successfully with them. It also emphasizes the interdependence of sustainable development and human rights, and that this entails progress in areas such as universal health care, quality and inclusive education, and universal social security.

As one of the key tools for achieving these goals, the pact commits to reforming the international financial architecture (IFA). Buried in the pact is a potential milestone in this effort: a request that the UN Secretary-General establish an independent high-level expert group to develop recommendations for new measures of economic well-being that complement or exceed gross domestic product (GDP), present the recommendations at next year’s UN General Assembly, and launch a UN-led process to implement them. As the UN Special Rapporteur on extreme poverty and human rights has noted, the focus on GDP growth has contributed to rising inequality and environmental destruction.

The focus on economic indicators significantly broadens the vision for IFA reform, which has often emphasized giving historically underrepresented countries a greater voice in the governance of the International Monetary Fund and the World Bank and scaling up the financing available to them. Governance reform is particularly important and long overdue, as current structures reflect post-World War II colonial power dynamics, leaving governments most affected by these institutions with the least voice in how they operate.

The pact’s commitments to these two goals fall far short, but it is no small feat to transform a system that produces such vast economic inequalities within and between countries that undermine human rights. Doing so would mean shifting the economic paradigms embedded in the global economic system to put people and planet at the center in line with states’ human rights obligations, a concept the Office of the High Commissioner for Human Rights (OHCHR) and others have called a human rights economy.

While looking beyond GDP may seem like a technical point, it could herald a new phase in the demand for economic justice.