UN Secretary General António Guterres called for the reform of the UN Security Council and the institutions of the Bretton Woods system.
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According to him, “the Bretton Woods system and the Security Council reflect the balance of powers in 1945.”
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“The global financial architecture is outdated, dysfunctional and unfair,” Guterres told reporters on the sidelines of the G7 summit.
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As the secretary general pointed out, against the backdrop of economic turmoil caused by the COVID-19 pandemic and the conflict in Ukraine, she was unable to fulfill her “essential function of the global safety net.”
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“The time has come to reform both the Security Council and the Bretton Woods institutions. In essence, this is a matter of redistributing power in accordance with the realities of today’s world,” Guterres said.
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The third world monetary system was formalized by the Bretton Woods Agreement in 1944. The reserve currencies were the pound sterling and the dollar.
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However, it was the dollar that became the only currency partially convertible into gold, and, as a result, the main means of international payments. This system failed after only 23 years: its fall began with a slowdown in the economic growth of the major powers and was accelerated by several economic crises. Against this background, the United States received huge deficits in the balance of payments and to cover them unlimitedly printed dollars, which undermined the reliability of the currency. At the same time, the external debt of the United States grew, and gold reserves were reduced, as a result, the country lost the ability to freely exchange dollars for gold.
