The Black Vault

Dennis Shanahan, New York | September 25, 2009

Australia's Prime Minister, KEVIN Rudd has delivered a strongly worded warning to the UN that reform is necessary in global institutions and declared the G20 should be at the heart of a new international system.

The Prime Minister's campaign for a central role for the diverse group of developed and developing economies in the G20 reflects a growing theme among leading nations to streamline global decision-making and yet include key nations such as China, India and Brazil.

Yesterday at the UN General Assembly, US President Barack Obama and the leaders of several other countries indicated that the G20 had a greater role to play.

Mr Rudd told the General Assembly the recession and the failure of the international economic system had hurt workers and families.

Earlier, he said at a luncheon the UN and the International Monetary Fund had become static and UN membership had grown bloated and unmanageable. But he told the General Assembly that the G20, a much smaller but still representative group, had been able to respond to the crisis.

"While our global economic system failed comprehensively to prevent this crisis, the G20 governments have rallied to reduce the damage and prevent systemic collapse," he said.

"Through the agency of the G20, for the first time involving heads of government from the major developed and developing economies, governments acted in concert. The IMF has assessed that these extraordinary interventions succeeded in breaking the fall in what was an economic crisis spiralling out of control.

"But the truth is our global economic recovery is far from certain and many twists and turns lie ahead. Furthermore, the institutions of global economic governance are facing new challenges."

Mr Rudd is conducting a campaign to get the G20 recognised as the driving force in world affairs.

He listed three main aims for the group. "First, the financial market reform program must be completed and implemented to prevent a future crisis.

"Second, in anticipation of global economic recovery, we must agree on a framework for the co-ordinated withdrawal of our emergency interventions.

"And third, and most critically, we must articulate a new framework for sustainable future economic growth."