2017 Imperial Springs International Forum GLOBAL GOVERNANCE and CHINA’s PERSPECTIVE
Final Report
4 Foreword Table of Contents 2017 IMPERIAL SPRINGS INTERNATIONAL FORUM. GLOBAL GOVERNANCE and CHINA’s PERSPECTIVE Final Report
Foreword Zhou Zerong President of Australia-China Friendship 8 Dr Vaira Vike-Freiberga and Exchange Association President of the World Leadership Alliance-Club de Madrid and President of Latvia (1999-2007) Yukio Hatoyama Prime Minister of Japan Madame Li Xiaolin (2009-2010) President of the Chinese People’s Association for Friendship with Foreign Countries (CPAFFC) Romano Prodi Dr Chau Chak Wing President of the Council of Ministers of Dr. Chau Chak Wing, President of the Australia Italy (1996-1998), Member WLA-CdM China Friendship and Exchange Association George Papandreou Prime Minister of Greece (2009-2011), Member WLA-CdM 16 Meeting With President Xi Jingping Working Papers Program 44 Ramesh Thakur 20 Dr. Edward C. Luck List of Participants José Antonio Ocampo 24 Alexandre Likhotal Keynote Speeches Seán M. Cleary Donald Ramotar 26 President of Guyana (2011-2015) Background On Imperial Wang Chen Springs Member of China’s Politburo 94 Xie Yuan Vice-President, CPAFFC (Chinese People’s Forum Organizers Association for Friendship with Foreign Countries) 96 foreword
6 Dr Vaira Vike-Freiberga President of the World Leadership Alliance-Club de Madrid and President of Latvia (1999-2007)
Madame Li Xiaolin President of the Chinese People’s Association for Friendship with Foreign Countries (CPAFFC)
Dr Chau Chak Wing President of the Australia China Friendship and Exchange Association
7 dr Vaira Vike-Freiberga President of the World Leadership Alliance-Club de Madrid and President of Latvia (1999-2007) Foreword
Few will question that the multilateral institutions designed and established after World War II – basically, the United Nations and Bretton Woods organizations - served most nations well during the second half of the 20th century, meaningfully responding to major challenges such as decolonization, the end of the Cold War, global security and financial, trade and economic relations and development. Even though an intricate, more focused and much broader web of global, regional, formal and ad hoc multilateral organizations was also developed during the past 70 years, the core of our global governance system has remained basically unchanged and is increasingly being viewed as ineffective in tackling the multiple, complex and often transnational 21st century challenges.
Nowadays, many institutions are regarded as unrepresentative, feeble and even obsolete structures. Following from this, there is a significant decline in both institutional legitimacy and accountability, which leads to a perception of institutions not being sufficiently inclusive and unable to align decision making processes to changing dynamics in the international arena. 8 2017 Imperial Springs International Forum · Final Report
Times call for a profound reflection on the way to reshape the normative order behind today´s global governance, unlocking the capacity of new and old institutions in a context of unstable and unpredictable complexity –
ehind these Political will was harnessed of the 21st century that we perceptions lie and we find, particularly in are looking forward to. The Bimportant shifts in Agenda 2030, a universal need for a shared vision is the roles assumed by the framework for all nations to the inevitable first step in the major players, particularly seek sustainable, inclusive development of a system as we witness the current and peaceful societies. that can be accepted as U.S. administration taking “Leaving no one behind”, legitimate by all, that takes steps back in its historical however, will require a into account the interests of international stewardship global governance system states and their citizens, and and China stepping in to fill capable of supporting and that balances these with the the vacuum, positioning it facilitating dialogue and requirements of regional and front and center in today’s the development of a vision global stability and progress. global economic and that will allow us to meet political landscape. Reality the demands of a new This two-day Forum centered is thrusting the multilateral era. We must push for the on an open dialogue on system to transformation. appropriate implementation global governance and of these agreements. They China’s perspective in Times call for a profound must not lose steam. order to identify key issues reflection on the way to and best practices for a reshape the normative This is why this Imperial strengthened multilateral order behind today´s global Springs International system. World Leadership governance, unlocking the Forum held from the Alliance-Club de Madrid capacity of new and old 29-30 November, 2017 in (WLA-CdM) Members, expert institutions in a context of Guangdong, China, after the practitioners and scholars unstable and unpredictable 19th Party Congress, was so from around the globe complexity. Two major global timely and useful. In order to focused on an analysis agreements adopted at harness all the potential that of specific international the end of 2015 - the Paris China’s stronger presence in drivers that call for reform, Climate Agreement and international affairs brings, in order to analyze how to Agenda 2030 – have marked it is important to establish a unleash their full potential. a new, more inclusive dialogue to help identify how These were challenges in approach to addressing China can best contribute global governance, trade and vital, universal challenges. to that multilateral system finance and sustainability.
9 limited group of WLA-CdM As for the SDGs and Agenda 2030, the Members were honoured with WLA-CdM actively engaged with key UN Athe opportunity to share the endeavors and stakeholders during the conclusions with President Xi Jinping in drafting process and supportive of the Foreword Beijing in a face to face fruitful exchange. development of the inclusive strategy This was the first meeting held by President of “leaving no one behind” that was an Xi with an international organization essential aspect of SG Ban’s legacy. It is an following the 19th Party Congress, evidence honour for us to have SG Ban now with us of the relevance and traction the Imperial as a Member of the WLA-CdM. We are now Springs International Forum has gained in a working to support the implementation of few short years. Agenda 2030.
Since 2007, the WLA-CdM has been deeply It was an honour for the WLA-CdM to co- involved in strengthening international organize our second Imperial Springs governance. We have been active in the International Forum edition. I would like mobilization of the political will towards to thank our partners - the Australia China a global effective, efficient and equitable Friendship and Exchange Association, the post-2012 climate agreement. Already Chinese People’s Friendship with Foreign back in 2010, our Members decided to Countries Association, the Province of contribute to the debate on the reform of Guangdong, the City of Guangzhou and the the international governance architecture Ministry of Foreign Affairs of the People’s and to support the G20 presidencies in favor Republic of China - without whose support, of a long-term and sustainable approach, this Forum would not have been possible. focused on bringing about a more fitted, yielding and representative system, Last but not least, I wish to thank all experts capable of responding to the realities and and participants who contributed towards challenges of the 21st century. making the Imperial Springs International 10 2017 Imperial Springs International Forum · Final Report
A limited group of WLA-CdM Members were honoured with the opportunity to share the conclusions with President Xi Jinping in Beijing in a face to face fruitful exchange –
Forum a “must attend” event, bringing an international and Chinese perspective together in an open and constructive exchange on a variety of issues of global importance. We look forward to engaging in further editions to continue contributing to a strengthened global governance system capable of nurturing more peace, prosperity and sustainability for all.
It is with great pleasure that I share with you the warm message received from the U.N. Secretary General, World Leadership Alliance - Club de Madrid Member and friend, Antonio O. Guterres, on the occasion of this year’s edition of the Imperial Springs International Forum:
26 November 2017
“Dear Vaira,
I pay tribute to the outstanding contribution of the Club of Madrid and its members to the advancement of the global agenda of prevention of conflict, mutual understanding among peoples, good governance, climate action and all other dimensions of a fair globalization and multilateralism.
I wish the best success to your Policy Dialogue in Guangzhou and the Imperial Springs International Forum.
Warmest regards,
Antonio
( Antonio O. Guterres)”
This is yet another example of the recognition that the Imperial Springs International Forum continues to receive and, I hope, a prelude of things to come. 11 12 Foreword D prosperity, as well asanopen,inclusive, cleanandbeautiful world. a shared future for humanity would security, bringuslastingpeace,universal common and partnershipinsteadof confrontation andalliances.He believed that acommunity with well approaches asChinese on Presidentthe subject.Chinese Xi Jinping met with major business representatives to exchange as onglobalgovernance, views andsuggestions Countries (CPAFFC), Australia ChinaFriendship andExchange Association(ACFEA) and (ISIF), achievedagreat success.Focused on the “theGlobal GovernanceandChina’s With the joint efforts of People’sthe Chinese Association for Friendship with Foreign the World Leadership Alliance (WLA), the 2017Imperial Springs International Forum Perspective”, the Forum gathered former world leaders,renowned and scholars and justice win-win cooperation, abandonlaw of the jungle, promote dialogue international relations meant countries need to upholdmutualrespect, fairness uring the meeting with former world leaders, President anewXi said, type of Mada foreign delegates to 2017ISIF inBeijing onNovember 30th. for Friendship with Foreign Countries (CPAFFC) President of People’sthe Chinese Association m LiXiaolin 2017 Imperial Springs International Forum · Final Report
President Xi said as a country of over 1.3 billion people, Since the establishment of the “Imperial Springs China contributed to the building of a community International Forum”, this initiative has become an of shared future by maintaining its own long-term important tool in promoting mutual understanding and stability and development. China would always follow mutual trust, as well as a platform inviting all comments the peaceful development path and would never seek and views on common issues and interests of the worlds. hegemony like great powers did, adding that China’s In 2017, we focused on “Global Governance and China’s cooperation with other countries was never attached Perspective”, which invited most interesting and thought- with strings to interfere with their domestic affairs. provoking discussions. We talked about ways to improve China would take a more active posture in global global governance so as to meet current challenges and governance, including facilitating the political settlement how China could contribute more to today’s world. of international issues, participating in UN peacekeeping missions, implementing the Paris Agreement and the At the Forum, we received many inspiring comments 2030 Agenda for Sustainable Development. on China’s development as well as China’s ever growing role in the world. For instance, some foreign dignitaries Since the founding of the People’s Republic of China in believed China in the new era would bring more benefits 1949, especially since the reform and opening-up in 1978, to the world, as the country had shown in leadership in China has undergone great changes. It has become the global economy and promoting a multi-polar world. They second largest economy in the world and improved the applauded China’s efforts in making globalization more lives of more than 1.3 billion people, getting 700 million balanced and inclusive, its commitment to international people out of poverty. Xi explained the country’s task was partnership in addressing climate change and its to satisfy people’s increasing needs on many fronts and assistance to developing countries. Also, the Belt and China wanted to turn itself into a great modern socialist Road Initiative and the Asian Infrastructure Investment country that is prosperous, strong, democratic, culturally Bank proposed by China would offer more opportunities advanced, harmonious and beautiful by 2050. for other parties to work with China.
Last October, the Communist Party of China successfully Established in 1954, the CPAFFC is one of the earliest held the 19th National Congress. The Socialism with national people’s organizations of the PRC engaged in Chinese characteristics has entered a new era. The people-to-people diplomacy. With the aims of enhancing Conference focused on the people’s yearning for a better people’s friendship, furthering international cooperation, life, formulated the program of action and development safeguarding world peace and promoting common blueprint of socialism with Chinese characteristics in development, CPAFFC makes friends and deepens the new era, as well as established the decisive goal friendship in the international community and various of building a moderately prosperous society in all countries around the world. Apart from our work in respects. The 19th National Congress was a new historical developing sister-city relations, CPAFFC as a member milestone in the course of Chinese development. of United Cities and Local Governments, participates President Xi called on the people of all countries to work in international cooperation on behalf of Chinese together to build a community with a shared future local governments. Moreover, as a nongovernmental for humanity and build an open, inclusive, clean and organization with general consultative status at the U.N. beautiful world that enjoys lasting peace, universal Economic and Social Council, it takes an extensive part security and common prosperity. China’s development in U.N. Affairs. cannot be separated either from the reform and opening up or the cooperation and exchanges with other Here, again, on behalf of the CPAFFC, I would like to extend countries. The dream of the Chinese people is closely my sincere appreciation to our partners and all the connected with the dreams of the peoples of the world. participants for devoting your time, experience and ideas And we are ready to work with the people of all other for the Forum. We are looking for further collaboration countries to build a community with a shared future for with ACFEA and WLA to make good use of the ISIF, and humanity and create a bright tomorrow for all of us. promote world peace and development. 13 14 Foreword I honesty and yielded abundant andinfluential fruits. journalists attended the Forum. They communicated andexchanged with sincerity and the world. More than 200political,economic andacademicleaders, together with over 100 and China’s Perspective”, which echoed the current concernsand development trends of 2017 Imperial Springs International Forum was heldunder the theme “Global Governance Imperial Springs International Forum isaninnovativeplatform for globalandregional exchanges andcooperation. Initiated in2014, the Forum hasbeenheldannually in People’s Association for Friendship with Foreign Countries and World Leadership Alliance. Guangzhou co-hostedby Australia-China Friendship andExchange Chinese Association, n November 2017, the 4thSession of Imperial Springs International Forum was heldin Imperial Springs International Forum asanInternational Express to China. Dr Chau Chak W Guangdong Province, the frontier of reform andopeningupinChina. President of the Australia ChinaFriendship and Exchange Association and ing 2017 Imperial Springs International Forum · Final Report
On November 30, 2017, President Xi Jinping Living in a world met at the Great Hall of the People with Members of the World Leadership Alliance, featuring complexity who had attended the 2017 Imperial Springs International Forum. and diversity, we need to further our President Xi highlighted China’s development path, and its principles and mutual understanding perspectives on global governance, and listened to the speeches delivered by and respect, representatives of the distinguished foreign pursue harmonious guests. He expressed his appreciation to old and new friends in the World Leadership coexistence and seek Alliance for their efforts to boost exchanges and cooperation between China and the common grounds rest of the world. He said that hopefully while reserving minor the leaders coming from the 5 continents would continue to contribute their wisdom differences and offer their suggestions on further enhancing mutual understanding and – friendship among peoples. The meeting was reported by more than 1000 media globally, which had exerted tremendous and profound influence. According to preliminary statistics, information about the Forum had been read by more than 100 million people internationally.
As one of the co-hosts, organizers, and witnesses, I deeply felt that the 2017 Imperial Springs International Forum had been another great gathering for friendship and mutual understandings. Participants coming from different countries had established contacts with one another and enhanced their mutual understandings differences. Through friendly conversations and on the high-level open platform despite joint efforts, we can dispel misunderstanding their diversified cultural backgrounds and and settle disputes. experiences. They have also brought home happy memories about Guangzhou and I believe that with your support and efforts, Beijing. the Imperial Springs International Forum will become one of the most distinctive forums Living in a world featuring complexity across the globe and add even more luster and diversity, we need to further our to the fascinating landscape of the Imperial mutual understanding and respect, Springs. You are always welcome to the pursue harmonious coexistence and seek Imperial Springs, your international express to common grounds while reserving minor China! 15 16 Meeting With President Xi Jingping XI JINGPING PRESIDENT WITH MEETING 2017 Imperial Springs International Forum · Final Report
A group of WLA-CdM Members had the opportunity to share the conclusions of the 2017 edition of the Imperial Springs International Forum in a face-to-face and very fruitful exchange with His Excel- lency President Xi Jinping in Beijing. This was the first meeting between President Xi and a group of international leaders following the 19th Congress of the Communist Party of China, evidence of the relevance and traction the Imperial Springs International Forum has gained in a few short years. President Xi took this opportunity to thank the WLA-CdM Members for their insights and thought-pro- voking ideas and to outline his vision for China and global governance as outlined below.
hina is embarked on a path to development China, which is both a positive sign for China and a through socialism with Chinese significant contribution to the world. This socialism Ccharacteristics; this is the choice of the with Chinese characteristics has brought China people, the choice of history; China has tried other into a “new era”; in a spirit of win-win cooperation, systems – monarchy, parliamentary, presidential China wants to share the benefits of its growth – but all of them have failed. Only time and model with other countries. practice show the truth, and socialism with Chinese characteristics has proven to be the successful Nevertheless, the challenge of meeting material chosen path. needs of the people has historically been the main difficulty in Chinese society. This is now Over the past 4 decades, China has gradually being overcome, since most material needs have opened up, enjoying historical high levels of growth. been met as a result of fast, high levels of growth. As a result, the Chinese are leading a better life; 700 However, other needs like a good ecology must also million persons have been pulled out of poverty in be met. People of different strata have different
17 18 Meeting With President Xi Jingping its development path– Each country has the right to choose globalize, closing their doors.Not China. Some countries are beginning to de- and depth of more than 1500pendingreforms. high quality growth, increasing the dynamism time. Chinahas to shift from highspeed to areThe goals simplebutgreat at the same today besummarized as follows: the world), resulting from the 19thPC that can basis of China’s strategy (a promise solemn to ever-growing needs for abetter life. This is the inadequate development and the people’s evolved into onebetween unbalancedand principal contradiction society inChinese has entered anew era. The second, that the socialism characteristicswith Chinese has major politicalconclusions. The first is that The 19thNational Congress arrivedat two life for the entire population. Chinese Communist Party is the provision of ahappy the ultimateaspiration of the Chinese on achievingmaterialsatisfaction, but Beforehand,governmentalfocus wasthe needs and the government mustrespond. imbalance: havedifferentthe Chinese needs –andChinaisnow suffering from wearer knows whether the shoe fits or not.” not.” or fits shoe the whether knows wearer beautiful, democratic society. prosperous, culturally harmonious, By 2050,buildingChinainto astrong, socially andculturally. country –economically, politically, By 2035,makingChinaamodernized entire populationoutof poverty. of poverty per year: by 2020,having the increasing twofold; with 10millionout both aggregate andper capitaincome moderately prosperous society with foundation of the CPC,achievinga By 2020, the 100thanniversary of the “only the shoe shoe the “only interference in the affairs of others of affairs the in interference prosperity, this ispositive for all.Because If Chinacanmaintain long-term stability and allcansharerules so inprosperity. sovereignty, equality, rights, opportunities and to helppoorer countries, respecting with others. China feels ithasaresponsibility peopleand Chinese that itnow wants to share prosperity – the dream that hasunited confrontation. Peace, development, trade, partnership andcollaboration insteadof fairness, justice, cooperation and non- and cooperation justice, fairness, – is different? each leafinatree uniformity when possibly imagine China. How can we their doors.Not deglobalize, closing are beginningto Some countries of development, on based development. anew Chinaisseeking type are interdependent in their pursuitof The world isaglobal andcountries village while promoting exchange. peoples. Chinarespects cultural diversity No simplephilosophy canapply to all each leaf ina tree isdifferent?” can we possibly imagineuniformity when 2500 ethnic groups andreligions –“how uniformity; inChina there are more than it ispossible to achieveharmony without 5000 years of practice have shown us that and a shared future for mankind, respecting respecting mankind, for future shared a and shared prosperity prosperity shared . Dialogue, . Dialogue, 2017 Imperial Springs International Forum · Final Report
of the size of its population, global system, particularly for the suspension of US military instability in China could produce emerging markets. exercises. In the interest of instability in the world, even if only peace and stability, it is opposed with potential emigrants. As an emerging and still not only to the use of nuclear Chinese stability and the path developing country, China is weapons but also to the violent of peaceful development not yet fully engaged in all resolution of conflicts. contribute to global stability and multilateral discussions. It stands growth. China favors having a ready to support new institutions China has engaged and played an strong military apparatus but and platforms relating to the active role in conflict resolution in only to defend itself and to avoid oceans, the poles or the outer recent years – in, Afghanistan and humiliation; it does not seek to space, among many other issues. South Sudan – as well as in the expand or to impose. The B&R formulation of Agenda 2030. Initiative is the ultimate example At first, China did not have a proper of how China seeks to foster the understanding of climate change, China’s foreign policy is growth of its regional neighbors which is why it was not responsive focused on peace, stability and without imposing its conditions. enough in Copenhagen. China development for prosperity. It is evolved and is now a firm willing to work with all countries China also embraces proponent of cooperation to tackle although it does not expect to multilateralism: it is an climate change. agree with all of them. active advocate of the UN in international affairs. It upholds As with climate change, China’s President Xi thanked all leaders its authority. China does not position on another urgent matter and indicated his interest in further, seek to bypass the World Bank (the proliferation of nuclear similar meetings in different or the IMF but to complement weapons in DPRK) has remained cities of China, so the leaders it, to pursue reform through an committed – it supports the can engage with other persons incremental approach and work denuclearization of the Korean and gain a more comprehensive with others to achieve a fairer peninsula, a close neighbor, and understanding of China. 19 28-29 november 2017 program
20 2017 Imperial Springs International Forum · Final Report
Tuesday 28th November, 2017
INAUGURAL SESSIONS
Master of Ceremonies: Guangdong province - Vaira Vike-Freiberga, President of Xie Yuan, Vice President, Chinese - Li Xiaolin, President of the Chinese the WLA - Club de Madrid. President of People’s Association for Friendship with People’s Association for Friendship Latvia (1999-2007) Foreign Countries with Foreign Countries
09:30-10:15 - Zhou Zerong, President of the Keynote: Institutional welcoming: Australia-China Friendship and Donald Ramotar, President of Guyana - Li Xi, Party Secretary from Exchange Association (2011-2015)
Plenary 1
Changes in Global Environment Discussants: Center for China and Globalization and Global Governance - Ban Ki-moon, UN Secretary General (CCG). Counselor, China State Council. Master of Ceremonies: Yang Rui, (2006-2016). WLA-CdM Honorary - Zhu Feng, Director of Institute Anchor CCTV Member of International Relations, Nanjing
10.30-11.45 - Jenny Shipley, Prime Minister of New University Facilitator: He Yafei, Former Deputy Zealand (1997-1999). WLA-CdM Member Foreign Minister - Wang Huiyao, President and Founder,
21 22 Program 14.00-15.45 Breakout Se and Mechanisms of Global BREAKOUT Member2011). WLA-CdM. President of Kyrgyz Republic (2010- R Affairs (SIRPA) of International Relations andPublic Zheng Y - Directorate Terrorism Committee Executive Nations Security Council, Counter- - David Scharia,Director, United University International Relations, Sun Yat-sen - WeiZhijiang, Australian National University. and Disarmament, Crawford School, Centre for Nuclear Non-Proliferation - Discussants: WLA-CdM. of Slovenia (2007-2012). Member Facilitator: Danilo Governance Focus: inGlobal Challenges Governance. Discussion and Current State of Global BREAKOUT espondent: R R amesh Thakur, u, Professor at the School SE SE B – Institutions SSION B–Institutions oza Otunbayeva, Head of Schoolof SSION Directorof the ssions T ürk, President A – Origin –Origin
Member WLA-CdM. Minister of Romania (1989-1991). R Development Bank AdvisorPresidentof tothe the Asian - A Member. (1994-2002). WLA-CdMNetherlands Kok,- Wim Prime Minister of the (CCIEE) International Economic Exchanges Chief Economist of ChinaCenter for Globalization (CCG) andDeputy Fellow of the Center for Chinaand - XuHongcai, Non-Resident Senior WLA-CdM Columbia University. Advisor of the of absence for publicservice) from of Colombia andProfessor (on leave Director of the Bank of the Republic Ocampo, Co- José Antonio- Institute atFudan University Zhang Weiwei,- Director of the China Discussants: Committee Director, Reinventing Bretton Woods Facilitator: Marc Uzan, Executive Governance R Focus: Governance Discussion espondent: Petre R Financialesetting andE yumi Konishi,yumi Special Senior Prime oman, Prime conomic conomic - Y Ibero-American Secretariat (SEGIB) - R International Relations China Institutes of Contemporary World Economic Studies in the - ChenFengying, Researcher of (2000-2006),Member WLA-CdM - R Korea (2008-2009). WLA-CdM Member - Han, Prime Minister Seung-soo of Governor General of Australia - MichaelPhilip Jeffery, Former Discussants: Facilitator: Y 5P’s meet. A Sustainable Development and focus: Discussion Perspective. Governance andChina’s BREAKOUT Member WLA-CdM. President of Colombia (1998-2002). R International Studies, Jinan University - Zhang Zhenjiang, Dean of School of Public Diplomacy (CPDA)Association of Research Department of China Foreign Affairs University andDirector genda 2030: genda Where the 4I’s and ndrés Pastrana,espondent: Andrés ao Y Headebeca Grynspan, of the icardo L ao, Associate Professor,Associate China SE Presidentagos, of Chile ang C – Global SSION C–Global R , Anchor CCTVui, Anchor 2017 Imperial Springs International Forum · Final Report
Wednesday 29th November, 2017
KEYNOTES
Master of Ceremonies: Yang Rui, Anchor CCTV
Keynote Speeches:
09.30-10.00 - Wang Chen, Member of China’s Politburo - Xie Yuan, Vice President CPAFFC - Zhou Zerong, President of the Australia-China Friendship and Exchange Association - Yukio Hatoyama, Prime Minister of Japan (2009-2010) - Romano Prodi, President of The European Commission (1999-2004) and Prime Minister of Italy (1996-1998 and 2006-2008). Member WLA-CdM
Plenary 2
Reforming Global Governance Discussants: Chinese Embassy in the United States. Path and Objective. Discussion -Luis Alberto Porto Rizzo, Senior -Cassam Uteem. Vice-President WLA- Focus: Drivers, Shapers and Advisor for Strategy and Organizational CdM. President of Mauritius (1992-2002) Leadership for a New, Effective Development, Organization of American - Alexander Likhotal, Former President
10.15-11.30 States (OAS). of Green Cross International. WLA-CdM Global Order: -He Ning, Former Director-General of Advisor. Facilitator: Sean Cleary, the Department of North American and Respondent: Executive Vice-Chair of the FutureWorld Oceanian Affairs, Ministry of Foreign Wolfgang Schüssel, Chancellor of Foundation and Chairman of Strategic Affairs, Former Commercial Minister of Austria (2000-2007). Member WLA-CdM Concepts
Conclusions
China’s Engagement in Global Governance Reform
Facilitator: Yang Jiemian, Member, the Foreign Policy Advisory Group of the Ministry of Foreign Affairs of China (FPAG), President Emeritus, Shanghai Institutes for International Studies 11.30–12.00 Keynote: George Papandreou, Prime Minister of Greece (2009-2011). Member WLA-CdM
Discussants: - Zhou Zerong, President of the Australia-China Friendship and Exchange Association - Vaira Vike-Freiberga, President of the WLA-CdM. President of Latvia (1999-2007)
23 List of Participants
WLA-CdM Kok, Wim Obasanjo, Pastrana, Andrés Members Prime Minister of Olusegun President of – the Netherlands President of Colombia (1998- (1994-2002) Nigeria (1976- 2002) Ban, Ki-moon 1979; 1999-2007) UN Secretary Prodi, Romano Lagos, Ricardo General (2006-2016) Ochirbat, President of President of Chile Punsalmaagiin Council of Birkavs, Valdis (2000-2006) President of Ministers of Italy Prime Minister of Mongolia (1990- (1996-1998; 2006- Latvia (1993-1994) Lagumdzija, 1997) 2008) Calderón, Felipe Zlatko Otunbayeva, Roza Roman, Petre President of Mexico Prime Minister President of Prime Minister of (2006-2012) of Bosnia & Herzegovina Kyrgyz Republic Romania (1989- Han Seung-Soo (2001-2002) (2010-2011) 1991) Prime Minister of Korea (2008-2009) Papandreou, Schüssel, Meidani, Rexhep George Wolfgang Jebali, Hamadi President of Prime Minister of Chancellor of Prime Minister of Albania (1997- Greece (2009- Austria (2000- Tunisia (2011-2013) 2002) 2011) 2007)
24 2017 Imperial Springs International Forum · Final Report
Shipley, Jennifer Mary Grynspan, Rebecca Porto Rizzo, Luis A. Prime Minister of New Zealand Head of the Ibero-American Senior Advisor for Strategy and (1997-1999) Secretariat (SEGIB) Organizational Development, Organization of American States Turk, Danilo Higueras, Georgina President of Slovenia (2007-2012) Freelance Journalist, Asian Prato, Stefano Affaires analyst Managing Director, Society for Uteem, Cassam International Development (SID) Vice-president of the WLA-CdM. J. Enright, Michael President of Mauritius (1992- Director of Enright, Scott & Scharia, David 2002) Associates consultancy, Director, United Nations Professor at the University of Security Council, Counter- Vike-Freiberga, Vaira Hong Kong Terrorism Committee Executive President of the WLA-CdM. Directorate Kelimbetov, Kairat President of Latvia (1999-2007) Governor of Astana International Thakur, Ramesh Agüero, María Elena Financial Centre Director of the Centre for Secretary General Nuclear Non-Proliferation and King, Niamh Disarmament, Crawford School, Vice President for Programs Australian National University Other participants & Strategic Content, Chicago – Global Council of Foreign Affairs Uzan, Marc Executive Director and founder Konishi, Ayumi Aktanov, Daniyar of Reinventing Bretton Woods Senior Advisor to the President Senior Manager of Astana Committee International Financial Centre of the Asian Development Bank
Likhotal, Alexander WLA-CDM staff Awad, Ibrahim Former President of Green – Associate Professor at the Cross International. WLA-CdM Faculty of Economics and Briano, Agustina Advisor Business at Al-Quds University Outreach and Development Moreno, Pedro Manuel Senior Officer Bahadur, Chandrika Chief of Staff, Ibero-American Campos, Rubén President, SDSN Association Secretary-General Programs Coordinator Nematov, Aisultan Bueno, Rafael Gómez del Valle, Álvaro Advisor to Governor of Astana Director of the Departments Former Research Assistant International Financial Centre of Politics & Society and Hidalgo, Ricardo Education, Casa Asia Ocampo, José Antonio Chief Financial Officer Co-Director of the Bank of Cleary, Sean the Republic of Colombia and Migliari, Mariana Executive Vice-Chair of the Professor (on leave of absence Institutional Relations and FutureWorld Foundation and for public service) from Columbia Internal Governance Officer Chairman of Strategic Concepts University. WLA-CdM Advisor Pérez Gil, Luis Communications Officer Dossymbekov, B. Piccone, Ted Senior Manager of Astana Senior Fellow, Foreign Policy, Romero, María International Financial Centre Brookings. WLA-CdM Advisor Events Manager
25 KEYNOTE SPEECHES
26 Donald Ramotar President of Guyana (2011-2015)
Wang Chen Member of China’s Politburo
Xie Yuan Vice-President, CPAFFC (Chinese People’s Association for Friendship with Foreign Countries)
Zhou Zerong President of Australia-China Friendship and Exchange Association
Yukio Hatoyama Prime Minister of Japan (2009-2010)
Romano Prodi President of the Council of Ministers of Italy (1996-1998), Member WLA-CdM
George Papandreou Prime Minister of Greece (2009-2011), Member WLA-CdM
27 28 Keynote Speeches organizers. It gives me great pleasure to be here in the province this important forum. Allow me first of all to congratulate the Thank you very much for your kindinvitation to participate in of Guangzhou to discuss the issueof and globalgovernance Ram President of Guyana D China´s perspective. (2011-2015) onal ot ar d
2017 Imperial Springs International Forum · Final Report
his topic is pertinent and timely due to the rapidly changing development in and Today there is greater Tout of China. It will allow us to analyze the interconnectivity challenges proposed in the rapidly changing world. One of the most important of those is the benefit between and among of global prosperity to all the peoples of the world. Global governance is an important topic in every countries than ever institution and body that requires international collaboration. Modernly, global governance has its before. What happens roots in 1945, when the 2nd World War ended and in one country has a the world leaders moved to establish international institutions. At that time, conditions were very fast and direct impact different in our world. The majority of the population was still living in colonies and semi colonies on others and they were not seen as being relevant to the global decision making. The dominant powers – were the United States, the United Kingdom and France. And while the then Soviet Union played an important role, it was in a minority. It was therefore has more wealth than the rest of the planet: its inevitable that those countries really became the richest men own the same amount of wealth as the most powerful in the global bodies that were in poorest half of our world´s population. While much the making, the most important being the United is made about aid towards developing countries, Nations. In fact, it was because of the work of the financial flows from the developing to the developed United Nations that the world population was spared countries dramatically exceed the flows in the another global conflagration, this is no mean opposite direction, contrary to expectations. Indeed, achievement. Importantly too, the UN quite early one recently published study reported that the passed the resolution for the decolonization of the financial flows from the developing countries to the world which resulted in the majority of the world´s developed world totaled 2 trillion US dollars. More peoples living in Nation States. Emerging at that than the financial flows in the opposite direction, time too were important economic, financial and and that the accumulative amount of this net flow global institutions like the IMF and the World Bank from 1980 to 2012 is a staggering 16.3 trillion United which played and continue to play a central role States dollars. This is an unfortunate and dangerous in international economic and financial relations. situation. However, these bodies did not bring the expected prosperity that the majority of the world´s people All of the above was the result of the fact that the anticipated. management of the international economic and financial institutions continued to be dominated by It is true that absolute poverty has been reduced in a few countries whose national interest tramps all. our world. This is indeed an important achievement. Today there is greater interconnectivity between and However, it is not evenly distributed. The main reason among countries than ever before. What happens in has been the successes of the governments like one country has a fast and direct impact on others. the People´s Republic of China, taking millions out Let us recall the East Asian crisis in 1997: while it of poverty. Why is this a significant achievement? occurred many continents away, it had a negative It hides the fact that the relative poverty is probably impact on the Guianese economy. More recently, worse now than ever before. The inequality between we saw the global reach of the 2007 financial crisis countries has grown much wider. According to in the United States. This has had a massive impact OXFAM, the richest 1 percent of the world´s people in the world including some of the Caribbean 29 30 Keynote Speeches prosperity to a large part of the world as globalizationBecause did not bring guardians of democracy around the world. countries that actasself-appointed and boardswhose are dominatedby champions andadvocatesof democracy, the behalf of institutions that profess to be this affront to democracy isperpetuated on elected representatives of the people. And decision-making authority of legitimally burocrats who usurp the policy makingand elected representatives, butby international policies crafted not by the democratically undermined by the impositionof neoliberal sovereignty eroded and their democracy countries around the world haveseen their world. basis,smallpoor On anongoing what is taking placein the developing happened inEurope: then you canimagine of democracy. How ironic is this! This has Greek peoplelecture about the importance forces ignoredsame of the that the will the result of enormouspoliticalpressure. Yet Such apoliticaldriftmusthavebeen the the government didnot accept the dictate. austerity measures of the EUand the IMF, but is oneexample. The Greek peoplerejected the will of the people. ofThe case Greece than the developing world, often ignores has stronger economiesandinstitutions Moreover,that episode. evenEurope which states. Our region isstillrecovering from nationalisms and fueling movements another example. Moreover, this isbreeding United Kingdom from the European Union is to Europe as well. The withdrawal of the is not confined to the United States but inward-lookingThe tendencybecome to floods andlandslidesgreat loss of lives. the newsof the devastating Typhoon causing islands. Here in Asia, we havebeen following populations had to beevacuated from some disruption. cases, and social In some total Caribbean region causing great economic ripped throughstrength the enormous Only two months ago two hurricanesof of environmental refugees in the Pacific. most vulnerable. Already we see the margins island statesatlow line coastalareas are ineverydisasters partof the world. Small world´s climate, which iscausingmore engendered asignificant in change the into globalproblem ahuge that ithas environmental issueshavealready grown wrong that itborders ridiculousness. The dispositions of the Treaty. obviously Itisso United States would by bedisadvantaged the environment. One of itsarguments is that the improve the emissions to world´s carbon from the Paris Agreement onreducing it was withdrawingthat indicated has more international. For instance, the US inwards ata time when we need to be tendency andgrowing sentiment to look promised, we find now a very troubling 2017 Imperial Springs International Forum · Final Report
Because globalization did not bring prosperity to a large part of the world as promised, we find now a very troubling tendency and growing sentiment to look inwards at a time when we need to be more international –
towards isolationism. The problems are in Spain, measures lead to resentment and retaliation, Greece and even France, where the growth of and it releases a vicious cycle of political the extreme right parties have been a feature instability and wars. Political and economic of the last election. Clearly in the conditions of sanctions are rapidly replacing dialogue and rapid globalization, it is a dangerous folly to just diplomacy in the search of solutions. Despite the think in the category of self-interest as a pause huge problems that I have tried to give a glimpse to collective global interest. In these times, the of, despite the obvious difficulties that lie ahead importance of global governance cannot be over of us, of our just and peaceful solution, all is not emphasized. The solution to these problems calls lost. New positive forces have also emerged that for cooperation and joint efforts to the whole give hope that a better world is possible. international community. Now more than ever, we need a new approach to global governance. Since 1978, when China opened itself to Policy makers in the international financial the world, the economic growth has been institutions must look at a much broader interest. phenomenal and this province here is an example of that. Today it is the second largest Ladies and gentlemen, the inequality and economy in our world. What is very different disadvantaged positions of the developing world about China´s growth that we have seen is has led to a continuity of poverty and other great that it is not being used as an instrument to social ills. The power exercised by a handful of subjugate other countries. It has not been countries in global institutions has embedded used as an oppressive force. It has never had them to push for regime change often in colonies. Indeed, it has always been opposed disregard of the masses support. This has led to colonialism and imperialism. It has always to severe crisis in several countries, including resisted domination. That is the approach that devastating wars that have created the refugee has guided its policies in the international crisis in Europe. The result of all of this has relations. We have seen it pursuing partnerships contributed to the growth of extremism in our instead of alliances. China knows that the best world. Extremism is not only confined to non- way to continue its tremendous growth is to government actors. Some governments are not assist other countries to also progress and only looking inwards but are tending to resolve its to leave them to live their own development. problems by extreme measures. The expulsion In pursuing this, it has built partnerships with of almost one million persons from Myanmar countries and peoples across continents. In is clearly an act of extremism by that regime. our multipolar world, it has worked with the Our collective experience has shown that such international community to promote alternative 31 32 Keynote Speeches BRIC countries haveincreased their portion cooperation isdemonstrating its vitality: the of developing nations. This new modelof facilitate the growth and the development Not just the memberto serve statesbut to establishment of anew development bank. Here we cansee that ithasprogressed to the a partnershipininternational economics. to work for acommonprosperity. Itisnow and for once, we attempt haveagenuine partnership hasshown that allcan win, BRICS countries. Over the lastdecade, this People´s Republic has forged is that of the exampleofmany partnerships thatthe the both within andbetween countries. An which hasled to the polarization of wealth a real alternative to the neoliberal model paths to progress. This approach isoffering aspect of life. Ithas taken up the challenge the world’s people. Itgoes to every important not confined to the economic wellbeing of over emphasized. But China’s contribution is nations andpeopleoutof poverty cannot be people closer together. Its potential for lifting whole world. Itisaninitiative that will bring just for the countries participating,but for the increase andimprove transportation, not everthe biggest undertaken, will dramatically its Belt andRoad initiative. This Project, oneof transformation in terms of infrastructure in experiencingChina isalso another massive world´s economicgrowth isnow above50%. BRICS countries’These contribution to the from 11% to 16%and30%of world´s trade. %. Itsaggregate trade volume hasgrown of the world’s economy from 12% to 23 2017 Imperial Springs International Forum · Final Report
of promoting environmental protection and Secondly, the arms trade is one of the biggest to stop and reverse the debilitating impact of businesses in the world despite the fact climate change. Today it is greening deserts that the Cold War has ended: it continues and it has taken the leading role promoting to flourish. That business has taken a lot of the use of alternative energies. It has now put resources away from civilian production ecological development and protection as a and from investment in the social sector, key pillar to its socioeconomic development including education and health. A relatively program. This, as I have noted is at a time high international tax should be considered when we see many important countries to be put in the arms’ trade. Such a tax seeking to withdraw from the international should also apply to the transport of arms. process. The cooperation that has blossomed This is one way of putting back resources between China and our region, Latin America for development instead of for destruction and the Caribbean is already bringing while discouraging the production of more benefits to our people. The investment in our destructive weapons. At the political level, we region in its structure offers great hope that should review the efforts towards nuclear our life-long dream of ending poverty can disarmament. More and more countries are become a reality. President Xi Jinping has trying to acquire such weapons which we once more demonstrated the commitment all are seeing, are for defensive purposes. to partner with us in a more tangible way, it However, this has created a very dangerous has committed to the region’s development situation and a real threat of nuclear and Guyana is benefiting from China’s destruction. I believe that we should push assistance in many ways. China is well for total disarmament, I still believe that aware that the progress depends on peace. it is good working towards this. However, Moreover, it has no private military industrial the immediate priority should be given to complex which benefits from war. banning nuclear weapons.
I would therefore like to propose some In conclusion, I hold a strong view that initiatives that can be pursued to assist in there is a need for the rebalancing of the development of our world. Some of these decision making in international, political ideas have been around in various reports and economic relief matters. To put this and proposals. The Brandt Commission report debate into perspective, let me say that which was produced in the 1980s contains China is home to approximately 20% of the some interesting initiatives. So too was the global population, it accounts for 15% of the proposal of Guyana’s President Cheddi Jagan global economy and it contributes more for a new global human order. Both of these than 25% to global growth. Yet in the major were adopted by the United Nations. international financial institutions of the world, China holds between 5 and 7% of Today I will propose a few ideas that should the voting shares. This means a significant be examined and, if found viable, they quota reform that has to be fought for. should be vigorously lobbied for at the This alone illustrates the imbalances in international economic level. I believe that global governance, a challenge that can the time has come where no one’s country’s undermine the legitimacy of some of the currency should be the global currency. major global institutions in the face of a I am of the view that we can undergo a changing world. Clearly China´s contribution democratization of international economic to the world´s development both in relations if we can develop a distinct economic and the fight for peace has owned currency for international trade. a greater role in global governance. 33 34 Keynote Speeches Jinping’s thoughts onsocialism characteristicswith Chinese in the new era with abroad world view andprofound human feelings, contributing The Chinese CommunistThe Chinese Party’s 19thNational Congress established Xi China’s wisdom to ofthe cause world peaceanddevelopment. Member of China’s Politburo Wan g C hen 20172017 Imperial Imperial Springs Springs International International Forum Forum · · Final Final Report Report
his major political message answers the contradiction between the growing needs At present, the T of a better life, and growing inequality. reform of the global The congress presented the road map of the great rejuvenation of the Chinese nation. governance system is
The general goal of China’s diplomacy in the new era at a historical turning is to promote the construction of new international relations, abandoning the “jungle law” and focusing point on the human destiny, community building lasting – peace, universal security and common prosperity.
Since the 18th CPC National Congress, the CPC Central UN Charter as the core and actively safeguard the Committee with Comrade Xi Jinping at its core has open world economic system, a clear-cut stand and been making efforts to explore ways to improve oppose trade and investment protectionism. global governance, taking the lead in developing countries, promoting solutions to international China will promote the reform of the unfair and regional issues and providing the world with a and unreasonable arrangements in the global Chinese perspective. President Xi Jinping’s “Belt and governance system, particularly in the international Road Initiative” and the construction of a community economic and financial organizations such as the of human destinies has been repeatedly included International Monetary Fund and the World Bank, into relevant UN documents. The “Belt and Road promoting its democratization to make the world a Initiative” has opened a new mode of international more balanced governance system reflecting the cooperation, providing a new platform for global wishes and interests of most countries. governance and became the most popular international public product in the world’s largest China will promote the establishment of new international cooperation platform. At present, the mechanisms and new rules in the field of reform of the global governance system is at a international economics and financial cooperation, historical turning point. strengthen international response to energy security, food security, information security, coping with General Secretary, Xi Jinping, emphasized in the 19th climate change, fighting terrorism and preventing NPC report that the Chinese people’s dreams are major global challenges such as catastrophic closely related with the dreams of other peoples and diseases. cannot be separated from a peaceful international environment and a stable international order. Ladies and Gentlemen, we are all on the “mission” China will always be the builder of world peace, a of reforming the Global Governance System in contributor to global development and a defender of accordance with the principle of “building business, the international order. China will uphold the global building together and sharing.” I firmly believe governance concept of “building economically, that under the guidance of Xi Jinping’s socialist building physically and sharing with the public”, ideology with Chinese characteristics in a new era advocate the democratization of international and with the strong leadership of the party Central relations and adhere to the principle of equality, Committee with Comrade Xi Jinping as the core, strength, weakness and wealth among all countries China will participate more actively in the global in the world, and support the expansion of the governance system, reform and construct in order representation and voice of developing countries to make greater contributions to safeguarding the in international affairs. China will unswervingly world peace, promoting common development and uphold the international order and principles of the creating a beautiful future for mankind. 35 36 Keynote Speeches I Chinese People’sChinese Association for Friendship responsibility of globalgovernance. The historical courageChina’s totakeshows the the framework of the new era, butalso underparticipate inglobalgovernance Party and government the Chinese to determination of Communistthe Chinese humanity not only demonstrates the firm The proposal of acommunity of oftrend thetimes. followpeople to ofdesire Chinese the the traditional history andculture butalso the reflects not only ofthe genes Chinese The concept of acommunity of humanity promote the buildingof humandestiny. of anew type of international relations and in the new era is to promote the building that the general of goal China’s diplomacy 18th CPCNational Congress, they pointed out issues of the future of mankind.Since the exploregovernment to fundamental the Communist Party and the Chinese Chen shared the efforts of the Chinese n hisspeech, Vice Chairman Wang again again to thank allour guests for attendingISIF 2017. Another special thanks to Vice Chairman Wang Chenrepresenting the Chinese government at the Chinese the 2017International Forum. First, please allowFirst, please me,onbehalf of People’sthe Chinese Friendship with Foreign Countries) Association Association for Friendship with Foreign Countries, once (Chinese People’s(Chinesefor Association Vice-President, CPAFFC Xi e Yuan extensively andactively participatein with Foreign Countries will, asalways, China People’s Association for Friendship channels. In the context of the new era, in international organizations and other local and foreign governments, participating example, pragmatically cooperating with and Chinese foreigners. We leadby conducting friendship exchanges between the unity andprogress of mankindby ofcause andpromoting global governance, committed to actively participatingin the Foreign Countries, Chinahasalways been of People’sthe Chinese Association for For more than 60 years since the founding category of international governance. belong tothe development common safeguarding world peaceandpromoting development.”common them, Among safeguarding world peaceandpromoting promoting international cooperation, aims at“enhancing people’s friendship, establishment of ChinaDiplomatic groups with Foreign Countries as the earliestprivate
2017 Imperial Springs International Forum · Final Report
bilateral and multilateral exchange activities and The proposal of a community of start to build, bit by bit, a humanity not only demonstrates foundation for the friendship of peoples. the firm determination of the
As the co-organizer of the Chinese Communist Party and forum, we sincerely thank all the distinguished guests the Chinese government to for their insights during the participate in global governance, two-day forum discussion. Let us work together to but also shows China’s courage to promote the progress of the global governance take the historical responsibility system and usher in a better tomorrow for the community of global governance of human destiny. – 37 38 Keynote Speeches T year we conducted in- cooperation. This global to promote regional and and cultural asfields so in political,economic onhotdiscussions topics ofparties through the amongallconsensus understanding and aims to promote mutual in civildiplomacy. It international exchanges in order to promote platform forChina very important Forum isa his International Friendship andExchange Association time, I also extendtime, Ialso my greetings to allpeople from all walks I would like to express my warm thanks to all the leaders who havelongbeenconcernedaboutandsupported the development of internationalthese forums. At the same of life who havelongdevoted themselves to promoting exchanges between Chinaand the rest of the world. Presidentof Australia-China Z Jinping mentioned in President Chinese Xi of globalgovernance. vision andproposition and to understandChina’s current globalgovernance facingopportunities the andthe challenges that allow us to analyze and creative speeches there are constructive Ladies andgentlemen, China’s position. of and globalgovernance exchangeson thetheme depth and discussions g eron Z u ho throughout the world. development andefforts realization of sustainable and global governance the and the world,ofChina the reform andconstruction play arole inpromoting the continuetoforums will international times. All are still the themes of all Peace anddevelopment readjustments. major andmajor changes of great development, the world isinaperiod the 19CPCreport that 2017 Imperial Springs International Forum · Final Report Yukio Hatoyama Prime Minister of Japan (2009-2010)
True peace will never be achieved through military force. The Belt and Road Initiative –through the Asian Infrastructure Investment Bank (AIIB)- will emerge as a solid model of regionalism incorporating the East Asian community plan in its final objective. Japan has yet to become part of this strategy.
The election of President Donald Trump was a Today the single greatest challenge is how to deal with result of the dissatisfaction with politics among the aggressive nuclear missile development program the American people, a characteristic of our of North Korea. In my view, Korea is developing nuclear polarized world. missiles as a call for use in negotiating a peace treaty with the US. s more nations turn to nationalism and populism, like Brexit, Russia and Japan, It is critical therefore for China, Japan and South Korea China’s president Xi Jinping oddly declared to join hands in the effort to bring Washington and A Pyongyang to the negotiating table. Furthermore, it plans to push on with reforms and open-door policies for his nation, particularly through the Belt and Road is essential for nuclear powers to enter into treaties initiative. I believe that regionalism defines a healthy declaring that no nuclear attacks will be launched collaboration between neighboring nations, as we can against nations without nuclear capabilities. see in the Belt and Road project, with the concept of heightening regional linkage through infrastructure Only now the single most pressing challenge for the building in the European and Russian continent. planet today is the issue of climate change. At a time in history when the US government has opted to turn its I have long advocated for an East Asian community back on the global environmental crisis, China appears plan, for regional structured cooperation of the three ready to master the full capacity of its governmental players, China, South Korea and Japan combined with leadership and resources in addressing the issues other neighbours functioning as a system, with the faced by the planet. In promoting the Belt and Road ultimate objective of building up a community linked initiative as well, maximum emphasis is being placed by common fate. on realizing Green infrastructures. 39 40 Keynote Speeches dispersed. dispersed. to developingcountries inorder to have them employ anenvironmental policy hasbeen 2. 1. President of the Council of Ministersof Italy countries in favor of developingcountries. There isnohint of progress in ofrise development with adifference between developinganddeveloped Poverty isslowly but feebly decreasing and we haveasubstantial, unexpected are increasing, and the help that was agreed at the COP20 inCopenhagen in2009 Agreement over itsgeneral support.Nevertheless, back,emissions UShas gone implementation of the agreements we take. Progress hasbeenmadeat the Paris The first question for astrong, efficient globalpolicy ishow we can trust the Roma (1996-1998), Member(1996-1998), WLA-CdM environment and fighting poverty andinequality. Two major of challenges are globalgovernance no P rodi 2017 Imperial Springs International Forum · Final Report
decrease of inequality. The fight against inequality includes many fields for a Trust in governments necessary international cooperation. is the first condition
There has been some progress for making progress in in exchange of data but no major agreement in fighting the fiscal global governance 3. paradise. In the initial fight against poverty, progress has been very modest – despite the declaration of many countries that this is a priority. Trust in governments is the first condition for making progress in global governance. Iraqi or in the Libyan War has shown that interdependence is coexisting with We need to enhance the strength different political models of different of the United Nations and all the countries, and this was also the basic supervision bodies in order to give message of the Chinese President Xi in 4. a doctrine and to build a structure the last 19th congress of the Communist to control the real results of the policies Party. The Silk Road and the Infrastructure in the fields in which we have signed an Bank is a proposal for economic agreement. We don’t have a clear authority interaction of different political models to judge the fulfillment of agreements. among the participants.
Trade is strongly increasing Even though this proposal of despite of the challenges posed interactive global policies 5. by the American president, based on economic common advocating for limits in trade 7. interest is not easy to put in and killing the Pacific Treaty. The era of action as the Silk Road project involves comprehensive trade agreement, is in so many countries, it has been very well my opinion definitely dead, given the fact received. The AIIB has been immediately that the internal political structure of all accepted by all European countries, the countries is much more complex and UK included. One of the first cases of a interest groups are much more diversified. difference between UK policy and the American policy was its support for the We must work in the field of trade towards global AIIB and the reform of the economic efficiency with bilateral agreements, sector by sector global governance. agreements, country by country. Economic interests are now so strictly linked together that we are really The European Union needs interdependent. And when you are interdependent it an open policy vis à vis China, is easier to have a global policy. I do think that trade through the Silk Road and between UK and Europe will not be damaged. 8. the new bank proposals, as well as the 16+1 Chinese and European In politics there is less a desire to proposal, given the fact that this intervene in the internal political Chinese policy is of utmost importance problems of all other countries. for the future of the world and must be 6. Probably the real failure of the mastered with delicate hands. It is in purpose of exporting democracy in the the right direction. 41 42 Keynote Speeches C is the first question. first is the are we rather going than how we get there, think aboutstrategy before structure. Where structures of globalgovernance. We need to We doneed to see in the change the terrorism or extreme demagogy. protectionism, unilateralism, isolationism, parts of the world abacklash. We it, see havecreated challenges these inmany artificial intelligence, robotics. Much of change, the revolution of digital technology, movementshuge of population, the climate contractthe social in the developed world, of money, corruption, the breakdown of and problems. Tax havens,concentration challenges huge opportunities butalso this globalized world. It hascreated new We are anew seeing balanceof power in Geor having to lead in turbulent times. lead having to of which road it will take but itis hina isnot simply facing the choice Prime Minister of Greece (2009-2011), g Member WLA-CdM e Pa pa unifying theme and this isclimate change. Because we may find that there will bea Athens it because was agrowing power. Thucydides trap, when Sparta attacked may allow usalso to avoid the so-called change which might in the enduniteus. This our own self destruction,itisjustclimate maybe itisnot the aliens this time, itis countries unitingagainst the aliens… well, the earthand we all see the different fiction movies with alienscoming to invade As amatter of fact, we all see science these may be the mostimportant. and the climatechange the Paris Agreement talked about,andIbelieve that the issueof strategy, and this is what Chinaof has course shared homeif you like shouldbe the basic the word Eco, which means home.Soour in Greek the world Ecology comes from about shared destiny andshared futures; outlined isquiteanimpressive one.He talks The strategy that President Xi Jinping has u ndreo 2017 Imperial Springs International Forum · Final Report
So, the SDGs should be a unifying guiding compass and this should also enlighten the structures we create to The SDGs should be see how they will reflect both the changes in power but a unifying guiding also where we want to go as a planet, as humanity. compass and this should Now, every leader wants to put his or her country first, those are the interests. But I think that is not the essence also enlighten the of the contradiction here, of the problem. The question is whether we see the interest of our country as linked structures we create to to the interest of others in the region and in the global see how they will reflect world. That is the question. And unluckily the way the US is looking at it today is not right. What we are seeing is a sort both the changes in of narrow-minded transactional nationalism instead of the multilateral cooperation that is needed. And this is not power but also where we only the US, but also many other countries. want to go as a planet, as In China, there is a strategy and that is to integrate humanity the national interest with the regional interest and the global interest. The Belt and Road Project, for example, – is not an imposition of Chinese nation´s interests, but rather a partnership of converging interests and as tax havens and concentration of wealth, we need a cultures. However, this is not easy and we already know dialogue with scientists and civil society, so we need to that small conflicts in the region can result into major put inclusiveness forward: putting humans at the core conflicts. Look at Syria, which was a small conflict of global governance, not States. initially, became a proxy war in the region and also from global powers. We do not simply have to distribute the wealth, but also to make our citizens in our societies, our nations, China may have the power not to need reconciliation responsible in order to be able to adapt and be part and yet it may have the wisdom to seek reconciliation. of dealing with major challenges and changes and With the rise of nationalisms around the world, no one disruptions we are seeing in front of us. That is the only would be unaffected. So, nationalism on the one hand, way we´ll be able to deal with these issues, and that is and this of course China too, on the one hand it could by bringing our citizens to participate and not being be pride of what you are and what you contribute to marginalized in our society. the world, what you are doing and driving for moving your country forward, or it can be a destructive force to One lesson is that we need to engage. Moving away polarize and create conflict. from globalization, moving away from cooperation, is not the solution. We may have divergent models of governance. There are lots of discussions around democracy, Power needs to be used carefully. The abuse of power the role of government. The word inclusiveness has was an anathema punished by the Gods in Ancient a basic principle for global, regional and domestic Greece. The real issue today is not if we have the power governance. More justice to globalization is one of the -we have the power as humanity-, but rather how we things President Xi has talked about. This will include, use the power, and this a deeply political and moral for example, types of investment that do not create issue, from technology to the military might. It is a dependencies but empowers societies, countries or challenge in any governance, whether it is local or SMEs. Everyone should be respected in the global world global: how we use the power, how we use it wisely for and have a voice. We have to deal with injustices such the common good, for justice and for peace. 43 WORKING PAPERS
44 Shaping and Reshaping Global Governance: Navigating the Thucydides and Kindleberger Traps
Peace and Security in Global Governance
Resetting Financial, Fiscal and Economic Governance
Climate, Leadership and Sustainability
Reflections on a New World Order
45 46 Working Papers T the domestic to the international level,raising anumber of pressing normativechallenges in people’s lives.Several publicpolicy decisionsandpractices have been transferred from Consequently, international play organisations anincreasingly important andintrusive role collaboratively to reduce costsandbringorder andregularity to international relations. state actors– to deal with commonproblems andchallenges when arethese bestmanaged multilateralism: collective,cooperative actionby inconcert states–sometimes with non- we liveinashared world and face ashared destiny’. This provides the key rationale for congress, President Xi Jinping affirmed that ‘No country canretreat to their own island, maintain prosperity through unilateral action.In hisaddress to the quinquennialparty states face mutual vulnerabilities; even the mostpowerful cannot achievesecurity or interstate military conflicts andare driversof also humaninsecurity. In sucha world, all food supply and water tables, fish stocks andecosystem resources. canprovokeThese infectious climatechange, terrorism, diseases, nuclear peaceandsafety, product safety, thirty years ago. The world isinterdependent inareas as asdiverse financial markets, and Development (Oxford: Oxford University Press, 1987), 27. 1 Gro Harlem Brundtland et al.,Our Common Future. Report of the World Commission on Environment G o most global governance challenges challenges most globalgovernance today asit was aboutsustainabledevelopment Earth isonebut the world isnot’ he key insight expressed in the striking words of the Brundtland Commission –‘The v ernan Sh R aping am an c The Australian National University d K e : N
es an in a dl v d R d iga h T 1 e –remains asrelevant apoliticalstatement about b h es erger Traps t ing th aping h ak e T Gl hucyd u ob r a l i d es
2017 Imperial Springs International Forum · Final Report
to the Westphalian foundations state actors, and changing legitimacy, lower transaction and of multilateralism as citizens conceptions of citizenship compliance costs, and higher become rights holders and and the balance of rights and comfort levels for most countries states are deemed to have responsibilities between citizens as their organisation. The survival responsibilities of sovereignty. and governments. and vitality of international That is, the challenge to the organisations depend on two values and institutions of Yet governance for the planet factors: the quality of their multilateralism results not is weak and multilateralism is governance and their capacity merely from any particular under unprecedented challenge, to change and adapt. Based on distribution of power, but also from arms control to climate human solidarity across borders from systemic factors like the change, international criminal and transcending national nature of the state, the nature of justice and the use of military perspectives, the United Nations power, the nature of security and force overseas. At the centre provides and manages the threats to international security, of the existing multilateral framework for bringing together the actors who drive security order is the United Nations. the world’s leaders to tackle the and insecurity, the global norms No other body can tackle the pressing problems of the day that regulate the international contemporary global pathologies for the survival, development behaviour of state and non- more effectively, with greater and welfare of all peoples, 47 48 Working Papers First, the United State hassuffered a storylines thus geopolitical far in this century. In amatching vein, there havebeen two big foreseeable future. as amultidimensionalmajor power in the there islittleprospect of Russia emerging economic stability over the lastdecade, and ithasrecovered politicaland some nuclear arsenal that candestroy the world shrinkage. Although itretains amassive geographical, demographic andeconomic and then imploded with accompanying communism, achievedsuperpower status established as the bastionof international global power. Second, the Soviet Union was largely althoughnot always asabenign underwrote world peaceandprosperity, Great Britain as and the globalhegemon century. First, the United States displaced in storylines the last big geopolitical principles andnorms. There were two clout. axisconsistsofThe second values, economic muscle, weight andgeopolitical two axes. One axisconsistsof military normative architectures conductedon struggle for the ascendancy of competing Realism, international politicsconsistsof the To paraphrase the familiar mantra of The Shifting GeopoliticalOrder constructed community of strangers. action as the symbolof animaginedand expectations and the locusof collective community, the focus of international the embodiment of the international everywhere. The world body remains innovative economy, itsglobaleconomic best balancedand mostproductive and while the United State remains the biggest, victory inseveral conflict theatres. Similarly, in the capacity orderto impose after military destruction, ithassuffered reverses serial capacityunchallengeable to wreak military end of the Cold War. Although itretains an decline from itsdominant positionat the relative relative Paul Keating holds that asanon Asian power, region, former Australian Prime Minister (PM) established USpolicy. Applying this to our to question these four criticalpillars of and nuclear policy inparticular seemed statements on trade, immigration, alliances clout.Presidentheft andgeopolitical Trump’s underwritten by USmilitary power, economic crafted under American leadershipand the post-1945 liberal international order Donald Trump’s commitment to uphold considerable scepticism aboutPresident a power lessandless,producing andpurpose waning its andglobalinstitutions will serve – the worldconfronting critical questions are amongthemost regionally andglobally, behaves domestically, politically, andhow it economically andevolves How Chinadevelops primacy so so well into the foreseeable future. But US powerful andinfluential actor and will remain The United State isstill the singlemost Thus world order isataninflection point. the fate of billionsof people. will help to shape the destiny of nationsand questions confronting the world. The answers and globally, are among the mostcritical and how itbehavesdomestically, regionally develops economically andevolvespolitically, in both relative andabsolute terms. How China Second, Chinahasacquired impressive power manufacturing, international trade, etc.). (share of globaloutput,automotive dominance hasdeclinedonmostmeasures decline in the American order American the in decline –military, economic,normative–is . There is is . There 2016 Imperial Springs International Forum · Final Report
the United States cannot remain writing the underlying rules of the Thucydides Trap. Like the war “the strategic guarantor” of Asia in global order and a more assertive between the established power perpetuity. It remains “important Chinese diplomacy in that new Sparta and the rising power to the peace and good order of international system. Athens in 5thC BC that interested East Asia… [but] as a balancing Thucydides, Allison looked at and conciliating power.” What does the potential surge sixteen power transitions in the in Chinese international policy last 500 years to conclude that The most authoritative recent activism portend for the global twelve had ended in war. As statement of China’s strategic governance of peace and they elbow each other to assert vision was President Xi’s address to security? One way of framing the primacy in the crowded Asia– the 19th Communist Party Congress topic is to organize the discussion Pacific, could an overconfident on 18 October wherein he heralded around the twin Thucydides and China and an apprehensive United the dawn of a new era of Chinese Kindleberger traps. States trigger a general war? composite national strength, growing poise and self-confidence, Thucydides Trap In contrast to Beijing’s clear-eyed and global power and influence. vision of its global destiny just The three core elements of China’s In the current power transition over the horizon and a clear- vision of the new world order phase, there is a risk of falling headed strategy for getting there, are parity in China–US relations, victim to what Harvard University’s says former Australian PM Kevin growing Chinese influence in Graham Allison calls the Rudd, “the west is increasingly 49 50 Working Papers Consequently, the main form of protection its far-flung network of economicinterests. rudimentary power projection capability and is still too muchof between agap China’s of aUS-styleglobalmilitary empire: there This doesnot, however, presage the rise South ChinaSeaas‘a great wall of sand‘. China’sdescribed reclamation policy in the commander Admiral Harry Harris evocatively and activitiesare growing. USPacific maritime power. Now itsmaritimeinterests China hasbeenacontinental andnot a to peacekeeping personnel. Africa to become P5contributorthe biggest contributions to UNpeaceoperations in Gaddafi’s fall, andincreased its troop trapped inLibya in the chaosof Muammar itsmilitaryused to evacuatenationals in anti-piracy operations in the Gulf of Aden, inDjibouti, participated a modestnavalbase the Indian Oceanand the Arabian Sea,built and Pakistan that giveitpresence around committed to buildingportsinSri Lanka and fortified islandsin the SouthChinaSea, internationally complacent.” Chinahasbuilt self-absorbed, self-satisfied and Taiwan, SouthKorea, Philippines,Singapore, military deployments that include Japan, a ringof USalliesandpartners Asian colonialpowers. Itisencircled by nightmare’ of by subjugation Western and to protect it from arepeat of the ‘historical andposturescapabilities, assets will help Harry Kazianis, suchmilitary because denial strategy in aroundthe seas it,says China ispursuingananti-access/area out at the world through eyes. Chinese But evenhere, itisimportant to look balance in Asia to the historicalnorm. China protectionist USpresident-elect. global trade system from attacks by the defend theplate to up tothe stepped Davos meeting in January, President Xi stability of that order. Thus at the annual has stakethe biggest in the continuing of the existing order; inaddition,itperhaps only hasChinabeenaprincipalbeneficiary primacy of globalorder. arulesbased Not maintenance of regional stability and the in resources andinfrastructure is through of China’s investments massiveoverseas is attempting to correct the military
2017 Imperial Springs International Forum · Final Report
Not only has China been a principal beneficiary of the existing order; in addition, it perhaps has the biggest stake in the continuing stability of that order –
Vietnam, India and Afghanistan. against the perceived strategy Kindleberger Trap The US Pacific Command rules of containment in its own the Pacific from bases in Guam region, not examples of modern China’s exceptional economic and Hawaii and conducts day gunboat diplomacy. Or, and geopolitical weight means intelligence gathering and to put it another way, on what that the future of global finance surveillance operations off basis should we accept a rising and development will be shaped China’s coast. and increasingly self-confident significantly by its choices and China to accommodate to an capabilities. The creation of the To many Chinese, the United intrusive US military presence? BRICS New Development Bank States has been pursuing a and the Contingency Reserve China containment strategy. But if Washington is seen to Arrangements in 2014 were Minghao Zhao argues the US accommodate China’s growing followed by the launch of the AIIB system of hub-and-spokes footprint instead, what lessons and President Xi’s Belt and Road alliances is morphing into a will US allies in the region draw Initiative (BRI) that emphasises ‘networked security system on American power, resolve infrastructure and land-sea across the Indo–Pacific’ that and credibility as a security connectivity. Over 60 countries allows for greater autonomy for guarantor? have joined BRI that comprises Japan in security contributions, ports, airports, railways and anticipates the deployment of a Westerners may believe roads linking China to Southeast US-led missile defence system that the growing integration Asia, Central Asia, the Middle East in South Korea, and draws India and interdependence of and Europe in a ‘new Silk Road’ and Vietnam into the network. China with the regional and that will hugely expand China’s Nor did China fail to notice US international economy makes economic and diplomatic reach. opposition to the China-created armed conflict too costly to With the BRI China is Ramesh Asian Infrastructure Investment contemplate and that the Thakur Navigating the Thucydides Bank (AIIB) and efforts, albeit Pacific military balance is so and Kindleberger Traps futile, to stop US allies from heavily in US favour that China positioning itself at the centre joining. Consequently, China has would not be foolish enough of a global economic hub-and- little choice, Minghao concludes, to challenge Washington. But spoke system that mirrors the but to develop what President Xi what if Beijing believes that the US-centric military hub-and- called the ‘bottom-line concept’ costs to Washington would be spoke system. Only China today of the worst-case scenario. so high that the United States could conceive of a project of would back down? Along many such mind-boggling scale and The buildup and assertion of such misperceptions and ambition – the largest single China’s maritime military assets miscalculations do the bloody infrastructure project in history. and flag demonstrations around rivers of human history flow into The trillion-dollar initiative Indonesia and Australia are the ocean of oblivion for once- symbolises the expansion of attempts at pushback by China great powers. China’s economic, political and
51 52 Working Papers to playing second to playingsecond fiddle? burden andcan the United States acquiesce follow Britain and America inaccepting this in writing andpolicing globalrules. Will China functioned as the de facto world government durable post-1945 order, the USgovernment In supporting global publicgoods. the more world’s leadingpower, itrefused to provide States displaced the United Kingdomas the 1930s by noting that although the United Kindleberger explained the disaster of the Marshall Plan that rebuilt Europe, Charles An intellectual architect of the post-1945 power underwritesglobalpublicgoods. are more stable when the dominant ‘Kindleberger Trap’. International systems ofalso Harvard, points to the alternative Putting geopolitics to oneside Joseph Nye, rules rather than military power. and markets will dependprimarily onglobal the protection of itsinvestment, resources chains andmanufacturing networks. But its positionat the centre of globalsupply strategicandinfluence could consolidate energy corridors,so far atleastitseems geopolitical ties, boost trade andcreate Asia, Africa andLatin America to cement underwriting andbuildinginfrastructure in through andaccess buyinggoods As Chinaexpands itspower andinfluence on anorder guaranteed by UShegemony. synonymous with, then atleastdependent others that ‘global publicgoods’ were, if not dependants. Itsucceededby convincing security and welfare of itsneo-colonial States responsibility legal escaped for the instead of aglobalempire, the United and security. By buildingglobalmarkets technology to underpinUSprosperity a worldwide flow of and capital,goods access-guaranteeing regimes that ensured on control of resources through market Americana Pax resource endowments around the globe. orand use ownership sell of vast natural allowed Britain to extract, process, move colonialism that control legal through Britannica Pax was built on territorial was built muchmore 2017 Imperial Springs International Forum · Final Report
to have neglected the importance of conflating policy interests, while any regime collapse in regional/global public goods with Chinese national Pyongyang would produce a flood of unwelcome interests. The continued failure to do so will refugees streaming into China. guarantee ongoing turbulence and volatility in the emerging new order, whereas success would Some Chinese harbour suspicions that Washington enhance the prospects of stability and longevity of has a strategy to imprison China in a ‘North China’s central role in the new era. Korean trap’. Fu Ying, Chair of the Foreign Affairs Committee of China’s National People’s Congress, China recognises that it has been a major voices a common complaint that Washington beneficiary of the existing international order and expects Beijing to influence North Korea but it has proven to be a fast learner in operating as a ignores advice and proposals tabled by China, responsible power within that order. Its primary goal even though the main driver of Pyongyang’s therefore will not be to perturb the order, but to gain security policy is US action. Earlier she argued that greater influence in writing the rules and running China lacks ‘leverage to force either the U.S. or the the institutions to develop and police the global DPRK to assume their respective responsibilities’. order. China is not intent on exporting its ‘model’. Nevertheless, China remains committed to Rather, its main focus has been on promoting peaceful negotiation that may not meet the political stability and economic growth at home and optimal demands of any party but would bring securing access to resources and markets abroad. maximal benefits to all at minimum cost. However, fully aware that those not at the table risk finding themselves on the menu, China has proven Conclusion: it has the will and the resources to set up parallel Peace, Security and Global Governance but, importantly, not alternative institutions if it is denied its rightful place at the top tables of global The security problématique has morphed from governance institutions defusing and defeating national security threats to risk assessment and management and being North Korea prepared – normatively, organisationally and operationally – to cope with strategic complexity The most acute contemporary manifestation of and uncertainty. In an interdependent, globalised the demand on China to demonstrate responsible and networked world, multilateralism will continue global leadership is the challenge of North Korea’s to be a key aspect of international relations. nuclear weapons. Can China help? Chinese But if they are to remain viable, international leaders and analysts separate their personal organisations – and the values of multilateralism distaste for the riskprone and prickly President embedded in them – must be reconstituted in Kim Jong-un from their abiding strategic interests line with 21st century principles of governance vis-à-vis the peninsula. Stability and conflict- and legitimacy and they must be capacitated to avoidance in its immediate region remains a vital address contemporary challenges effectively. national interest for China’s development and World leaders must collaborate to restructure peaceful rise. Heightened tensions over North the institutions of international governance such Korea’s nuclear antics risk an uncontrolled armed as to make them more robust – so that they can conflict, strengthened US– Japan–South Korea withstand both exogenous and endogenous alliances, and enhanced prospects of nuclear shocks; resilient – so that they can bounce back breakouts by Japan, South Korea and Taiwan. On when they do buckle in the face of some shocks; the other hand, a reunified Korea in alliance with and flexible and adaptable – so that they can deal the United States would be even less compliant with the rapidly changing nature and source of in accommodating China’s strategic and foreign threats, including ‘black swans’. 53 54 Working Papers T military power which isstillconcentrated injustonepole. on the assumption of a multipolar structure, and the international distributionof international intergovernmental institutions, which isstill fragmented andbased is governance betweenthe disconnect the distributionof authority within existing in their separate policiesandphilosophies. The problématique of globalsecurity are insufficient innumber, inadequately resourced incoherent andsometimes The intergovernmental institutions that collectively underpinglobalgovernance international lagsbehind governance the rapid emergence of collectiveproblems. global inequalities,and the like, dramatise how the evolutionof institutionsof pandemics, food and water scarcity, drugandpeople trafficking, nationaland The manifold security along crises, with of the challenges global climatechange, law that protects the innocent without shielding the criminals. threats to the centuries-old dream of a world where force isput ofto the service and vision that canmarry prudent anticipatory self-defence imminent against peace. highlightedThe crises the urgent need for anew institutional framework ofthe complex and absence challenges easy answers to ofthe goal a secure destinations, and the proliferation of terrorist groups in regionsthese underlined s u pPl refugees from their homelands to resettlement camps innear anddistant and no-intervention Syria, the massexodus of and displacedpersons he fragility of post-invasion Iraq, post-intervention Afghanistan andLibya e m en t 2017 Imperial Springs International Forum · Final Report
The basis of the world order has come under strain in recent years due to eight major disconnects:
1. The gap between the exalted expectations of what the United Nations can accomplish and the modest resources given to it;
2. The threats to peace and security, and the obstacles to economic development, lying within rather than between states;
3. The persistence of policy authority and the requisite resources for tackling problems being vested in states, while the source and scope of the problems are global and require multilateral solutions and the globalisation of the process of policy-making;
4. The greater recognition given to individuals as both subjects and objects of international relations, reflecting an internationalised human conscience, while the basic unit of international order remains the sovereign state;
5. The growing gravity of threats rooted in non-state actors, including but not limited to terrorists;
6. Weapons of mass destruction (WMD) that, in their reach and destructiveness, challenge the basis of the territorial state and which, when acquired by non-state actors, have democratised some of the most potent means of using violence;
7. The worsening misalignment between the distribution of military, political and economic power in the real world, and the distribution of decision-making authority in the artificially constructed world of intergovernmental organisations;
8. A similar mismatch between the numbers and types of actors playing ever-expanding roles in civil, political, and economic affairs within and among nations, and the concentration of decision-making authority in intergovernmental institutions.
Thus the crises of state authority and state-building afflicting Afghanistan, Iraq, Libya, Syria and the Ukraine – and how they intersect with engagement and interventions by external actors – can be viewed as symptoms of underlying seismic shifts in world politics.
55 56 Working Papers S uncertainty and flux. uncertaintyflux. and relationships have entered aperiodof forefront,come tothe as theirhave even contradictions among the major powers over the pastsix years. At the same time, have beenreversed insubstantial respects 2010 state mid-1990sfromviolence to the the diminishment of inter-state andintra- of international law andorganization andin The positive trends both in the advancement physically andpolitically, from many quarters. and normativeadvancesare under assault, the great powers. Today, institutional those productive working relationships among and practices andinpartby relatively framework of international norms,institutions, development of alayered andsophisticated stability fostered inpartby the progressive countries, the pursuitof other cardinal objectivesin ecological, the economic,social, P The offirst purpose mustbe globalgovernance to further international peaceand ea and cultural realms islikely to be frustrated, incomplete, and/or unsustainable. security. Without amodicumof stability andpredictability within andbetween and inequitably—from aglobalmega has benefited—however unevenly Second Worldthe ince War,humanity Dr School of International andPublic Affairs, Columbia University c e an Arnold A. SaltzmanProfessor of Professional Practice . Ed d S e cu war ri ty in Gl ty 1. Council illustrates this fundamental fact of life. to reimagine the structure of the Security major reform effort. The sorry history of initiatives in short,ahighly unpropitious time to initiatea prospects for major structural reform. This is, institutions are acting also to inhibit the misguided for anumber of reasons, including: and itsSecurity Council. But this would be institutions, beginning with the United Nations for asweeping restructuring of international Africa, and Asia. It would be tempting to call deficitsinpartsofgovernance the MiddleEast, armed groups as well asby state fragility and sub-regionally, isbeing tested by non-state international system, globally, regionally, and short andmedium term. The capacity of the of international peaceandsecurity over the None of this bodes well for the maintenance d C
compromising the effectiveness of global politicaldivisions The same that are o b a . L l G o uc v ernan k c e
2017 Imperial Springs International Forum · Final Report
The contemporary challenges are largely political, evident over time that the United Nations works best 2. not institutional. There are no quick fixes or when it has regional and sub-regional partners to structural remedies for the challenges stemming share the burden and to bring the advantages of from non-state armed groups that practice terrorism complementarity. and cultural genocide or from rogue regimes that seek weapons of mass destruction and reject The political and security instruments of the international norms and standards. Nor could 4. United Nations have been undergoing continuous enhanced international institutions heal the fissures scrutiny, review, and adjustment for more than two among major powers that have deep historical and decades and have not suffered from a lack of critical geopolitical roots. That would be tantamount to attention. The Security Council has tempered its putting the cart before the horse. working methods repeatedly over those years, leading to greater transparency and inclusiveness. Many of It is not coincidental that the most pressing and these changes have been captured in Presidential 3. unresponsive threats to international peace Note 507, agreed at the end of August. Whether and security are occurring in those places where all of these reforms have actually improved the regional and sub-regional institutions are either least performance of the Council, however, is less clear, as developed or the most resource starved. Modest a number of these reform steps have had unintended enhancements to institutions in New York are not consequences. Likewise, peacekeeping doctrine going to compensate for the lack of effective political and practice have been reinvented time and again, institutions in the Middle East and Asia or the capacity with mixed results. Each new Secretary-General has gaps in African institutions. Likewise, it has become attempted a fresh wave of reforms of the Secretariat,
57 58 Working Papers 5. of the institutions we havecreated than weigh blame the architectural andstructural flaws individual accountability. Ithasbeeneasier to There hasbeenadearthof both collectiveand advancing international peaceandsecurity. and candidly why we often so fall shortin occupy, havebeenslow to analyze rigorously institutions theyStates,like the which, it counts. of couldbesaid The same Member substantial difference on the ground where it faces andhow itcouldmake amore to understand the nature of the challenges farand little timetrying housekeeping too far too much time oninternal politicsand governmental organs. the delivery of wiser counsel to the inter- the exercise of sounder judgement or enhancements donot necessarily guarantee the Council. In the end,however, bureaucratic relationships between the Secretariat and improve the steps to working including
introspective to begin with, spending communitybe too UN tendsto The societies (evensocieties as the actionsor inactionsof nativism andunilateralism inanumber of among major powers and fed the politicsof phenomena haveexacerbated fissures migration. The bottom-up aspectsof these missile proliferation, terrorism, and forced can beseen vividly in terms of nuclear and and security atanincreasing pace. This has beenproducing threats to globalpeace To a worrying degree, regional instability beginning at the regional level. term. Larger couldbe gains found elsewhere, likely to beincremental, atbest, for the near terms of international peaceandsecurity are however, that the benefitsof UNreform in would only grow. Itshouldbeunderstood, of inertia,backsliding, andevenirrelevance continue unabated.Otherwise, the forces to improve andreform globalinstitutions It isessential, nevertheless, that efforts responsibilityprotect. to whether we have fulfilled our own individual 2017 Imperial Springs International Forum · Final Report
Sanctions can only serve as an adjunct to a more comprehensive strategy, not as a substitute for one –
global powers have contributed to but further proliferation in that bilateral talks cannot substitute these problems in the first place). troubled and divided region is for an agreed and sustainable Global responses are necessary a much too real medium-term regional architecture to promote but not sufficient. Neighbours are possibility. Chemical weapons peace and security in Northeast critical actors, but they may be use, not just proliferation, is a Asia and, as a consequence, to part of the problem as often as current reality there and the discourage further nuclear and part of the solution. Or they may international response has been missile proliferation, as well as be inhibited politically by their as disheartening as it has been a deeper arms race, in the sub- very proximity. Both have been sporadic. In terms of the DPRK, the region. There is simply too much the case in the Middle East and unity in the Security Council on history and too little development East Asia, the two regions in which the authorization of sanctions has of political institutions in the these three threats of proliferation, been encouraging, but their full area to be sanguine about its terrorism, and forced migration and consistent implementation security prospects. This is a clear have the most global implications. is far from assured. Sanctions and present danger that cannot These are places where regional are a necessary tool for slowing be solved globally, because its responses and global-regional proliferation and raising the costs roots stem from long-standing partnerships have tended to be of taking that route, but they can contradictions within the region insufficient—least developed only serve as an adjunct to a more that have never been resolved or where most needed. comprehensive strategy, not as a even addressed properly. substitute for one. In terms of nuclear and missile For many decades, various proliferation, over the long-term It is good, of course, that the experts and academics have the reinforcement of global norms leaders of China and the United been suggesting to little is critical. There is a distinct States are engaged in a sustained avail the development of danger that developments in the conversation about the threat elementary preventive security Democratic People’s Republic of posed by the DPRK’s nuclear and and confidence-building Korea (DPRK) and Iran will spark a missile program. However, nothing arrangements in Northeast return to the specter of the kind of has appeared publicly, at least, to Asia. It would seem to be timely more pervasive and more global suggest that there is agreement to revisit some of these and WMD proliferation envisioned by even on the bilateral level on a to begin to think afresh about experts and practitioners a half comprehensive and sustained conflict prevention, mitigation, century ago. There are several strategy for preventing, countering, and resolution in the sub-region. countries in East Asia that have and/or containing the DPRK threat. If it was possible to develop a the technical and financial More to the point, since the end range of such measures and capacity to develop significant of the six-party talks, there has procedures between the US and nuclear weapons capabilities in been no indication that there is Soviet Union (and in some cases short order should they perceive region-wide agreement, including their opposing alliances) in the a political and security need to Japan, South Korea, and Russia, darkest days of the Cold War— do so. The timetable in the Middle as well as the US and China, on steps that undoubtedly helped to East may be a bit more extended, the way forward. Any number of keep the confrontation cold—there 59 60 Working Papers to suggest to suggest the value of anemphasis on territorial sovereignty in Asia would seem inpoint.to becases The concernsabout 2009 in the civil war inSri Lanka would appear Rakhine State or the war crimescommittedin ethnic cleansingof the Rohingya people from lack of anticipation of or response to the brutal unfavorablycompares in Africa. tothat The as well asitsinstitutionalembodiments, policy dialogueonconflict prevention in Asia, More broadly, ofthe stage development of cyber for nationalandinternational security. ofpartners indiscussions the implicationsof in Council deliberations—need to beintegral a and civilsociety—sectors stillseeking voice powers in the sub-region. The privatesector are they concernssolely of the major nuclear Security Council is well-placed to address, nor grown. areThese not matters that the UNor the threat of catalytic war would seem to have would seem to beevenmore acute,as the communication andjoint threat assessment for more assured andreliable meansof talks. In acyber-age, the technical need the five remaining parties to the six-party more of them shouldincludeallor mostof should bemore suchopportunitiesnow and East has had the oppositeeffect. For some brought the world together. War Middle in the The threat of hostilities inNortheast Asia has resolution efforts in Asia. regional-global cooperation onconflict Cambodia may provide amodel for future border conflict between Thailand and Security Council inhelping to resolve the collaboration between ASEAN and the in the future asconditionsevolve. The be givenmore consideration serious the region, butperhaps this notion could in the politicalandhistoricalcontext of attention. This reticence isunderstandable and by the region hasnever received much peacekeeping or policing within the region peacekeeping. Yet the notion of possible hardly strangers to the globalpractice of Asian regional powers, therefore, are have longbeenmajor troop contributors. while India, Pakistan, andBangladesh participate inUNpeacekeeping operations, has taken welcome steps to supportand possible responses. In recent years, China only to discourage globalconsideration of sectarian violence, andmassatrocities, if region-based measures to prevent conflict, 2017 Imperial Springs International Forum · Final Report
years, use of the veto in the Council was declining pursue decidedly narrow and short-term advantages. to record low numbers. That has changed. Last This is not a place where peace would be served by week, the Russian Federation cast its eleventh veto letting the locals take the lead, yet global leadership on the conflict in Syria alone. The horrific violence cannot function until the differences among major and perennial instability in the region has done powers, beginning with the permanent members of much more than divide the Security Council in ways the Council, are eased and their dialogue becomes not witnessed since the Cold War. More critically, it more forward looking and more strategic. They will has spawned insecurity and terrorist acts in several also need to lean more heavily on their allies and parts of Africa as well as in Europe and beyond. proxies in the region concerning the pursuit of a It has swelled the ranks of forcibly displaced more inclusive, balanced, and sustainable peace in populations to levels not experienced since the end the region. The end game, if it ever emerges, should of the Second World War and appears to account include a serious look at how to create regional and for much of the reversal of the positive momentum sub-regional arrangements in the Middle East that that had been achieved in international peace and could be helpful in preventing and resolving conflict security up to 2011. Though situations in Africa still and in discouraging violent extremism. It also should absorb a larger portion of Security Council attention, entail a sober assessment of lessons learned from the Middle East has been gaining an increasingly current and past UN initiatives in the region and of substantial share in recent years. The flouting possibilities going forward, including but not limited to of long-held international human rights and peacekeeping deployments. humanitarian standards has become the new norm in the region, fueled by repeated assaults on civilian There is increasing awareness in the United Nations populations by governments as well as by non- that its ability to maintain international peace state armed groups espousing violent extremism. and security depends heavily on having reliable regional and sub-regional partners with which to The number of parties exceeds even the number work. Yet it still finds such collaborations to be hard of armed conflicts in the Middle East. The conflicts, to identify and even harder to sustain. Sometimes whether fought by governments, militias, or groups different partners have quite distinct viewpoints espousing terrorism—or most often a combination either because they overlap geographically, such of all three—are generally transnational in scope and as in Libya, or because sub-regional and regional character. This complicates the conflict prevention perspectives differ, as was the case in Côte d’Ivoire. and resolution process, as there are just too many Capacity sharing is easier in theory than practice. moving parts to the peace and security puzzle. Each After many years of joint meetings and plans, the conflict seems to bleed into the next. The same UN’s Security Council and the African Union’s Peace could be said about the purposes being pursued by and Security Council still find common action to be would-be peacemakers. As in Sri Lanka in 2009, the a necessary but often bumpy course. Nevertheless, premium assigned to counter-terrorism agendas has there is reason to believe that the future of had a tendency to push other objectives and values international peace and security efforts lies in the aside, such as conflict resolution, good governance, nexus between global and regional/sub-regional human rights, and human protection. In the name initiatives. For all of the inherent frustrations, the of fighting terrorism, the short term has been given African, Latin American, and European experiences precedence over the long term, while the value of suggest that regional approaches to conflict building international law and organization has been prevention and resolution are well worth pursuing. dangerously neglected. Each, in their own way, has carved relationships with global political institutions that have proven Though some countries in the region have been mutually beneficial. This is a path to which shouldering massive burdens from refugee flows, countries in Asia and, eventually, in the Middle East others seem determined to fuel the conflicts and should give serious and priority attention. 61 62 Working Papers T J international tax cooperation, the responsibility of which were given to the Financial Stability Stability Financial the to given were which of responsibility the cooperation, tax international both of which haveobjectives beyondthat go trade. One Road Initiative (with Silk itsassociated Road Fund) and the Shanghai Cooperation Organization, 3 In the trade area, indetail in anissuenot discussed this note, launched Chinahas also the One Belt, had itsepicenters anditsmajor effects in the United States and Western Europe. 2 Iprefer this term to that of global although financial crisisbecause, the crisishadglobaleffects, it Reform of International Corporate Taxation (ICRICT), which Ichair. in this note from previous writings, and from documents of the Independent Commission for the Finance, Minister of Agriculture andDirector of the National PlanningDepartment of Colombia. I borrow Secretary of the UNEconomic Commission for Latin America and the Caribbean, andMinister of * Formerly United Nations Under-Secretary-General for Economic andSocial Affairs, Executive Crisis Financial Atlantic North 2007-2009 The net, two of the major components of which shouldbe abroader of use SDRs andof regional onhowbasket discussion andinitiatedanongoing to strengthen the global financial safety largest issueof Special Drawing Rights (SDRs) inhistory, included the Renminbi (RMB) in the SDR policy coordination and launched several initiatives, notably on financial regulation and and regulation financial on notably initiatives, several launched and coordination policy governance. The G-20 assumed the role of the main organ in charge of macroeconomic macroeconomic of charge in organ main the of role the assumed G-20 The governance. Committee for Development Policy of the United Nations Economic os Co-Director of Banco delaRepública (central bank of Colombia), it into another Great Depression. The IMF revamped itslending facilities, made the protectionist war, turning Recession,Greatperhaps have worsened the whichwould he G-20 was largely also successfulin the early of phase the crisisinavoidinga Professor (on leave) from Columbia University, andchair of the é Ant R an ese d Ec d tt and SocialCouncil (ECOSOC) Board and the OECD, respectively. respectively. OECD, the and Board ing onom onio Oc F Introduction inan i c G c 2 generated major changes in global economic economic global in changes major generated c o ial, F v ce ernan is am cal p O *
2017 Imperial Springs International Forum · Final Report
and interregional financial reserve system, and the rules and part of the financial regulatory arrangements. The BRICS created institutions for sovereign debt agenda and, more broadly, two new financial institutions: restructuring and international its limited trust in multilateral the New Development Bank tax cooperation, among others. cooperation, including in the role (NDB) and the BRICS Contingent Some also generated new of the BWIs. In contrast, China Reserve Arrangement. In turn, all governance issues, particularly by has played a fundamental role multilateral development banks giving major new responsibilities in the defense of multilateral were capitalized during the crisis, to international institutions (the cooperation but has also raised and a new regional development G-20 and OECD) in which most questions regarding the global bank, the Asian Infrastructure countries of the world –and implications of its growth Investment Bank (AIIB) was remarkably most developing slowdown and its high levels of created under the leadership countries— are not members. indebtedness. of China. 3 China has played a New threats have also piled up central role in many of these since the crisis, especially the This note briefly summarizes the reforms, in own capacity or as implications of a long period major issues involved, looking a member of the Bretton Woods of unusual large supply of consecutively at the global Institutions (BWIs), the G-20 and liquidity and the possible debt macroeconomic cooperation the BRICS. and asset price bubbles that it and associated governance may have generated, and the issues, the gaps in the design of Several of these reforms and strong slowdown of growth of the global financial safety net, initiatives were a response to the international trades. On top of the innovations and challenges limitations of existing governance these, the new US Administration of the system of multilateral arrangements, but some of has generated new uncertainties development banks (MDBs), them were certainly incomplete, associated with its protectionist and the implications of limited notably the reform of the global stance, its willingness to roll back international tax cooperation. 63 64 Working Papers does not includereferences to the literature. broader academicdebateson the issuesand Given the nature of the note, itdisregards macroeconomic and financial stability. “macroprudential” instrument to guarantee flows is,under several circumstances, auseful times, andmanagingcross-border capital not anappropriate goal for allcountries atall this view, full liberalization of capital flows is issue. “institutional view”According on this to took onboard in 2012, when itadopted an however, the International Monetary Fund (IMF) of cross-border capital flows, anissue that, of this effort was ofthe absence regulations regulation andsupervision. A major limitation coordinate efforts to strengthen financial Board (FSB), with amajor responsibility to East Asian crisisinto the Financial Stability Financial Stability Forum created after the included thetransformationG-20. ofThis the supervision was another clear priority of the strengthening financial regulation and imbalances in the North Atlantic economies, of association close the crisis with financial a new Great Depression. In turn, given the stopping the Great Recession from becoming central banks, it was nodoubt successfulin Together with collaboration among major our international economiccooperation.” itself in2009as the “premier forum for taken placein the G-20, which designated macroeconomic cooperation hasessentially Since the North Atlantic financial crisis, issues governance cooperation andassociated Global macroeconomic trade experienced also in2009-10 the worst crisis of the post-war years. war era. This contrasts with agrowth of 7.3% a year in1986-2007, and6.6%a year in1950-2007. World according to alternativedata from the CPBNetherlands Bureau), the slowest rate of growth in the post- 5 World export volumes have increased by 2.9%a year in2007-16, according to IMF data (only 1.8% of and reserves forced to adjust to keep around reserves that target. indicator”a “reserve system, under which eachIMF member would havebeen assigned a target level 4 ofThe discussions the early 1970sare illustrative in this regard. The United States backed at the time against against which eachof the indicators the determination of the indicativeguidelines account imbalances. This was followed by andprivatedebts,private savings andcurrent areas: publicsector deficitsanddebts, persistently large imbalancesinseveral that policy actionisrequired to manage 2011, this led to anagreement by the G-20 the Mutual Assessment Process (MAP). In mechanism of macroeconomic cooperation, in place2009, with IMF support,anew In the macroeconomic area, the G-20put economies in the form of large capital flows. advanced countries couldhaveonemerging to limit the spillovers that the policiesof action in this field, nor has there beenany regional agreements, there hasbeenno flows shouldbeallowed inallbilateral and recognized that the management of capital Notably, although the IMF institutional view added, actionhasbeenlimitedallalong. relation to cross-border flows, itshouldbe to weaken regulatory some provisions. In initiatives of the current US Administration which has yet not materialized, are current successful task. Indeed, the major challenge, backtracking. However, ithasbeena fairly pressures to weaken reform efforts andsome in implementation, politicaleconomy differences, and was subject to with delays newthese ruleshadnationalor regional financial institutions.Puttinginplace forsupervision systemically-important cushions, andstronger requirements and and liquidity requirements, counter-cyclical countries, through amixof stronger capital efforts to re-regulate finance in the developed There hasbeenasignificant continuity in the 4 4 would would 2017 Imperial Springs International Forum · Final Report
essentially on a mix of stronger surveillance and peer pressure, which have limited “traction” vis- à-vis the major economies –to use a typical IMF term. It may be essential, therefore, to move to specific targets for some macroeconomic indicators. This is may be particularly important in relation to exchange rates, in order to avoid misalignments of major currencies and, more broadly, to enhance the capacity of exchange rates to contribute to correcting global imbalances and to provide a reasonable level of stability, which is crucial for international trade. The best system would probably be one be assessed, which are explicitly between countries that continued of reference rates among major called “reference values” and to defend expansionary policies currencies, an idea that has been not “targets.” The MAP has to counteract the weakness of suggested by several academic been complemented with the aggregate demand and those that authors through time, and which strengthening of IMF surveillance, placed the priority on public sector would operate, in a sense, as a both multilateral and bilateral, debt sustainability. In turn, the MAP system of managed floating around which includes the Consolidated exercises and IMF surveillance multilaterally agreed parities or Multilateral Surveillance Report, has been unable to moderate the bands. Of course, interventions the Spillover Reports for the rising current account surpluses would have to take into account all “systemic 5” (United States, United of the Eurozone, as well as to macroeconomic determinants of Kingdom, Eurozone, Japan, and soften the spillovers generated the exchange rates and payments China), External Sector Reports by the expansionary monetary imbalances, possibly including the assessing global imbalances, policies of developed countries broader set of indicators chosen by and more “candid” assessments on emerging markets. So, new the G-20 for the MAP. of major economies in Article IV global payments imbalances have Consultations. been generated after the North The new challenges that have 5 Atlantic crisis , in particular the emerged relate to the effects This is probably the most elaborate large surplus of the Eurozone – of the prolonged expansionary system of macroeconomic notably that of Germany—and the monetary policies that the policy cooperation ever put in pressure on emerging economies developed countries have been place. However, success in this to run current account deficits. In implementing for almost a area has been limited. After the contrast, it should be added, two decade: high domestic debt ratios initial Keynesian agreement to major surplus economies, China and/or asset bubbles in some adopt counter-cyclical monetary and Japan, reduced their initial countries, and large capital flows and fiscal policies in the initial external imbalances. and rising external debt ratios phase of the Great Recession, in emerging economies. Under consensus broke down in the The basic problem of global these conditions, a heated debate June 2010 G-20 Toronto meeting, macroeconomic cooperation is has been in place as to whether when there was a deep division that the system continues to rely the unwinding of these policies, 65 66 Working Papers cooperation. In this regard, the bestproposal mechanism of international economic representative and thereby legitimate thus bereplaced by (or evolvedinto) amore institutional architecture. The G-20should institutions ina well-structured international bodies cannot replace representative creates problems, as designate this type of arrangements— also multilateralism” –the term Ihaveused to countries compared to the G-7. But this “elite representation of emerging anddeveloping was, of astep course, forward in terms of that the creation of the G-20ataleaders’ level of the system. In this regard, itcanbeargued A final major issuerelates to the governance US Administration.new generated by the protectionist stanceof the growing challenges to multilateralism in trade trade since the North Atlantic crisis,and the complex by the slow growth of international economic growth havebeenmademore for challenges world internationaltrade. The economy, givenitslarge weight, particularly in slowdown, with implications on the global adjustment generates the risk of astronger been relatively successful,but where financial with its own expansionary policies, which have its highdomesticdebt ratios area associated is aparticular in case this regard, because relatively low by historicalstandards. China regard is that interest rates will continue to be countries.in some The optimistic view in this already started)may generate financial crises particularly by the US(where this process has ad hoc ad self-appointed the framework of the UN a Global Economic Coordination Council in known as the Stiglitz Commission) to create Monetary andFinancial System (better of ExpertsonReforms of the International Commissionof UN is that the on thetable evolve into asystem in which quotas/capital inboth institutions, andshould discussed Congress. A new realignment iscurrently being IMF reform was delayed for five years by US actual share in the world economy—, and the (particularly relativeAsian) totheir economies an under-representation of emerging some over-representation of Western Europe and major inequalitiesin the allocations–an early in the crisis,but the decisionstillleft of the BWIs, quotas/capital were realigned of international tax cooperation. In the cases world regulatory bodiesand incharge those in the IMF, the World Bank, as well asin the include, inparticular, equitableparticipation held atMonterrey, Mexico, in2002. This should Conference onFinancing for Development Consensus” approved at the First International decision-making, asagreed in the “Monterrey countries ininternational economic increase the participationof developing This shouldbepartof abroader effort to from the institutionalstructure of the BWIs. of weighted votes, borrowing in this sense members would elect through asystem onconstituencies, based which the Council organization would bemixed with aboard a member. characterThe universal of this the BWIs belongand WTO shouldbecome system , to which , 2017 Imperial Springs International Forum · Final Report
The G-20 should thus be replaced by (or evolved into) a more representative and thereby legitimate mechanism of international economic cooperation – are regularly adjusted to reflect major objective of international three countries (Colombia, Mexico changes in the shares of countries cooperation over the past and Poland). in the world economy. Basic votes decade. In this area, the most in the IMF should also increase important advance since the The limited use of this facility beyond the levels agreed in 2010, North Atlantic financial crisis was continues to be associated with to give stronger voice to small the redesign of the IMF credit the stigma linked to borrowing developing countries. lines in 2009 –possibly the most from the IMF, the major source ambitious in IMF’s history. They of which is the conditionality In turn, the principle that the included: the much larger levels included in its programs. In heads of both institutions must of financing relative to quotas; the this regard, there has also been be elected through a transparent creation of a contingency credit important advances. The most and open processes, based on lines (the Flexible Credit Line, important were the guidelines the merit of the candidates, and FCL); the possibility of using the on conditionality approved in regardless of nationality, was traditional stand-by agreements 2002, which adopted three basic formally endorsed by the G-20 for preventive purposes, and principles: at the leaders’ level in London in the creation in 2010 of the new April, 2009. However, the election Precautionary Credit Line (later Countries’ ownership of of the IMF Managing Director in Precautionary and Liquidity Line), policies. 2011 and the World Bank President for countries that do not meet The requirement that structural in 2012 represented at best a the criteria of the FCL. This was conditions should be macro- marginal change relative to the complemented by the redesign relevant and focus on the past, and ended up with the of the facilities for low-income core competencies of the traditional election of a Western countries, changing the design IMF (monetary, fiscal, and European to the first of these of the concessional loan lines exchange rate policies, as well institutions and of a US citizen to from a single design to a menu as financial system issues). the second. In turn, the re-election of options, which recognizes the of both of them in 2016 was not a difference among those countries The need to streamline competitive process. Therefore, in terms of debt vulnerabilities conditions to those that are strict adherence to the principle and management capacity, and critical to achieve program goals. of transparency and openness in the capacity of countries with the election of the heads of both strongest policies to eventually Additional reforms introduced institution is still a pending issue. access non-concessionary in March 2009 were to eliminate facilities. These reforms have been structural performance criteria for The still limited global later adjusted to improve their all programs, and to eliminate ex- financial safety net novel features, but a major gap ante conditionality for the FCL. is the limited use of contingency Strengthening the global financial facilities, in particularly the FCL, In contrast to advances in safety net has also been another which has only been tapped by emergency financing, there 67 68 Working Papers – opportunities offer interesting institutions Indeed, regional safety net. the globalfinancial at strengthening of reforms aimed essential element should alsobean architecture institutional multi-layered A dense the judicial decisions against the judicialdecisions against Argentina. The that avoids the problems of interpretation of of debt contracts andanew paripassuclause aggregation facilitate that clauses the include in 2013, there was anagreement in2014 to the difficulties faced by Argentina inUScourts contracts. In recent years, particularly after spread of indebt collective actionclauses however,led, at thetime Discussion tothe Debt Restructuring Mechanism, which failed. the 2001–03 IMF proposal to create a Sovereign attempt atcreating aregime in this area was financial architecture. The mostimportant in gaps the international monetary and creditors continues to beoneof the major debtmanage restructuring involving private ofabsence aninstitutional framework to management of debt overhangs.In fact, the has beenonly limitedprogress in the to beplaguedby three major problems: the SDRbasket in2014. The system continues history in2009,and the inclusionof the RMBin decisions were the largest issueof SDRs in still inmarginal way, the RMB. Two important and amyriad of currencies –including,but major globalcurrency, followed by the euro the crisis. The dollar continues to be the been subject to any significant reforms since Indeed, system the globalreserve hasnot a reform in this area inrecent times. having been the mostimportant supportersof incipient discussion, with ChinaandFrance system. This issuehasonly beensubject to an part of abroader reform of the globalreserve as asource of resources for IMF lending,as importance of the reform aimedatusingSDRs for US Congress to approve it.Hence the correct decision,althoughit took five years doubling of quotas agreed in2010 was a other global aggregates. For this reason, the available for IMF behind lendinghavelagged counter-cyclical objective, the resources Although IMF lendinghasclearly met its renegotiations. resolve disputesamong the parties indebt lacks international rulesandinstitutions to be insufficient under criticalconditions,and voluntary negotiations, which hasshown to continues to be weak, asitdependson restructuring. However, the basic framework very broad principlesonsovereign debt United Nations adopted also in2015some actions initsmonetary policy decisions. account the international spilloversof its issuing countries doesnot take into the related fact that the major reserve as the major international currency, and use ofuse anationalcurrency The “Triffin dilemma”, associated with the global recessionary biasduringcrises. vs. surpluscountries, which generates a The asymmetric adjustment of deficit 6 6 (the USdollar) 2017 Imperial Springs International Forum · Final Report
The lack of an adequate safety net, which generates a strong demand for foreign exchange reserves by emerging and developing countries as self-insurance, and as a means to manage the strongly pro-cyclical capital flows that they face.
Aside from supporting the transition to a multicurrency standard, reform efforts should concentrate on enhancing the role of the only truly global reserve asset that the world has created: the SDRs. This implies, in particular, making regular SDR allocations to respond to the growing demand for reserves at the world level 7 , doing those allocations in a counter-cyclical way to contribute to global financial stability, and making them the source of all IMF lending. This would make global monetary creation similar to how central banks create domestic money and eliminate the dependence of the IMF on “arrangements to borrow” and similar mechanisms. A simple mechanism that I have suggested is to treat the SDRs not used by countries as deposits in (or lending to) the IMF that could then be used by the institution to lend to countries in need.
A dense multi-layer institutional architecture should also be an essential element of reforms aimed at strengthening the global financial safety net. Indeed, a multi-layered architecture that relies more broadly on the European Stability Mechanism, and the BRICS regional institutions offers interesting opportunities. Contingency Reserve Arrangement. The swap credit Indeed, in a heterogeneous international community, lines of the US Federal Reserve with several developed networks of global, regional and national institutions country central banks, as well as the growing network can provide a better system of governance than of swap arrangements of the People’s Bank of China arrangements based on single global organizations. and a few of other central banks, should be added What this means is that the IMF of the future should to this list. These complementary arrangements can be conceived as the apex of a network of regional take different forms—payments agreements, swap and interregional reserve funds –such as the Latin lines, reserve pools, common central banks—and American Reserve Fund (FLAR), the Chiang Mai Initiative, exhibit different degrees of multilateralization. Careful
6 The essential problem, in Robert Triffin’s formulation, is that the provision of international liquidity requires that the country supplying the reserve currency run balance-of-payments deficits, a fact that may eventually erode the confidence in that currency. This problem was strongly mitigated during the North Atlantic crisis by a strong demand for dollar liquidity and the reduction in the US current account deficit. 7 Most estimates indicate that allocations for the equivalent of US$200–300 billion a year would be reasonable, but even this size of allocation would only increase the share of SDRs in non-gold reserves to just over one-tenth in the 2020s, indicating that SDRs would still largely complement other reserve assets. Since the demand for reserves by emerging and developing countries is larger than that by developed countries, this factor could also be included as a criteria for allocations, thus introducing a “development link” in the system. 69 70 Working Papers Investment Bank (EIB). In turn, amixof political (and, indeed,largest MDB), the European of the largest regional development bank inequalities were behind the early creation integration and the call to reduce regional one (the Islamic Development Bank). Regional of sub-regional banks, and aninterregional of the regional development banks, aseries enriched inlater decades with the creation the core of the World Bank group, but was Reconstruction andDevelopment (IBRD), now born with the creation of the Internal Bank for regional institutions. The system was indeed partsofand, insome the world, several sub- development banks, interregional some banks the World Bank co-exists with several regional monetary system is that of the MDBs, where such as the onesuggested for the international The bestexample of amulti-layer architecture development banks of the system of multilateral Innovations andchallenges institutions aspartof IMF quotas. contributions of capitalor reserves to these for arrangements,these andcounting the could be the creation of IMF credit lines geometry.” Someof the possiblemechanisms arrangementsusing diverse –a“variable between the IMF andregional agreements, consideration shouldbegiven to the links argument in favor of the creation of the AIIB. of MDBs inEast Asia is,of astrong course, more limited where the coverage of of the services MDBs is America andEast Asia are the two regions Europe. The three large economiesof Latin Central Asia and,interestingly, Western (excluding its three largest economies), followed by Latin America and the Caribbean World Bank group is the major player. They are Sub-Saharan Africa, and wherethe South Asia the Islamic Development Bank, followed by the strong network of Arab institutionsand ofservices MDBs, with adominant share of North Africa is the region bestcovered by the ways itsdifferent layers. The MiddleEast and varies across regions, andmixes in variable However, the coverage of by services MDBs of the world, including Western Europe. supplyuseful of to mostcountries services This network of institutionsprovides quitea important case). China Development Bank being the most now some from emerging economies(the international development functions, including development banks are partly also involved in NDB, andanew regional bank, the AIIB. National creation in2015of anew interregional bank, the process hasnot andnow ceased includes the emerging anddevelopingcountries.serve This behind the creation of mostof the MDBs that motivations andintegration efforts were 8 . The incomplete development 2017 Imperial Springs International Forum · Final Report
With the exception of the EIB, of the post-war period, but now “knowledge bank”, but that also which is made up entirely of particularly the poorest countries. applies to other Banks. developed countries, all of which This includes giving access can borrow from the institution— in better conditions to those The major roles for the MDBs and is thus a “cooperative”—most countries that can only borrow that have been highlighted in regional development banks in international markets with recent debates are infrastructure include a division between short maturities and/or high risk financing and that for mitigation developing country borrowers and premiums. This is a major benefit and adaptation to climate non-borrowing developed country of risk sharing by all borrowers, as change –and more broadly to members. This capital structure they are subject to the same credit support the provision of global allows developing nations to conditions in terms of access to environmental public goods. The benefit from the stronger credit MDB financing –which can also first of these roles underscores rating of the developed countries. be understood as a principle of the significant under-investment It is amplified by the practice solidarity. Due to the “sudden in infrastructure –particularly of maintaining a large ratio of stops” in external financing during the road infrastructure—in many subscribed to paid-in capital, crises, or the rising risk premiums developing country regions which may be understood for emerging and developing (we could day, even in several as a guarantee to the lending countries that characterize those developed countries). It also operations of these institutions. periods, MDBs also have a clear captures the disregard that the The best example of sub-regional counter-cyclical role. This was World Bank –and other MDBs bank but also of the “cooperative” finally recognized during the North under its influence— gave to this model in the developing world is Atlantic crisis, leading to a major area in its financing strategy after the Development Bank of Latin capitalization of regional MDBs it shifted its attention to market America, the new name adopted as well as a smaller one for the reforms. The second is, of course, by the Andean Development IBRD. It was also recognized in a major issue going forward, but Corporation (CAF according the expansion of trade financing the role of MDBs complements to its Spanish acronym), a lines, to compensate for the fact that of specialized facilities –the transformation that reflects the that they were considerably cut Climate Change Funds, the older fact that its gradual expansion by commercial banks at the peak Global Environmental Facility and has made it a truly regional of the crisis. Aside from their the growing role of environmental development bank (Spain and functions as credit institutions, programs in official development Portugal joined in recent years, but the MDBs are major forums assistance. These are two areas they are also potential borrowers). for dialogue among member where much additional financing countries on development is required in the future. A major role of MDBs has been to policies and experiences, and on give to lend to countries that lack ways to strengthen cooperation, Beyond them, MDBs can play a adequate access to international and they are important research role in supporting many other capital markets: all developing centers –a concept is highlighted fields of public policy. One countries in the first decades in the view of the World Bank as a of them is the promotion of
8 According to my estimates with balances from these institutions in 2010, the assets of MDBs relative to regional GDPs were indeed highest in the Middle East and North Africa (8.6%) followed by South Asia (5.5%) and Sub-Saharan Africa (4.9%). Latin America and the Caribbean excluding Argentina, Brazil and Mexico came next (4.1%) together with Central Asia (3.9%), the core European Union (EU-15, with 3.7%) and the rest of Western Europe (3.9%). The three large Latin American countries already mentioned and East Asia were the least covered by the MDBs: 1.9% and 1.0% of their GDPs, respectively.
71 72 Working Papers role inallof them development banks, which haveacrucial national should workclosely with In allof areas,these as well asinMDBs this area of publicpolicy. policies–includinginnovationsin social promoting inclusionandassociated social of course, they haveanimportant role in emerging anddevelopingcountries. And, and innovationsystems, particularly in promotionof technologyis the science, the MDBs are involved, including the EIB. Another microenterprises –an area in which many access to financing by medium, smalland more inclusive financial systems, notably US Administrations, theirreluctance to major obstaclehas been,sinceprevious process,leader in this whereasbeen the the MDBs in the future. Chinahas,of course, major capitalinjectionsinto the system of This analysis underscores that need for possible areas. infrastructure andinnovation,amongother involved inpublic-private partnershipsin direct investment andcapital funds complement private financing, including 9 . They shouldalso governance structure. governance have traditionally madeon the World Bank that replicate the criticism that developing avoid creating decision-makingstructures the new MDBs –the NDBand the AIIB— should that, in terms of voice of member countries, the President of the World Bank. Ishouldadd well asa fair and transparent system to elect developing countries in institutions,as these capital shares and,more broadly, voice of has to governance to do with adequate As already indicated,a final issuerelated above of how they complement eachother. disregards the several ways highlighted banks compete with private financing say,Needless to the viewdevelopment that presented itsreport to USCongress in2000. (better known asMeltzer Commission), who Financial Institution Advisory Commission impactof–a lagged the International that haveaccess to privatecapitalmarkets stop lending to middle-incomecountries current Administration thattheyshould been enhancedby the insistenceof the in the capitalof the institutions. This has resistance to reduce the share of the US Banks,capitalize together the with their 2017 Imperial Springs International Forum · Final Report
Implications of limited international transactions with each other, and can determine tax cooperation “transfer prices” for those transactions, allowing the corporate group to report a large part of its profits in A myriad of public scandals of global reach – low-tax jurisdictions or tax havens. Such prices may Luxleaks, low or nil taxation of major multinational differ significantly from a true market price that would corporations (MNCs) in Ireland, the Panama papers emerge from transactions among unrelated parties and, more recently, the Paradise papers, among – “arm’s length prices” according to the terminology others—have shown how dysfunctional the current used in this debate. The regulation of transfer prices tax system is in today’s globalization. Corporations to approach arm’s length prices has been endorsed relocate business activities –and, in some cases, by the OECD and the United Nations in their Model Tax just the recording of profits— to avoid taxation and Conventions, which are widely used as the basis for do not pay, therefore, their fair share of taxes in the bilateral tax treaties. countries where they do business. The personal fortunes of many rich people are also parked in tax In fact, ensuring that transfer prices follow the arm’s havens. Competition among countries to reduce length principle is difficult even when transactions taxes to attract investment has further contributed involve goods, due to quality differences of similar to the erosion of the corporate tax rates and bases, products. But it becomes more difficult or outright and has led countries to grant large benefits to impossible when it involves intangible assets: very rich people. While there are disagreements intellectual property (patents, copyrights, brands and about what is an appropriate tax system is, there trademarks), goodwill, brand recognition, and control is a virtually universal consensus that what has of commercial networks. Because this knowledge- occurred is unfair. The basic reason is that low based capital is highly mobile and difficult to value, levels of taxation by corporations and high income and related-party transactions are increasingly related earners may lead governments to cut essential to intangibles, the arm’s length principle cannot be public services and infrastructure spending, applied, as those transactions have no comparable or shift the tax burden onto ordinary citizens, commercial counterparts. Different parts of a MNC usually in the form of regressive consumption can, therefore, charge each other royalties and other taxes such as value-added taxes. Tax abuse has fees for the use of patents, brands, or trademarks, incited widespread public anger and triggered and they can record the costs of management and investigations by parliaments, government and investment services, act as intermediaries for product international journalists into the tax practices of sales, or make loans to one another in such a way several of the best-known MNCs, of the several legal that they allocate large part of overall corporate profits offices and banks that facilitate such practices, and to low or no tax jurisdictions. The more complex the of the policies adopted by tax havens. web of related companies within the multinational corporate group, the easier it is to avoid taxation, and In the case MNCs, the basic problem is that the tax the more expensive and time consuming it is for tax system is based on the separate entity principle, administrations to challenge the related transactions. under which the headquarter of a corporation and its different subsidiaries are treated as It has thus become painfully clear that the current separate firms. However, they engage in multiple separate entity approach and its transfer pricing system
9 In a recent project of Columbia University’s Initiative for Policy Dialogue, which was co-directed by Stephany Griffith-Jones and myself, we underscored five areas of action for national development banks to help correct market failures: financial inclusion, availability of long-term financing (particularly for infrastructure), promotion of innovation, financing of environmental public goods, and counter-cyclical financing. These areas match those mentioned in this note in relation to MDBs.
73 74 Working Papers attributions haveeconomicsubstance. The first oneis the “primary purpose test”, which two important revisions to bilateral tax treaties represent astep forward inensuring that income reporting isastep toward transparency –though only for alimitednumber of MNCs. Additionally, paid, employees ineachcountry andassets where they dobusiness.Country-by-country created.” Ithasadopted ofthe obligation very large MNCs to report the revenues, profits, taxes is to ensure that MNCsare taxed “where economicactivities take placeand where value is The BEPSInitiative hasadopted important recommendations. Ithasset that itsbasic framework Shifting (BEPS) Initiative, under the leadershipof OECD. examples of transfer led priceabuses, the G-20in2012 to launch Erosionthe Base andProfit andinvestigationsscandals conductedby several industrialcountries that uncovered multiple –now 147membersand15international In organizations asobservers. turn, the international was created by the OECD in2000andrestructured in2009 to allow anexpanded membership committee. The Global Forum on Transparency andExchange of Information for Tax Purposes Cooperation in Tax Matters, which was upgraded in2004 from anad-hoc to aregular technical The United Nations hasdoneso through the ECOSOC Committee of ExpertsonInternational treaties. There been hasalso tax cooperation by major developedcountries in the OECD. International cooperation in this area hasessentially relied onmultiplebilateral double taxation which are smallandmedium-sized. creates also unfairabuse competitive advantages for domestic MNCsasagainst firms, many of $500 billion for OECD countries, or in the order of 1%of their GDP. International corporate tax billion inrevenue or losses about1.3%of GDP for non-OECD countries andbetween $400and income tax revenues. IMF researchers haveoffered ahigher estimateof approximately $200 and 240billionannually, equivalent to between 4percent and10percent of globalcorporate estimates erosionthat base andprofit shiftinggenerates worldwide oftax losses between $100 cannot work inaglobally integrated economy. andknowledge-based The OECD conservatively 2017 Imperial Springs International Forum · Final Report
provides more legal authority replicate systems that have been mark-ups on certain transactions. for countries to evaluate the used to divide corporate profits at economic substance of income the subnational level in the United There is also a need to rethink attribution and challenge the States, Canada and Switzerland the institutional structure of characterization of transactions for almost a century. In recent international tax cooperation. that have the primary purpose of years, the European Union has The basic reason is that, despite avoiding taxation. The second is also been discussing a proposal the significant work that it has the “permanent establishment” or for a system of “Common done, the OECD is not a global economic nexus rules, which will Consolidated Corporate Tax Base”, representative institution and expand source countries’ ability which has been approved by the counts with only a few emerging to tax economic activity occurring European Parliament but has and no low-income countries through commissionaire not yet reached the unanimous as members. This is also true arrangements within their borders consensus required for full of the BEPS process, despite or through electronic commerce. implementation. the fact that it has included the nine non-OECD G-20 nations. A more important reform would During the transition to the new The Global Forum has a broader be to move to a system that system, ICRICT has proposed that membership, but it is still under corrects the major problem of leading developed and emerging the OECD axis. For this reason, the system: the separate entity nations should impose a global the major proposal is to upgrade principle. This would be a system minimum corporate tax rate to the UN Committee of Experts on in which MNCs would be taxed as stop the race to the bottom. There International Cooperation in Tax single and unified firms. This has could also be a broader use of Matters to an intergovernmental been the idea promoted by the the profit-split method already Commission and provide it with Independent Commission for the used by the OECD’s guidelines on adequate resources. This proposal Reform of International Corporate transfer pricing under very limited was made by the UN Secretary Taxation (ICRICT) 10. Under such a circumstances, which combines General in 2004 and again by system, there would be no transfer company profits from groups of the Group of 77 and China to the pricing because global corporate transactions (usually by activity) Third International Conference profits would be consolidated, and then apportions them among on Financing for Development and thus no profits would be jurisdictions by economic factors, that took place in Addis Ababa in shifted through intra-company such as revenue and expenses. 2015. ICRICT has endorsed this transactions. This would require an ICRICT has also supported the proposal and has recommended agreement as to how global profits design of a UN Convention to that the UN Global Compact and associated taxes would be combat abusive tax practices, the and the OECD Guidelines for divided among countries, through creation of a global asset registry, Multinational Enterprises should a “formulary apportionment” and the use of special methods be strengthened by explicitly based on sales, employment to estimate transfer prices for tax recognizing the obligation to pay and resources used, among purposes, such as the Brazilian taxes as a preeminent corporate other possible factors. This would system to apply fixed margins and social responsibility.
10 See the different reports of this Commission in http://www.icrict.org/
75 76 Working Papers T Niño phenomenon,2017doesnot 2014, 2015,and2016coincided with the El 20 millionpeople. brought famine to East Africa, affecting over across North America andasevere drought while forest fires raged inEurope and of deadand tens of displaced, thousands subcontinentacrossleft thousands the that inIndia, resultingmonsoons in flooding superchargedclimate change the their way to the United States. Elsewhere, on Caribbeanhurricanes tormented the were felt throughout 2017 asaspateof The impactsof accelerating climate change years onrecord. on course to endasoneof the three hottest C Al Former President of Green Cross International. WLA-CdM Advisor li years for global temperatures.yearsforglobal While three record-breaking consecutive he current decadehasalready seen ma impacts of and climatechange, what the world iscurrently doing. scientific evidenceshows mustbedone to prevent the worst e However, there isasignificant between actiongap what the solutions solutions for reducing emissionsare now readily available. The scientific case The scientific case for hasbeen made, and climatechange t e x , d Lea an ers — d yet isstill h re Lik ip
an es hn four than fast —less closing is threshold 1.5°C window to avoidbreaching the aspirational two years in ago the Paris Agreement. The the 2°C threshold by set countries only average global temperatures will pass warming isinevitable:it95%likely that and scientists warn that muchmore Today’s impactsare climatechange severe regional stability inmany partsof the world. All this will affect adversely both globaland island statesandlow lyingcoastalareas. rise which would inundateseveral small displacement of level peopleandsea for food security, water availability, change would implications haveserious risks associated with the impacts of climate of life and the earth’s ecosystems. Other other risks for humanbeingsandall forms Climate change would increase several d Su s h t ainab o t al i li ty ty 2017 Imperial Springs International Forum · Final Report years remain before the likelihood rises above one CO2 levels are the in three — and the efforts countries have pledged to undertake, if delivered, are instead estimated to highest they have result in up to 3°C warming. been in 800,000 Even with the Paris Agreement in place, CO2 levels are the highest they have been in 800,000 years years and keep and keep rising: 2016 saw the largest increase on rising record. –
Figure 1. Source: IPCC AR5 SYR SPM
The social and political dimensions of direction to the talks. Since the May meeting, Parties implementing the solutions to the climate change have expressed their views on each agenda item via problem is at the heart of this action gap. dozens of focused written submissions, all of which Since gavelling through the Paris Agreement in facilitators will have to consider and include as they December 2015, the international community has met move forward. only four times under the United Nations Framework Convention on Climate Change to negotiate the On November 6–17 countries gathered once again details of how to put it into practice. Although the for the 23rd annual Conference of the Parties (COP Agreement quickly “entered into force” legally, 23). Despite demonstrating political commitment, negotiators are still working towards a December 2018 major divergences remain over key questions which deadline to finalise the implementation guidelines, or were not wholly addressed by COP 23. One recurring “rule-book,” of the Agreement, which they are doing issue is how to treat differentiation between countries, in a working group called the Ad-hoc Working Group which affects all other agenda items. Another issue on the Paris Agreement (APA), jointly chaired by Saudi is what information exactly are countries required Arabia and New Zealand. to note in their Nationally Determined Contributions, with developed countries seemingly intent on At the May meeting in Bonn this discussion evolved re-negotiating the Paris Agreement so that these from conceptual to concrete as the facilitators of pledges — and the transparency framework being built negotiations on unresolved issues prepared papers to monitor them — only relate to mitigation efforts, (“informal notes”) which lent some structure and rather than all efforts. 77 78 Working Papers – cheaper thancoalinChina In 2021,solarpower isgoing tobe effort andinvesting $100 billionindomestic broadly meeting its fair share of the collective Firstly, Chinaisalready aclimateleader, realityon twofronts. more responsibility. This misunderstands the and havesought to pressure China to take on orderflexibilityin remain,U.S. to tempt to the aboutallowinghave madenoises more Some Parties of andsections civilsociety energy, ashasIndia. has put forward anambitiousplan for solar and Germany havenot joined. Though China Major like coalusers China, the US,Russia, and the Marshall Islands. the alliance was startedby the UK,Canada, Agreement. Called the Powering Past Coal, US administration decision to leaveParis thinly veiled criticalresponse to the current at coaluse against the COP 23inBonn, asa At least15countries havejoinedanalliance notable for anumber of specificreasons. As well as the regular features common negotiations, COPto allclimatechange 23 was also have said they will ensure more symmetry in the process. priorities. The desire for abalancedapproach isnominally shared by the APA co-chairs, who issues some far faster than others inorder to benefit from an“early harvest” of their Developing countries havebeen very concerned that developedcountries are advancing geopolitical dynamicsata geopolitical time when ambitionmustberatcheted up. in Bonn will beriddled with concernsabouthow this will affect the the U.S. will continue at to haveaseat the table. Naturally, the meeting actually withdraw, meaning that for the duration of Trump’s term inoffice the U.S. outof the Paris Agreement. Legally, the U.S. must wait until 2020 to In June Donald Trump announced that he would passlegislation to take society report oncorporate interference in clear and will beexposed by amajor civil stocktake. The motivation for is doingso of support, compliance,and the global finance, technology transfer, transparency issues suchasadaptation, lossanddamage, the U.S. islikely to frustrate progress on Along with itsalliesin the “Umbrella Group,” disruptively onbehalf of fossil fuel industries. so the possibility remains of the U.S. acting to protect interests itsongoing in the talks, indicated that the U.S. inorderwill engage ex-CEO of ExxonMobil, Rex has Tillerson, role they will pursue.Secretary of State and Paris Agreement, itremains to beseen what Partystill technicallyU.S.a With the tothe as oneof the principalblockers of progress. entire history of the negotiations ithasacted that the U.S. was ever aleader rather more glaringmistake is to believe renewable energy each year. The second, — in fact for the 2017 Imperial Springs International Forum · Final Report
the climate negotiations. Due to the close ties between the Trump Administration and major polluters some advocates have called for the U.S. to be isolated and ignored in the process.
A good strategy must be at the heart of a climate change solution – combining existing scientific, technical and economic knowledge into a clear overarching blueprints.
The IPCC AR5 clearly established that if temperature increase was to be limited to 20C by the end of the century, then: a. Global GHG emissions would have to be reduced by 40-70% in 2050 compared to 2010 levels. b. By the end of this century emissions would have to reach net zero or negative levels. c. Global emissions need to be curbed within the next 5 to 15 years. The IPCC AR5 was released in 2014, and since then three years have elapsed. Hence, a reduction in emissions should not be delayed beyond 2020 if the timeframe of 5 to 15 years is to be followed.
A large range of mitigation measures are required to be taken in hand if the goal of limiting temperature increase to 20C is to be met by the end of this century. Essentially these measures would include: a. More efficient use of energy. b. Greater use of low-carbon and no-carbon energy – Many of the relevant technologies exist today, and can be used extensively. This would be necessary, because CO2 emissions reduction by 90% between 2040 and 2070 over 2010 levels would be required. c. Improved carbon sinks – Deforestation would have to be eliminated, forest area expanded and forest management improved substantially. There would also be scope for using bioenergy along with carbon capture and storage. d. Lifestyle and behavioural changes – These changes would require elimination of waste and major changes in dietary patterns. The world would have to eat much less meat to reduce GHG emissions.
79 80 Working Papers To make matters worse, the voluntary targets2012–2020. mitigation for period the the Doha Amendment which set them countries havedragged their heelson ratifying warming isalready locked in.Developed aheadisevengreaterchallenge much asso has lostadecade to inaction,meaning the Kyoto Protocol endedin2012 the world Since the first commitment periodof the incostsasreflectedchanges in this figure. of need capitalassets to keep inmind projected powerbased supply. Investments andcreation would becomesignificantly cheaper than coal rapidly, andaround 2020or solar so, and wind to fossil supplyfuel based ischanging very relative costof renewable energy with respect It canbeseen from Figure 2above that the Germany and the U.S)—faster than many expect. In 2021,solar power isgoing to becheaper than coalinChina(already availableinplaceslike A major milestoneiscomingsoon for the world’s polluter. biggest more excuses for low ambition. continue to stack up, there are no impacts of climatechange to fall justas the devastating renewable energy continuing the way and with the priceof of the Paris Agreement outof With thetreaty-negotiations induced displacement are becomingharder of adaptation, andclimate- lossanddamage, issues impacts worldwide,the With worsening what support they havebeenoffered. on pledges the basisof equity andinlight of how countries’the Dialogue shouldassess new report containing recommendations on 2023 Global Stock Take. Of note shouldbea of both the 2018Facilitative Dialogue and the In Bonn, negotiations proceeded on the design requisite finance. without requirements which they are not able to meet which they will beburdened with additional they fear anundifferentiated system in the transparency framework beingnegotiated, they require from developedcountries. As with whether or not they havereceived the support Dialogue doesnot take into consideration as developedcountries are pushing that the Developing countries are cautious,however, Stock Take” in2023. “Facilitative Dialogue,” followed by a“Global The first phase will take placein2018 with a a mechanismexists to ratchet upambition. Paris Agreement aren’t muchbetter. However, “NationallyContributions”Determined tothe bg/2rl3pvQ https://bloom. Source: Figure 2. 2017 Imperial Springs International Forum · Final Report
to avoid. The Warsaw International implementation of the Paris However, mitigation of emissions of Mechanism on Loss and Damage Agreement, developed countries have GHGs is also associated with several has a 5-year work plan in place but not been forthcoming with a plan for co-benefits, such as lower levels it has not yet been designated a how to reach the $100 billion per year of pollution at the local level, higher permanent source of finance. minimum funding they are obliged energy security, greater agricultural to mobilise by 2020. Details of what yields and greater employment Developed countries are still scaled-up funding will be on offer potential. extremely unwilling to discuss after 2025 are completely lacking. financing for loss and damage as The major conclusion from this they see this as an admission of On top of this, the methodology used diagram is that a comprehensive liability for climate change disasters by developed countries to account for approach is far less costly than occurring around the world. The the support they are already providing following the three objectives shown unwillingness extends into finance is highly inflationary. Developed on a separate basis. In other words, for adaptation: though Parties agreed countries claim to mobilize around in terms of costs the sum of the that the Adaptation Fund would serve $25 billion per year, but this is parts is much higher than the costs the Paris Agreement, developed largely through existing bilateral of a comprehensive plan, and, countries have been dragging their channels and is not properly new therefore, it is far better to follow an heels by requesting another full review and additional. The Green Climate integrated approach than to meet of the Fund before they will agree on Fund has so far received only $10.3 these objectives through individual the exact institutional arrangements. billion. This amount is far short of the measures. Some are also insisting that market tens of trillions of dollars it will cost mechanisms be tasked with for developing countries to fulfil their The choice for humanity is very resourcing the Fund, which has not pledges, and the world will be on track clear. If we do not take action previously proven a successful way for upwards of 4 or even 5°C warming. adequately and urgently to deal with to raise this badly needed money for climate change, then the costs of communities. Mitigating the emissions of damage in economic terms would greenhouse gases and adapting to increase disproportionately with Where’s the Finance? the impacts of climate change is increases in average temperature. often painted as an insurmountable The non-monetized costs would Lack of adequate finance is not challenge, which perhaps individuals be even higher, including extinction entirely contained to efforts to address and local institutions may feel leaves of species, higher acidification of loss and damage or adaptation. them helpless against the magnitude the oceans, higher mortality and Even with the focus shifting towards of the global challenge. sickness and damage to coral reefs, etc. The cost of mitigation to ensure that temperature increase by the year 2100 does not exceed 2oC over pre-industrial levels would amount to no more than 0.06% of the global GDP annually.
Against that background, it would be useful to remember the quotation from Confucius, which stated “Like Weather, one’s fortune may change by the evening.”
Source: IPCC AR5 WG3 Report 81 82 Working Papers I Germany andItaly) in1995,equalled them in2015,andcouldbe twice their size in2040. Turkey – which were, inaggregate, half the size of the G7countries (U.S., Britain, Canada, France, the E7(the bigemerging seven economies–China,India, Indonesia, Brazil, Russia, Mexico and that the EUholds together –rank fourth at9per cent. Even more surprisingly, what PWC call U.S. will take third placeat12per cent, and the 27countries of the European Union –assuming comprising 20per cent of globalGDP, with India’s at15per biggest, the second cent. The assurance firm, hassuggested that, in2050,China’s economy will be the world’s largest, n acomprehensive forecast published this year, PWC R ef S l Executive Vice Chair, Future World Foundation e e ct án M ions on aN Framingquestion the . C W ew l , the international auditand ear or ld O ld y r d er
2017 Imperial Springs International Forum · Final Report
In Global Trends: Paradox of Progress, published Clarifying the concept in January 2017, the U.S. National Intelligence Council states unambiguously: A recent study by the Rand Corporation i defines “The next five years will see rising tensions within the “international order” as “the body of rules, norms, and between countries. Global growth will slow, and institutions that govern relations among the just as increasingly complex global challenges key players in the international environment.” It impend. An ever-widening range of states, continues: “Today’s order includes a complex mix of organizations, and empowered individuals will formal global institutions, such as the United Nations shape geopolitics. For better and worse, the and the World Trade Organization; bilateral and emerging global landscape is drawing to a close regional security organizations; and liberal political an era of American dominance following the norms.” A comprehensive list of these, reflecting Cold War. So, too, perhaps is the rules-based both those deriving from the post-WWII global order, international order that emerged after World and those that have been created in the past two War II. It will be much harder to cooperate decades, can be subdivided into foundational norms internationally and govern in ways publics and institutions, security norms and institutions, expect. Veto players will threaten to block economic norms and institutions, and institutions collaboration at every turn, while information promoting common [liberal] values and collective ii ‘echo chambers’ will reinforce countless goods . competing realities, undermining shared understandings of world events.” The world in 2017 is a far better place than it was before 1945, when the United States, having defeated “Underlying this crisis in cooperation will be local, Nazi Germany with its allies in Europe, and close to national, and international differences about the defeating Japan in the Pacific, contributed about proper role of government across an array of issues half of all economic activity in the world. Despite that ranging from the economy to the environment, dominance, those in power in Washington did not religion, security, and the rights of individuals. seek to crush the countries that had been defeated Debates over moral boundaries—to whom is or greatly weakened in the war, nor did they turn owed what—will become more pronounced, while inwards to focus only on U.S. welfare. Instead, at divergence in values and interests among states Bretton Woods and at San Francisco, a generation will threaten international security.” of American, European and other statesmen and women created the International Monetary Fund, “It will be tempting to impose order on this the International bank for Reconstruction and apparent chaos, but that ultimately would be too Development (later the World Bank), and the United costly in the short run and would fail in the long. Nations - the pillars of the international order which, Dominating empowered, proliferating actors in with the General Agreement on Tariffs and Trade (later multiple domains would require unacceptable the World Trade Organization) enabled the surge of resources in an era of slow growth, fiscal limits, prosperity that characterized the second half of the and debt burdens. Doing so domestically would be 20th century, and led to the implosion of the Warsaw the end of democracy, resulting in authoritarianism Pact and the Soviet Union between 1989 and 1991. In or instability or both. Although material strength will the Marshall Plan, adopted 70 years ago this year, the remain essential to geopolitical and state power, United States gave over $13 billion (approximately the most powerful actors of the future will draw $132 billion in value today) in economic support, on networks, relationships, and information to to help rebuild devastated Western European compete and cooperate. This is the lesson of great economies after the war. Out of war-torn Europe grew power politics in the 1900s, even if those powers the European Union; out of the horrors of Hiroshima had to learn and relearn it.” and Nagasaki emerged the phoenix of modern Japan, 83 84 Working Papers a complex system that cannot becollectively controlled. (Parens andBar-Yam (2017)Itisacore systemsand social we have created, cannot comprehensively. bemanaged Human society is The complexity of the adaptive ecosystem in which we are embedded,and the global economic polity, may make this inevitable. a commensurate, inclusiveglobal community, and the defective state (or absence) of aglobal state. The sharp asymmetry between anddepththe scale of the globaleconomy, ofthe absence are invariant, but the system spontaneously changes from asymmetrical, to anasymmetrical, defined states.In that form known asspontaneous symmetry breaking, the underlyinglaws complex system transitions from asymmetric butill-definedstate,into oneor more clearly- But the Rand Corporation authors,like others, warn of impendingchange: the world. which, for several decadesuntil it was overtaken by China, was largest economythe second in We may be facing what physicists calla portrait as stable. …couldbestbedescribed with accelerating signsof disruption.” ofsense …aninflection point in the character of the international order. The overall [Trump’s] inauguration.” have beendelayed. .But they will accelerate andimpacteachother after soon looks dormant for the moment inmany because countries, alot of decisions strength. Henry Kissinger recently remarked, “We are point. atahinge The world of crisis… The postwar order isimperiled,butitretains many powerful sources of “Yet our analysis suggests also that it would be wrong to exaggerate the degree implications.” and challenges…, from below, in…populistoutrage atitseconomicandsocial Trump was electedU.S. President… from above,in the form of the geopolitical control globalorder. … the postwar order was already under significant strain before cultures under siege to create growing resentment aperceived against out-of- developed world. …Stagnating economicprospects combine of with asense globalizing order significantly, hasrisen especially in the working of classes the “At the same time, the degree of frustration with the costsandpressures of a making ahard-edged critiqueof the order’s perceived inequities.” its currency to the International Monetary Fund’s Special Drawing Rights list—and including contributing to the United Nations peacekeeping function andadding steadily increasing itsparticipationandinfluence in the order’s institutions— the Western-centric, neoliberal economicmodel.Most profoundly, Chinaisboth various issues,suchas the reform of international institutionsand the limitsof India, Turkey, Brazil, andother major powers are speaking upmore urgently about active democracy promotion, hasbecomeintense andhasled to outright conflict. Russia’s frustration with elements of the order, specifically Western alliancesand anticipated, and the pressures on the order are now more treacherous than ever. “…the degree of pressure for reform isaccelerating faster than mostobservers
iii Th[e Rand Corporations’s] analysis strongly supports the symmetry break break symmetry – apoint at which the working of a iv 2017 Imperial Springs International Forum · Final Report
component of the biosphere, a A Taxonomy for Action more complex, adaptive system (Chan 2001) with the potential To grapple with these challenges, we identified five elements of a Global for disastrous unintended Agenda: The first three are challenges whose management is essential consequences. The effects on for survival; the last two are enablers for success. societies of adaptive change in the biosphere were a source Challenges: of concern for millennia. Today aggregate human behaviour Delivering environmentally and socially sustainable is destabilizing the biosphere economic growth – for without this, nothing else is possible. (Steffen et al. 2015). Limiting the Reducing poverty and improving equity – because risks attendant on these systemic exceptional prosperity for the few at the expense of the many interactions is imperative, but the is neither morally justifiable nor politically sustainable. divergent perspectives of national Addressing the sources of global and national vulnerability, polities have led to clashes, and and promoting security – for security underpins both frustrate collective action. community and progress. 85 86 Working Papers It requires states to recognise acertain interests, nor identical societal values. This doesnot require coextensive national rules in their relations to oneanother.” themselves to beboundby of acommonset interests andcommon values .conceiv[ing] “. . . agroup of of states,conscious .common that aglobalsocietyobserved mustcomprise: ostracism.cases, Hedley Bull (1977, p.13) and,in criticism, sanctions, the mostserious actor by others, while flouting them results in system promotes acceptance of eachstate universally accepted norms within the global predict the responses of others. Deference to behaviour within agroup, allowing members to Adherence to normspromotes coherent to allow us to address challenges. these We needashared normative framework Essential enablers: enriches our understanding; our enriches appreciation of cultural diversity diversity cultural of appreciation – andglobalinstitutions governance Improving the quality of global allows us to live in harmony, while while harmony, in live to us allows otherwise be resolved. be otherwise differences – and working to respect cultural that enableglobalcoexistence, Sharing the normsand values core values and universal norms norms universal and values core a highly-connected world cannot cannot world highly-connected a for the important challenges of of challenges important the for because respect for for respect because and 1. 1. 2. 2. consumption. in which we are embedded. arein whichwe systems we havebuilt,and the ecosystems systemic risks mitigated, we need: If security is to beenhanced,and trade, transportation, anddistribution. despite reductions of physical production, requires new modelsof growth, we need: If respecting planetary boundaries essential in two criticalareas: A commonnormative framework is human welfare.deleteriousto without reference to ofthose others, canbe exclusive pursuitof their nationalinterests, recogniserequire thatthe states does that or states nationalinterests.to abnegate It not require nations to abandon their cultures, on occasion, for superior Itdoes purposes. that justifiessubordinating nationaldiscretion, quantum of commoninterests and values enhance security andsustainability.
social, economicand social, technological A better understandingof the complex on carbonemissionsandexcessive An ethos that legitimizes restraints we shall employ riskto mitigate and Broader agreement on the norms human progress andpoverty reduction, New development models that enable 2017 Imperial Springs International Forum · Final Report
Divergent perspectives We need a shared in a multipolar world normative framework A review of the positions of the U.S., Russia, China and India on the state of global governance in 2016, and to allow us to address an assessment of circumstances in Latin America, makes the diversity of perspectives clear. v these challenges. Adherence to norms • The United States sees itself as dominant in security terms, but isolated promotes coherent in international organizations, inhabiting a global institutional landscape that no longer behaviour within favours it; leading to domestic opposition to delegation of authority to supranational a group, allowing institutions (Voeten 2016). members to predict the • The Russian government dislikes the responses of others current world order but has offered no alternative structure or blueprint for reform, – although some policy institutions advocate a bipolar model, founded on the U.S. and • India is constrained by its domestic China, with Russia partnering China to developmental imperatives and its continuing counterbalance the West, to promote stability nation- and state-building priorities, but aspires and better understanding between the camps to continuing rapid growth, national consolidation in an interdependent world, with better global and social development. As a political child of the governance (Kulik and Yurgens 2016). European Enlightenment, it respects a world order premised on the rule of law and human rights, but • China sees the need for an open, inclusive seeks greater representation in global institutions, and multipolar world, defined by innovative and an ability to affect outcomes. While focused policies reflecting the interconnectedness on securing its national interests, it will advance and complementarity of states at different prudently by balancing its needs and objectives stages of development. The global financial (Mehta and Raghan 2016). crisis has convinced it that the West’s mode of economic development will not deliver the • Latin America still comprises divided societies structural economic transformation needed whose social characteristics predispose them to for sustainable development, and persuaded divergent policies prioritising economic orthodoxy it that its own growth experience since 1979, on the one hand, and populist, heterodox efforts to the scale of its foreign exchange reserves, reduce inequality and expand opportunity for the and its investment in complementary underprivileged on the other. Its regional organizations international financial institutions like the New have not bridged this policy divide, but birthed a Development Bank and the Asia Infrastructure new group of partisan institutions committed to Investment Bank, and transnational coordinating these divergent paths. Institutional development programs, like the Belt and Road deepening and growing political maturity will (OBOR) Initiative, permit it to advance a new overcome these divides, but the continental institutions mode of sustainable economic development cannot yet help define shape global outcomes through the G20 (Wen 2016). meaningfully (Blumenschein and Navarro 2016). 87 88 Working Papers abilitylead. to authority to hascompromisedthese, its and domesticopposition ofto delegation of ininternational isolation organizations the European Union. Washington’s sense by the North Atlantic Treaty Organization and Woods andSanFrancisco, anddeveloped of the world order establishedatBretton as preserving, far aspossible, the parameters powers, committed conservative to The U.S. (and the European Union) are governance, enhancing governance, the representation (2) potential of the world economy; new opportunities,and improving the growth advancing reforms andinnovations,grasping (1) innovating the growth pattern,emphatically and inclusive world by: economy, an innovative,invigorated, interconnected, 11th G20Summit in2016 would be to build organisingfor theme announced thatthe the on November 15–16, 2015,President Xi Jinping interesting alternative. At the 10thG20Summit on anopenandinclusive world, offers an presidency of the G20in2016,premised China’s proposal, outlinedduringBeijing’s a viable Global Strategy. a Common Foreign andSecurity Policy into tensions, make it very difficult to translate multinational character and fissiparous of the European Union, due to its improving globaleconomic and financial vi The relativeweakness The 1. 1. 2. 2. nationalism on (Blyth 2016).the rise liberalism isinretreat in the West, with neo- – will frustrate it(TheEconomist 2017).Neo- pressures andperceived threats to identity forces emerging from economic andsocial elites in capitals–and ofthese the populist the cultural andpoliticalpreferences of the powers. While acommon vision isneeded, emerge among soon the world’s leading The diversity of positionssuggests these that: details of Beijing’s project are stillunclear. and South Africa – will oppose this, but the other BRICS members –Brazil, Russia, India, and realize mutualdevelopment. None of the for Sustainable Development, eradicate poverty, 2030 implementdevelopment,Agenda the to (4) growth; and and investment, andusing this to promote economy, promoting international trade (3) economy’s capability risk; to manage developing countries, andboosting the global and voice of emerging markets and and anger, exacerbated by the accelerating inequalitytensions, anddomestic social advancing inclusive and interconnected advancinginclusiveandinterconnected constructinganopen-ended world principles of a future globalorder will No overarching concept of the desirable geo-economic trends, geopolitical geopolitical trends,geo-economic The interplay between long-range 2017 Imperial Springs International Forum · Final Report
One cannot reach agreement on all issues at a global scale, so we must determine at what scales collective agreement on particular outcomes is feasible –
technological transformation of work and education, asymmetry between the scale and depth of the is fracturing national societies and weakening global economy, society and polity, we must, to avert representative democracy (Cleary 2015). The further deterioration, rebalance at several scales. nationalistic, nativist stance that emerged in the U.S. Established structures and systems need radical in 2016 is familiar in Russia and Turkey, evident in reform, including institutions of global governance, Latin America, Africa, the Arab region and South Asia, regional governance, regional security, and national and rising in Western and Eastern Europe. political governance, “free markets” as we have defined them in the past 25 years, the relationship Our failure to deal adequately with this is between education, training and employment; and 3. dangerous. We need to address the sources of systems of social coexistence shaped by rapid acute inequality; restore possibilities for upward urbanization followed by globalization, that are now mobility; provide social safety nets for those who under stress in many advanced economies. cannot be reskilled and accommodated in labour markets; invest in the transformation of education One cannot reach agreement on all issues at a and skills training to enable horizontal mobility global scale (Rodrik 2011), so we must determine and lifelong learning; and build social capital and at what scales collective agreement on particular cohesion to enable burden-sharing. outcomes is feasible. To apply and enforce norms, we need to select appropriate scales. Too narrow a Preoccupation with the need to respond to these scale – limiting normative and legal frameworks 4. domestic imperatives, makes collaboration on to culturally homogenous communities – enables “common goods”, and coordinated responses to widespread acceptance, but leaves issues of the terrorism, violent extremism and organized crime commons unresolved, posing high risk. Assuming more difficult. The contraction of international trade that the preferred norms of any community are regimes, if unchecked, will dislocate global value universal, and can be applied globally, has already chains, slow growth, and increase geopolitical stress. proven counterproductive. This challenge is global, and the G20, and the United Nations, must address it urgently. The proper scale is a function of the communality, or diversity, of the interests at stake; and the variety of Creating a new order the communal values on which an agreed solution can be founded. While coercion has often been used To do this, however, we need to restore a sense of “. to impose outcomes on communities in history . . common interests and common values . . . [and it is unsuited to a highly-connected and largely acceptance of] a common set of rules in [states’] transparent world. While force is, and will be, used relations to one another” (Bull, 1977, p. 13). to punish those that pose threats to communities, this can only be done to those on the margins of This will not be easy. Efforts to create new, national, regional or global societies, if comity is comprehensive politico-economic orders usually to be maintained. For acceptable levels of social follow major wars. Faced with the multivariate stability, the great majority of actors must accept the
89 90 Working Papers the United Nations Framework Convention on But, the negotiations in the COP 21round of alternative, ‘complementary’ organizations. the World Bank Group, ledChina to launch of the International Monetary Fund and to the voting rights andquotas of members Delays ratification in securing of changes substantive results (United Nations 2004). in2004,led andChange Challenges to no United Nations High-levelPanel on Threats, The recommendations onreform by the the Doha Round. Organization has frustrated the conclusionof requirement of in consensus the World Trade exercised frequently over seventy years. The Security Council haveled to vetoes being between permanent membersof the UN On disagreementsthe globalscale, the normsitapplies. moral values that underpin the society, and committed, they constructively. engaged contributions to determinedwhich they the byimposed others. As stateparties economic development –not by obligations enabling atmospheric warming, while averting the disastrous effects of excessive were informed by commoninterests – National efforts before the COP21 in Paris could do to achievemutualbenefit. their development paths, to focus on what all due obligations to the carbonintensity of and advancedeconomiesabout their to transcend arguments between emerging obligations to contributions enabledstates recalibrationfrom tactical emissions. The strengthen in future, while reporting on their which statescommitted to execute, and to nationally determined contributions at the Earth Summit in1992, to credible, differentiatedresponsibilities, formalized facilitated by ashift from commonbut led Climate Change, to the Paris Agreement, 2017 Imperial Springs International Forum · Final Report
Likewise, the adoption of seventeen Sustainable the need for a new world order that maintains the Development Goals (SDGs) to end poverty, fight best of the past, and addresses the needs of the inequality and tackle climate change in the 2030 present and the future. Agenda in September 2015, was a substantial achievement. Like the national contributions to The UN General Assembly should adopt a framing which states committed in the Paris Agreement, the resolution calling for inclusive national dialogues SDGs are not legally binding, though governments involving government, other policy practitioners, will establish national instruments to enable business, labour, women and youth, and other key their achievement. States are responsible for components of civil society including faith groups, implementing them, and for collecting national to develop proposals for a desirable global order data, to feed into regional reviews, for global in 2030 that reflect the perspectives and interests consolidation. of each national society, without explicit reference to present structures or systems. The topics of The success of these bottom-up approaches the Global Agenda – balancing environmental accords with research commissioned by sustainability with equitable socio-economic FutureWorld Foundation into national perspectives advancement, and human, national and global on environmental sustainability; socioeconomic security – can provide a frame of reference. Agenda equity; human, national, regional and global 2030 and the Paris Agreement can serve as building security; and norms and cultural values. vii That blocks. research suggests that a triadic structure of governance will likely be most effective, keeping The aim is to reach agreement on an end state, and most responsibility for decision-making at national specific outcomes, before discussing the means to levels, and consolidating at regional and global achieve them. National and regional consultations, levels only the most urgent and systemically vital like those that led to the SDGs, would spark national issues. This would involve our: debates, allow reciprocal learning, help dispose of prejudice, and undercut dangerous fact-free addressing key global public goods (climate, populism. The discussions should clarify the values oceans, biodiversity and related planetary that motivate each state’s objectives, and shed boundaries) and behaviour threatening a light on the norms and legal instruments that can tragedy of the commons, with supranational advance them. systems, capitalising on individual national commitments within a shared framework; After receipt and analysis of the national, and facilitating cooperation and harmonization perhaps, regional contributions, a UN General of rules on human rights, trade, financial Assembly Open Working Group akin to that flows and security through international assembled for Agenda 2030, should reflect on, and conventions and treaties, whose premises are discuss the proposals, with the assistance of a negotiated and agreed on a basis of shared synthesis paper prepared by the UN Secretariat. responsibility; and encouraging commitments to common The values that have shaped the success of the objectives in other areas of collective benefit world since 1945 are still highly relevant, even if we without creating institutions to control or need to revisit the structures and systems created enforce compliance. after that war. We must advance those values vigorously, even as the world changes, and new To achieve this, we need to acknowledge powers rise, requiring adaptation. Failure to engage the urgency of the challenge, and call for an proactively in shaping a new order, fit for purpose international conference under UN auspices to in a new time, risks consigning is to increasing address it effectively. The initiative would recognise instability and eventual crisis. 91 92 Working Papers ii i Willcox, Rand Corporation, 2017-https://www.rand.org/pubs/research_reports/RR1994.html Miranda Priebe, Andrew Radin, Kathleen Reedy, ,Alexander D. Rothenberg, Julia A. Thompson, Jordan Measuring the Health of the Liberal International Order, Michael J. Mazarr, Astrid Stuth Cevallos, Security normsandinstitutions Economic normsandinstitutions Foundational normsandinstitutions the Non Proliferation of Nuclear Weapons; treaties andorganizations (e.g. Treaty on • related norms legal •International law of armedconflict and Charter andregional institutionalcharters nonaggression embodiedin the U.N. • The fundamental security normof trade. addressing economicdevelopment and • OECD andother informal organizations instruments • BISandcentral bank coordination Group of 77, BRICS) • Semi-formal (e.g., associations G-7, G-20, Commissions • UNDP U.N. [regional] Economic Shanghai Cooperation Organization Infrastructure Investment Bank; OBOR; • New [BRICS] Development Bank, Asia Mercosur/l;APEC; Pacific Alliance;AU) • Regional trade institutions(EU;NAFTA; systems, dispute-resolution mechanisms • GATT/WTO treaties, andregulatory legal Development Bank, etc.) African Development Bank, European (e.g., World Bank, Asian Development Bank, • Global andregional development banks • International Monetary Fund people movement capital, of services, goods, • The neoliberal economicnormof free • The U.N. system principle) of nationalsovereignty • Thenorm(and andinstitutional legal Arms control andnon-proliferation EndNotes [liberal] values andcollectivegoods Norms andinstitutionspromoting common U.N. FAO; UNESCO; ICAO; UNCLOS; IMO) collective policy areas (e.g. ITU;UPU;ILO; • Organizations coordinating functional UNICEF) Health Organization, World Food Program, for healthand services welfare (e.g., World • Organizations policy setting andproviding Commission; Agenda 2030–SDGs) Parties –Paris Agreement; Global Ocean environment ofconventionsand treaties for the andnormative • Thelegal framework Court; European Court of Justice; Interpol) Human Rights etc.; International Criminal human rights Declaration (Universal on andnormative • Thelegal framework for Office for Disaster Risk Reduction) Security andCo-operation inEurope; U.N. other security issues(e.g., Organization for arms reduction, peacebuilding,and • Intergovernmentalorganizations for Regional Forum, African Union) security institutions(EUCFSP, ASEAN partnerships with other states;regional New Zealand, and Thailand; andsecurity with Japan, the Republic of Korea, Australia, Organization andU. S.bilateral alliances (North• Security Atlantic alliances Treaty • U.N. Security Council confidence-building and similar instruments), transparency, and settlement of(peace disputes treaties • Initiative) Suppliers Group, Proliferation Security Technology Control Regime, Nuclear Conference onDisarmament, Missile Multilateral andbilateral treaties of pacific (e.g. UNCongress of 2017 Imperial Springs International Forum · Final Report
iii Quoted in Jeffrey Goldberg, “World Chaos vi Measuring the Health of the Liberal International and World Order: Conversations with Henry Order, pp. 20-22 Two requirements asserted Kissinger,” Atlantic, November 10, 2016. by the authors (“The tone and character of U.S. leadership will have to change to sustain the iv Measuring the Health of the Liberal current order” and “The United States must International Order, p. xv develop concepts for a more shared and seemingly equitable order.”) are at odds with the v http://www.g20-insights.org/policy_briefs/ approach taken by the present Administration. reconceptualising-transnational-governance- making-global-institutionsfit-purpose/ – tab vii https://www.futureworldfoundation.org/Home/ ‘Analysis and Data’ Default.aspx – tab Our Perspectives
References
Bershidsky, L. (2015). IMF Reform Is Too Little, Way Too Late. Bloomberg View, Opinion/Economy (December 18). https:// www.bloomberg.com/view/articles/2015-12-18/imf-reform-is-too-littleway-too-late Blumenschein, F., and Navarro, D. (2016). Macroeconomics of Populism in Latin America and Regional Governance Dynamics. The Future World Foundation. https://www.futureworldfoundation.org/Content/Article.aspx?ArticleID=22155 Blyth, M. (2016). Global Trumpism: Why Trump’s Victory Was 30 Years in the Making and Why It Won’t Stop Here. Foreign Affairs, November 15. https://www.foreignaffairs.com/articles/2016-11-15/global-trumpism?cid=soc-fb-rdr Bowles, S., and Gintis, H. (2003). Origins of Human Cooperation, Genetic and Cultural Evolution of Cooperation. In: Peter Hammerstein (ed.), Genetic and Cultural Evolution of Cooperation, Cambridge: MIT Press. Bull, H. (1977). The Anarchical Society: A Study of Order in World Politics. Columbia University Press. Chan, S. (2001). Complex Adaptive Systems. Research Seminar in Engineering Systems. November. http://web.mit.edu/ esd.83/www/notebook/Complex%20Adaptive%20Systems.pdf Checkel, J.T. (1997). International Norms and Domestic Politics: Bridging the Rationalist-Constructivist Divide, European Journal of International Relations 3(4): 473–495. http://journals.sagepub.com/doi/abs/10.1177/1354066197003004003 Cleary, S. (2015). Challenges of Global Complexity. The Future World Foundation. https://www.researchgate.net/publication/272427075_Challenges_of_Global_Complexity_- _ httpswwwfutureworldfoundationorg ContentArticleaspxArticleID9868 Cleary, S. (2016). Identity Politics, Sectarian Conflict and Regional Political Rivalry in the Middle East. Conference Paper, Trilogue Salzburg 2016, At Mozarteum, Salzburg. https://www.researchgate.net/ publication/306439116_Identity_Politics_Sectarian_Conflict_and_Regional_Political_Rivalry_in_the_Middle_ East?ev=prf_high The Economist (2017). Trump’s World. The New Nationalism. November 19. http://www.economist.com/news/ leaders/21710249-his-call-put-america-first-donald-trump-latestrecruit-dangerous Kulik S., and Yurgens, I. (2016). Global Governance in Russia; Coming in from the Cold. The FutureWorld Foundation. https://www.futureworldfoundation.org/Content/Article.aspx?ArticleID=22151 Mehta, P.B., Raghan, S. (2016). India and the Evolving Global Architecture. The Future World Foundation. https://www. futureworldfoundation.org/Content/Article.aspx?ArticleID=22152 Parens, R., and Yaneer Bar-Yam, Y. (2017). Six-year Report on the Arab Spring. New England Complex Systems Institute (February 24). http://www.necsi.edu/research/social/arabspring.html Rodrik, D. (2011). The Globalization Paradox: Democracy and the Future of the World Economy. WW Norton and Company. Steffen, W., Richardson, K., Rockström, J., Cornell, S.E., Fetzer, I., Bennett, E.M., Biggs, R, Carpenter, S.R., de Vries, W., de Wit, C.A., Folke, C., Gerten, D., Heinke, J., Mace, G.M., Persson, L.M., Ramanathan, V., Reyers, B., Sörlin, S. (2015). Developments in the Planetary Boundaries Concept Provide a Framework to Support Global Sustainability. Science 347(6223). http://science.sciencemag.org/content/347/6223/1259855 United Nations (2004). A More Secure World: Our Shared Responsibility. Report of the High-level Panel on Threats, Challenges and Change. http://www.un.org/en/peacebuilding/pdf/historical/hlp_more_secure_world.pdf . Voeten, E., and Krogh, P.F. (2016). Reconceptualising Transnational Governance: The US Perspective. The Future World Foundation. https://www.futureworldfoundation.org/Content/Article.aspx?ArticleID=22153 Wen, W. (2016). China’s Evolving Global Economic Governance Role. The Future World Foundation. https://www. futureworldfoundation.org/Content/Article.aspx?ArticleID=22154 93 94 Annexes Spr on Imper backgr0und ings i al 2017 Imperial Springs International Forum · Final Report
Inaugurated in August 2011, Imperial Springs International Forum was officially established in 2015 with the approval of the Chinese government. It is currently co-hosted by the Chinese Peo- ple’s Association for Friendship with Foreign Countries (CPAFFC) and the Australia China Friend- ship and Exchange Association (ACFEA).
eld in the beautiful Imperial Springs and Cultural Forum, the Australia–China Media International Convention Center in Forum, the Global Economic Forum, the Global H Conghua, Guangzhou, the forum Leadership Summit of SME Leaders, the Going serves as an important platform for people-to- to Latin America Forum, and the 2014 China– people diplomacy and international exchange. Australia Economic Forum. More than 300 It aims to enhance understanding and expand international dignitaries, including former U.S. consensus among parties through discussions President Bill Clinton, former Australian Prime on important topics in the economy, politics and Minister John Howard, business leaders, scholars culture, thereby facilitating regional and global and celebrities have participated in these events. cooperation. Under the theme “Inclusive, Sustainable and As an ideal environment for high-level forums, Resilient Cities in the Belt and Road Initiative” the Imperial Springs International Convention the 2016 Imperial Springs International Forum Center has hosted a number of important explored the potential global impact of the Belt international conferences since 2011, including and Road Initiative and how investments in cities the Australia–China Friendship Forum on along its way can foster efficient, inclusive and Economy and Trade, the International Museum sustainable urbanization models. 95 Forum organizers
96 2017 Imperial Springs International Forum · Final Report
organizers
The World Leadership Alliance-Club de Madrid – is a non-profit international organization and the world´s largest, independent group of democratic, political leaders, committed to addressing the challenges of good governance and effective leadership. The principal added value of the WLA-CdM is a membership of more than 100 former Presidents and Prime Ministers, from more than 70 countries, willing and able to share their diverse leadership experience, expertise, and networks with governments, inter-governmental organizations, civil society, scholars and the business world, building bridges between them and current leaders and policy makers and encouraging dialogue to foster social and political change towards inclusive and peaceful societies.
The Chinese People’s Association for Friendship with Foreign Countries (CPAFFC) – is a national people’s organization engaged in people-to-people diplomacy of the People’s Republic of China. The aims of the Association are to enhance people’s friendship, further international cooperation, safeguard world peace and promote common development. On behalf of the Chinese people, it makes friends and deepens friendship in the international community and various countries around the world, lays and expands the social basis of friendly relations between China and other countries, and works for the cause of human progress and solidarity. It implements China’s independent foreign policy of peace, observing the Five Principles of Peaceful Coexistence, while carrying out all-directional, multi-level and broad-area people-to-people friendship work.
The Australia and China Friendship Association (ACFEA) – was registered in September 2005 in the NSW Australia as a non-for-profit institution. The president of the association is Dr. Chau Chak Wing, a prestigious leader in the Chinese community of Australia. Its Advisory Board consists of members who are interested in the promotion of people- to-people contact between Australia and China. Since its establishment, the ACFEA has been committed to the promotion of friendly exchanges between Australia and China in the areas of trade and economy, culture, education, the arts and science while organizing high-profile bilateral dialogues or events. The ACFEA headquarters in Sydney Australia with representative offices located in Beijing, Guangzhou and Hong Kong.
co-organizers
Pantone 7550C