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2009-09-30

G20 governing issues

Comments on Paul Kelly “G20 the world's best hope”, 30/09/2009, http://www.theaustralian.news.com.au/story/0,25197,26143439-7583,00.html

The argument that "the risk is that the G20 will be too large and ineffective" has some practical implications and should not be ignored and must be addressed.

One way is to design an effective governing structure within the G20. A similar style to standing members of a much smaller core, say 5 among them, should have a permanent office during the off summit seasons/times. This office can coordinate and implement policies more effectively and mare efficiently and more timely.

The second point is that rather than having consensus of all members, it should adopt a substantially majority, say, two thirds or 4/5 to agree.

Thirdly, it may adopt a combination of voting mechanism of the UN assembly and the IMF, so to reflect both demographic representation and real economic impact.

Fourthly, the memberships should be updated periodically, say every 5 years based on clear criteria agreed by the members.

One possible criterion is a top economy in each broad continent.

The rest can be selected by the size of a country's economy. This should be based on a combination of measures based on both market exchange rate and purchasing power parity (PPP) done by UN.

The current members should last for 5 years and then the new criteria should be used to determine the membership of the next G20.

In the way it combines pragmatism, rationality and common sense.

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