Business

Thursday October 22, 2009

Crisis points to lack of governance

By EILEEN HEE


KUALA LUMPUR: The global financial meltdown showed “all too clear” that the international financial architecture was inadequate in facing a crisis of that magnitude and remains so, said Sir John Bond, chairman of the Vodafone Group.

“When we turned to global markets, the inadequacy of global governance is all too clear,” he said at a dinner lecture entitled “Development in the Changing World” organised by Khazanah Nasional Bhd.

“This was painfully obvious in the reaction to the financial crisis from the summer of 2008 onwards,” Bond said. “Decisions, which had to be taken urgently, were taken (only) at the national level even though the financial institutions involved – and even more so the transactions which were unwinding, were international.”

Sir John Bond ... ‘The inadequacy of global governance is all too clear’

He noted that “even though the impetus for change is now abating as financial markets slowly normalise, we are not much closer to building a stronger international framework.”

Bond also said the WTO ought to have created a level playing field in trade based on the same rules for all, but noted that many WTO member governments had negotiated regional and bilateral trade deals, which have undermined open global markets.

“Jagdish Bhawati of Columbia University has described this as a noodle bowl of complex rules and arrangements, and the metaphor seems very apt.

“This is an issue of great importance to Malaysia, which WTO has again ranked as one of the world’s leading trading nations,” he added.

Bond said the openness of the world economy as a whole, and trade contributin to economic growth, has given Malaysia an enormous stake in ensuring the system functions effectively and “in as fair and as open as we can make it.”

  • E-mail this story
  • Print this story