President-Elect Barrack Obama should attend the upcoming summit of the G20 developing and industrialized countries in Brazil to show that the US has a truly international leader, Mohamed El-Erian, Co-CEO of Pimco, told CNBC Friday.
Countries who could help unlock the credit freeze are not taking part because they are under-represented in the decision-making process and the summit, which will take place between Nov. 8 and 9 in Sao Paolo, could shed a light on their role, El-Erian said.
"What we need is clarity. Clarity on the fact that our infrastructure is not the one we need for the world of today," he told "Squawk Box Europe."
"Europe's voting power in the IMF, Europe's presence in the G7 far exceeds its economic power today," El-Erian said, while countries such as China, India, Brazil and Russia are under-represented.
"Until we address that, the multilateral system will not have the legitimacy it requires to be a leader and address the world's economic problems."
There are countries which have cash surpluses and could step in and help lubricate the world financial system but "the scary thing right now is that the surplus countries cannot understand what's going on, in fact nobody can understand what's going on, they have gone to the sidelines and they're not committing," El-Erian said.
The members of the G-20 are the finance ministers and central bank governors of 19 countries: Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United Kingdom and the United States of America.
The European Union is also a member, represented by the rotating Council presidency and the European Central Bank.