Leaders of some of the largest developing nations called for a new economic order based on their shared interests rather than “obsolete” financial institutions created after World War II.
The statements came at a summit of Asian and African countries held in Jakarta Wednesday to mark the anniversary of a similar gathering 60 years ago that helped established the Cold War’s non-aligned movement. In his keynote speech, Indonesian President Joko Widodo, known as Jokowi, said beliefs that entities such as the World Bank and the International Monetary Fund can solve global economic woes were “all obsolete ideas that need to be changed.”
“It is imperative that we build a new international economic order that is open to new emerging economic powers,” Jokowi told the meeting, which was being attended by representatives of 109 countries. “We call upon therefore for a new global financial architecture in order to avoid the domination of certain groups of countries.”
The summit takes place in a world vastly changed since leaders of developing nations -- many just emerging from colonial rule -- first gathered in the Indonesian city of Bandung in 1955. Attendees China and India are now members of the Group of 20 major economies and are demanding a greater say in international institutions and supporting new ones to speed the pace of change.
In his own speech, Chinese President Xi Jinping called on emerging economies to support each other’s growth. China’s $40 billion “Silk Road” fund and Asian Infrastructure Investment Bank would play key roles in promoting cooperation between Asian and African countries, Xi said.
“We should make great effort to promote Bandung Spirit, give it a new meaning in the new era,” Xi said. Developing countries must “push the international order and international system towards direction of greater justice and fairness,” he said, adding that China would within the year end duties on 97 percent of imports from the least developed nations.
Xi joined Widodo in urging richer countries to honor their commitment to mutual respect and equality and to increase assistance to developing nations with “no political strings attached.”
Both Japan and the U.S. cited concerns over governance and transparency in refusing to join China’s infrastructure bank, even as U.S. allies such as the U.K., Germany, Australia and South Korea signed up. The U.S. continues to support the Asian Development Bank, a Japan-dominated regional lender.
Tim Summers, a Hong Kong-based senior consulting fellow at the Chatham House, said that more action was necessary to ensure the global economic architecture responded to the global shift in power.
“If the West is prepared to respond to the demand for reform, then these emerging nations would work to reform the existing order, not replace it,” Summers said. “If the U.S. response remains the same as their response to the AIIB, then we should expect more uncertainty, and I think the emerging economies will continue to push for change.”
The first Asian-African conference in Bandung resulted in a 10-point framework on international relations, including political self-determination, mutual respect for sovereignty, equality and non-interference in internal affairs. Besides laying the foundation for the non-aligned movement, it also presented a united front against colonialism.
As the Asia-Pacific region’s historical power, China played a key role in the first conference. The Bandung gathering helped establish the basic principles of the Communist-ruled country’s foreign relations after emerging from civil war in 1949.
“The historical context is different now than 60 years ago,” said Shen Shishun, a senior researcher at the China Institute of International Studies in Beijing. “The developing countries have stronger wishes to be a force that cannot be ignored in world economic and political affairs.”