Why it is Important
The current global governance architecture, established post-WWII (Bretton Woods), is increasingly seen as outdated and unrepresentative of the rise of emerging economies like India.
Key points for Prelims
- IMF & World Bank: IMF focuses on macroeconomic stability and balance of payments support; World Bank focuses on long-term developmental loans and poverty reduction.
- UN Security Council (UNSC): Consists of 5 permanent members (P5) with veto power and 10 non-permanent members elected for 2-year terms.
- Voting Shares: IMF voting power is determined by quotas, which developing nations argue are skewed in favor of Western economies.
Mains Relevance
Inability to address geopolitical conflicts, coordinate global debt restructuring, or mobilize adequate climate finance highlights the gridlock in these multilateral bodies.
Way Forward
Reform the UNSC veto system and expand permanent membership (G4 initiative), revise IMF quotas to reflect current economic realities, and strengthen voice of Global South.
Additional Examination Context and Strategic Importance
From the perspective of competitive examinations, particularly the UPSC Civil Services Examination, this topic demands a multidimensional analysis. Aspirants should focus on integrating this current event with core static syllabus areas such as Polity, Economy, Geography, or Environment. Evaluating the broader socio-economic implications, examining relevant constitutional provisions or international treaties, and understanding the government's policy response are critical. A holistic approach that connects current developments with historical background and future projections will significantly enhance answer writing skills in the Mains examination and aid in tackling complex analytical questions in the Prelims.