The primary goal of the Bretton Woods Committee is to support the key multilateral institutions whose primary responsibility is to promote strong, sustainable and balanced global growth. The Committee’s efforts are motivated by the conviction that systematic, principled and effective international cooperation is the surest means of achieving economic and social progress.
With the end of World War II, the principal multilateral institutions given these responsibilities were the newly-created Bretton Woods Institutions – the International Monetary Fund and the World Bank – and the General Agreement on Tariffs and Trade (now the World Trade Organization). Together, these institutions were hugely successful in creating an increasingly open and rules-based international system, and in promoting economic growth in the context of rapidly expanding international trade. These efforts were decisive in producing, over the following seventy years, the most rapid period of global economic growth ever recorded.
With the dramatic expansion of global markets and the gratifying success of many emerging market and developing countries in sharply expanding their relative economic weight while reducing poverty – especially since 1990 – the specific challenges facing the international system have evolved significantly. The Global Financial Crisis of 2008/09 resulted in another key institutional innovation; the creation of the Group of Twenty (G20) Leaders Summit process. This grouping – that represents two thirds of the world’s population, seventy-five percent of global trade and eighty-five percent of global economic output – describes itself as “the premier forum for…international economic cooperation.”
Thus, the G20 Leaders, acting through the Bretton Woods Institutions, the World Trade Organization, the Financial Stability Board and other multilateral institutions, have taken upon themselves the responsibility for achieving the primary goals that have been and remain the principal concern of the Bretton Woods Committee. Of course, the challenges created by the coronavirus pandemic are severe and unprecedented.
Scope of Work
In response to these new developments, and to the resulting widespread questioning whether the pre-existing economic and financial frameworks can and should be sustained in the coming years, the work of the Bretton Woods Committee is focused in three principal activities.
First, the Committee will promote understanding of the need for rebuilding an open, rules-based international system as the coronavirus pandemic eventually recedes. The pandemic is extracting a fearsome social cost: The global economy has been damaged seriously, international trade has suffered an unprecedented setback, and countries have tended to adopt a “go it alone” approach to policy-setting. Through outreach activities organized in cooperation with the Committee’s Advisory Council, the Committee will underscore that a restored and reformed international framework for cooperation represents the best option for renewed progress.
Second, the Committee will advocate for the key multilateral institutions of the international system. In many cases, the public and even public officials – including both regulators and legislators – lack a clear understanding of the roles and functions of these entities. The Committee’s activities in this regard work in two directions:
• The Committee will continue its long-standing efforts to provide important and regular forums for the interaction between key officials of the institutions, relevant private sector participants and academic experts.
• The Committee also will continue to organize meetings with government officials in order to make sure that they understand the role of these institutions. For example, the Committee organizes meetings with the US Congress – both members and staff – to help familiarize them with the structure and work of the IMF and World Bank.
Third, the Committee will provide input when appropriate to improve the performance of the system and the institutions themselves. In particular, the two great crises of the past decade and a half have demonstrated that the system lacks effective mechanisms for crisis prevention. For example, liquidity failures during the Global Financial Crisis resulted in the establishment of permanent unlimited currency swap facilities between six key central banks. Other central banks, however, still have no reliable access to such a backup. Some long-standing structural issues also remain unresolved: The 16th Review of IMF Quotas, originally committed by the G20 Leaders to be completed by January 2014, has now been postponed to December 2023.
More broadly, the Committee, working with the Advisory Council, will establish working groups to propose ways in which the system – and the institutions that comprise it – can be strengthened and made more effective.
To achieve these goals, the Committee seeks to sustain and expand its current, substantial membership ranks, while enhancing diversity in multiple directions, including geography, expertise and background. At the same time, the Committee is fortifying its organizational structure while insuring its financial sustainability. In this regard, the Committee looks to play an even more important role in promoting the international cooperation that will be necessary to repair and restore the global economy post-pandemic, and to once again achieve renewed social progress.