UN chief says 'time to reform' Bretton Woods and the Security Council

Antonio Guterres said the world is counting on the G7 to demonstrate global leadership and global solidarity

UN Secretary General Antonio Guterres shakes hands with Japan's Prime Minister Fumio Kishida at the G7 Summit in Hiroshima. Getty

The head of the UN called on Sunday for the reform of both the Security Council, its most powerful body, and Bretton Woods to align with the "realities of today's world".

Speaking at a press conference as the G7's three-day summit concluded in the Japanese city of Hiroshima, Antonio Guterres said “it’s time to reform” both institutions to “reflect the power relations of 1945”.

Referring to Bretton Woods, the deal signed in 1944 to shore up the global economy after the Second World War, Mr Guterres said “the global financial architecture has become outdated, dysfunctional and unfair."

“In the face of the economic shocks from the Covid-19 pandemic and the Russian invasion of Ukraine, it has failed to fulfil its core function as a global safety net,” he said.

Mr Guterres said reforms of power structures were crucial to align with the “realities” of the contemporary world.

He said the G7 can no longer be a bystander in a “multipolar world, as geopolitical divisions grow” when billions of people do not have enough food, water, education, health care and employment.

There is a “growing conscience” in developed countries, he said, that not “enough is being done” both to reform outdated institutions and to “remove the frustration of the Global South”.

“Even within the present unfair global rules, more can and must be done to support developing economies,” he told reporters.

If multilateral development banks would work together and change their business models and approach to risk, he suggested, they could leverage enormous amounts of private finance for developing countries at reasonable cost.

The UN chief expressed optimism about the potential impact of discussions held in Hiroshima, which is a “global symbol of the tragic consequences when nations fail to work together and settle their differences peacefully.”

The G7, which consists of Canada, France, Germany, Italy, Japan, the UK and the US, together with the EU, met in Hiroshima where the first atom bomb was dropped in 1945.