YORIKO KAWAGUCHI Yoriko Kawaguchi is a former Japanese diplomat and politician. Her various appointments include that of Special Advisor to the Prime Minister on Foreign Affairs (2004-2005), Minister for Foreign Affairs (2002-2004) and Minister for Environment (2000-2002). She also served as a Member of the House of Councilors for the Liberal Democratic Party from 2005 to 2013, and as an economist at the World Bank. She is currently Professor at the Meiji Institute for Global Affairs in . On July 2008, she was appointed Co-chair of a new International Commission on Nuclear Non-proliferation and Disarmament.

24 Global Challenges Quarterly Report 2017 1.2. INTERNATIONAL GOVERNANCE: BALANCING INCLUSION AND EFFICIENCY

1.2. International governance: balancing inclusion and efficiency

Yoriko Kawaguchi, Fellow, Meiji Institute for Global Affairs, Meiji University; former Minister for Foreign Affairs, Minister of the Environment, and Member of the House of Councilors, .

Our current system of global governance has had remarkable achievements over the past 70 years, but in light of new challenges, it is showing a number of limitations. With 193 UN countries holding a legitimate aspiration to be part of global decision-making, what is the best way to balance fairness and effectiveness in global governance? An important element will be the capacity to balance inclusive structures where all voices can be heard with smaller bodies – such the G20 or the – where participation is more limited, but more effective decisions can be made.

Global Challenges Quarterly Report 2017 25 In the face of pressing global threats, what is the best way to achieve a right balance between inclusion and efficiency?

26 Global Challenges Quarterly Report 2017 1.2. INTERNATIONAL GOVERNANCE: BALANCING INCLUSION AND EFFICIENCY

he UN Security Council’s domestic governance system in many resolutions have not countries. In the international setting T succeeded to stop North as well, a democratic governance Korea’s nuclear program. All over order is called for. But what would be the world, refugees have increased, a desirable democratic order when reaching 65 million, of which half countries differ in their security, are children. The Doha round has economic, political and other stalled, resulting in the proliferation capabilities, and so many different of bilateral and regional Free Trade countries need to come together? In Agreements, less efficient than a the face of pressing global threats, multilateral agreement. what is the best way to achieve a Obviously, our international right balance between inclusion and governance order needs mending, efficiency? despite a decent track record. There has not been any worldwide war An important element to consider for the past 70 years, and the post- is the cost of maintaining good war liberal international economic international governance, and who system brought about unprecedented should bear this cost. The UN’s prosperity, raising the income level Peacekeeping Operations need to be of many developing countries, financed and staffed. The same is true including and India. But with the World Trade Organization. the international community has Good international governance is an outgrown its present governance international public good which, by system, partly due to its very success. definition, tolerates free-riders. If all It is now facing new challenges: the countries free-ride, the system cannot international community has become survive. Worse still, costs have risen more interdependent, new risks are as risks have increased. global in scale, and with progress in For over 70 years after the Second transportation and communication World War, the U.S. bore the largest technologies, risks could spread burden, with contributions from almost instantaneously. other developed countries. Now, circumstances have changed As countries develop, it is natural greatly, and the U.S. has relatively that they aspire to play a part in rule- declined. With this power-shift, the making and have their views reflected responsibility for cost-bearing should in the global governance order. But be shared more broadly by countries the number of UN member countries aspiring to a greater voice in the has increased from 51 to 193 since international decision making. foundation, and this increase brings Fortunately, real world examples new challenges. demonstrate that this has been Democracy is a widely accepted taking place. For example, the Paris

Global Challenges Quarterly Report 2017 27 Climate Agreement stipulated that The G20 is a good example. The responsibility to reduce greenhouse G20, at the summit level, met for the gas emissions - and thus cost sharing first time in 2008, following the global - applies to developing countries financial crisis, to respond and build on the principle of equal but a resilient international community. differentiated responsibilities. Participating countries together represent about 2/3 of the world’s Beyond the question of cost sharing, population, 90% of its GDP, and 80% a good international governance of trade. The 12 summit meetings system needs to be efficient as well, since then have helped leaders because time could be a vital factor understand each other‘s thinking, in dealing with risks. This means, the given guidance on global problems system needs to be both representative and agreed on important action plans, and functional. One potential model some of them with target dates. The would combine a broad structure Hamburg Summit in 2017 covered a where all nations participate, and wide variety of issues, including trade smaller structures allowing certain and investment, excess capacities countries to play a larger role in in the iron and steel industry, global decision-making, but with greater financial systems, climate change responsibility for cost bearing. Various and Africa. Now, major decisions structures already play this second pertaining to world problems must be role. endorsed by the G20 to be viable.

28 Global Challenges Quarterly Report 2017 The G20 is an improvement over the influenced governments and business G7 in terms of inclusiveness. However, to act on clean water supply. work is still needed to create a sense Partnership between governments of joint responsibility and, perhaps, and business will be more important develop agreed principles for action, in the years to come, because risks so that the G20 can be more effective will become more complex, with and action-oriented. This was the case more serious implications on our with the G7, which agreed and acted interconnected world. Governments, on the decommissioning of the former many of which are under serious Soviet nuclear submarines after the financial constraints, cannot demise of the Soviet Union. deal with those singlehandedly. Another exemplary vehicle is Partnership with local governments the World Economic Forum. This and citizens’ groups should also be is a forum for political, business, strengthened for the same reasons. academic and other thought leaders from around the world. It functions The objectives of an international as an incubator for creative thoughts governance system are to achieve and initiatives for actions to orient peace, stability, and prosperity. The governments and business. For most important underlying factor for example, an initiative for water was this is the willingness of the nations created at Davos by the leadership of and peoples to honor governance some international companies, and rules.

Global Challenges Quarterly Report 2017 29