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Frames No Frame

WEF - Global Governance

The strain of interventionism has weighed down the UN. The IMF/World Bank are under intense scrutiny for their emerging market policy while the WTO faces growing criticism for its Seattle meeting. Are the issues more complex or is something lacking in the existing governance system? If so, are we beyond structural reforms? Is it time to draw up to a new framework for this century?

David Bryer, Executive Director, Oxfam, UK

David de Pury, Chairman of the Board and Partner, De Pury Pictet Turrettini & Co., Switzerland

Wolfgang H. Reinicke, Senior Partner, Corporate Strategy Group, World Bank, Wash., D. C.

Gordon S. Smith, Chairman, International Development Research Center; Professor of Global Studies and Conflict Prevention, Universities of British Columbia and Victoria, Canada

Heizo Takenaka, President, The Tokyo Foundation, Japan

Joseph S. Nye Jr., Dean, John F. Kennedy School of Government, Harvard University

Jospeh Nye:

We said that it was the failure of 19th Century globalization, that led to the great imbalance in this century and the interesting question for us is "will we do better with 21st Century globalization?" On the national side, after 1945, you had social security and openness. The more open the economy the better the social security system. On the international side of the governance of globalization, we had the UN Charter where states accepted limits on unilateral force which was the unthinkable in previous eras. We have with the UN charter, something quite extraordinarywhere you would need a Security Council Resolution. What you have are little islands of governance these were the GATT/WTO for trade, the IMF/WB for finance and NATO for defense.

The WTO has this dispute mechanism and if a country cheats on an issue, you have a hearing. This is like a fuse in the house, it is better that the fuse goes out versus the house burn down.

As our interdependence got deepertrade/labor, Seattle is partly about trade and labor. The question is "How to adopt islands of governance without destroying [them]? The answer is to allow NGO's participation which gives them a place at the table and gets them off the street.

Our first panelist is David Bryer, Oxfam.

David Bryer

One of the things which struck me here in Davosfrom Klau Schwab's remarks, to King Abdullah, to President Clinton's is a wide measure of agreement that the single biggest challenge which we are facing is the of poverty and inequality. It is incredible to sit here in Davos, one of the richest places in earth and to consider how one half of the world lives on less than $2 a day, and a quarter of the world lives on less than $1 a day. This has worsened in the last 10 years. The income gap between the richest and poorest 1/5 has climbed inexorably in the last century. It was 1:3 in the 19th century; 1:30 in the 1960's and 1:74 at the end of the 1990s. As the presdient of the United States said that we have to stop denying that there in an inequality gap and have to start explaining what we are going to do about it. So the question is what we could do about global governance which would help this challenge. We would have a system that genuinely looked to the needs of the whole planet and not manipulated individual nation-states and looked to the needs of the wholeI fear that is a long way off.

It will take more than a change in the chair of the U.S. Senator Foreign Relations Committee to get this sort of change. It will take decades....a more stronger, more coherent UN which is paid for out of some type of Tobin Tax that would guarantee long-term thinking independent from the pushing-shoving of particular nations.

What is most important is real coherence across all the different agencies . How to make the system more democratic and accountable.

On the democracy side, it is essential poorer and smaller countries need to have ways in which they can play a part of the debate and not just respond to decisions already made. The most recent UNDP report, "globalization with a Human Face" presents a whole series of suggestions. At the moment International Financial Institutions seem ineffectual and this was before Seattle. Need to find a voice of the ordinary people where it can be amplified. We can do that through national democratic systems and through gatherings of civil society like the landmine bans which is a way for civil society to get involved.

On the accountability side, although governments signed up for carrying out poverty reduction, that did not happen, those agreements have not been filled. The Jomptkin Agreement to get all children into school by 2000 failed. Both global governance and civil society have a role to play.

David de Pury

One of the problems we have is that we have a global world, and global market and are still governed by national rules and national leaders. That will remain so for a number of years. The rules which we havethe trade rules which came out before the Uruguay round, are light years away for what we would need in a global world in which every product, service is researched, produced, marketed , financed, and so on by multinational processes and not national processes. We need a system, in other words, a global system because not because we have too much freedom today and we should try to have less freedom, but if we want real freedom which is rules, because there is no freedom without rules, ...this is an issue of utmost urgency and obvious that neither governments or the private sector considers this urgent even though everyone talks about it. If you look at what is done about it, there is no sense of urgency.

There is a pressure coming from other quartersone is just realitywhere you cannot solve problems without international solutions and secondly there is this opposition which Bryer mentioned which is coming from all sideswe call it civil societythere are all kinds of people moving into this vacuum of democracy. We need to raise a sense of urgency and devote both government and private sector resources to this debate and to the complete debate. We do not need new gimmicsnew bodies, new tricks to create a global structureif we really want to move, we need to build up what we have on the present organizations, we need to work on three levels: the easiest level to work on and it is also the most important is the national levelbuild good national governance which can be built into international governance by mutual recognition of good governance. We need to build on the regional level and the global level because the global level is a reality. If you look at the WTO, and this is my conclusion, first it is important to have an organization based on a good consensus. Those who say the GATT/WTO should move to majority rule are wrong. Second, speed is of the essence. Negotiators and governments need to be more efficient. The Uruguay Round was seven years-- five years waiting and two year in negotiations. We need to avoid too many linkages. Linkages are extremely difficult so let's discuss logical thingslabor issues, and so on. Let's devote WTO to trade.

The package theory is the right theory. We need to build packages to come to results where everybody gives somethings and everybody gets something. E-commerce is an issue where we cannot wait. Finally, want to support David Bryer. Let's start by creating a consultative parliatmentary assembly at the WTO. This assembly would have no rights and no direct role in negotiations but it would get the national parliamentarians into the game. It would give them at least the beginning of the feeling that they are part of the game and that would be part of the way of dealing with a lack of democracy in this area.

Wolfgang Reinecke

JV Question: I have studied global governance for five years and part of my job is to translate on the local level that which is transpiring on the global level and that is not an easy job. I would like in order to understand--I like definitions--I have certainly heard what you said--and what I have seen is great change. When you look at a definition of global governance, I remember Saul Mendelovitz at the Gorbachev State of the World forum stating that " with global governance--Look we are hiding the real meaning global government", on the other hand, I have seen that global governance, over the years, is an interconnection of countries coming together for a common ideal, however, we have the impact of the information society and Internet which all of a sudden puts us in real time. Could you help consolidate a definition of global governance today in light of the hesitation of the United States. I think many people who I talk to haven't a clue as to what globalization will mean.

Moderator : ....the definition of globalization is interdependence global governance is a subject which Wolfgang wrote an article in Foreign Affairs about two years ago [November-December 1997 foreign Affairs]. Do it in two minutes or less (laughter)

Wolfgang I can do it in a shorter time than that (laughter) There is no global governance and that is a fact. At the national level, governance equals government, that is the institutional expression by which we try to deal with issues which cannot be resolved by what we would prefer as a collective mechanism--maybe market mechanisms . Alternative mechanism are collective actions which is translated into policy decision and legitimacy frameworks with government. We have no global government, we will never have a global government because it is illegitimate and ineffective. What can we find as alternative institutional structures to exercise the form of governance that allows us to get together to decide what is and what is not in the global public interest. We currently do not have those institutions. The international organizations founded in the 1950s were designed to deal with different issues which were create a global market economy. Now we have to address the other side of the same coin on how to create an institutional framework to deal with some of the negative effects which any market economy createswhether it is local, regional, local, national -whateverand we simply do not have it currently in place. Let me get back to the historical question which you raised. If you would have me what we could have done better, currently I would tell you no I think all odds are in favor of a massive backlash against globalization and here I would dare to disagree with (fellow panel member) that poverty is infectious and governments have two choices, either they deal with it at a global level or they immunize themselves from poverty by re-erecting national barriers for protectionism, capital controls, immigration controls and other mechanisms. That is the only terroitorial area where governments have power, where they can provide public goods and if we don't find an alternative mechanism they will resort to this level.