Who is running the world?

A NEED FOR CHANGE

THE EMERGENCE of new superstates and rising countries is a growing threat to the pre-eminence of post-war global institutions. But, who is running the world?

Powerful countries not only tend to write history but they seize the seats at the top tables, from the Security Council of the United Nations to the boardrooms of the big international conglomerates and financial institutions. Collusion and nepotism are often common traits and they decide, behind the secrecy of closed doors, who is permitted in joining their comfortable fraternity. It is done in the expectation that the rest of the world will obey the instructions being handed down.

This is the very perception, that outsiders – not just in the poor developing world – have seen the G8 summit just finished in Japan, which ran from the 7^th to the 9^th July. This is the closest the world currently has to an informal and self-appointed steering group. The leaders of the world’s seven richest democracies, plus oil wealthy Russia, gathered in Hokkaido (northern Japan) in ruminating on climate change, rising food and energy prices, and how best to tackle global scourges from widespread disease to the proliferation of nuclear arms.

In an age and era, though, when people, money and goods move around the globe as never before, G8 no longer commands the dominion of the global economy and the world’s financial system as the core G7 used to do when their small, purposeful meetings first got going in the 1970s. Then, it was to do with the consenting capitalists of the democratic world. Today, global summits produce lengthy communiqués and media photo-opportunities. Despite Russia’s front, its slide from democracy into state-sponsored capitalism has diluted the political tone.

G8 knows it has to change. The inferences have been around for a while now, as they were in Germany last year, with leaders from five “outreach countries” – Brazil, China, India Mexico and South Africa – invited for political discussion. The old world order needs new ideas in adapting to what the world is now faced with.

Commonly held perceptions are that a gathering of just 8 countries is not enough in how global policies are formulated. Might the world be better managed through a G13, G15 or G16 by including representatives of Islamic states, too? Or, in preserving the group’s initial steering purpose, by a G12 of the world’s biggest economies? In the meantime, global institutions that were set up after the end of WWII have to look hard at their own futures. Whereas the G8 takes on a bit of everything, these other institutions fundamentally divide into two types: economic and financial, and political.

At the apex of global political management, but looking more antiquated and increasingly anachronistic, is the United Nations Security Council. Five permanent members, who wield vetoes – The US, Russia, China, Britain and France – in general terms, are the victors of the last long-ago world war. Ten other members rotate at the whim of the various UN regional groupings. The United Nations is presided over by a Secretary-General, currently Ban Ki-Moon from South Korea. Moreover, though, the UN is a vast bureaucracy, splintering into hundreds of specialised agencies with various differing remits and spheres of activity: an attempt was made, too, in saving the world not just from another war, but from a repeat of the Great Depression of the 1930s. That job was granted to another plethora of institutions such as the World Bank and the International Monetary Fund (IMF) (known jointly as the ‘Bretton Woods’ institutions after its place of origin) the Organisation for Economic Co-operation and Development (OECD), a rich country think-tank set up in 1961 and, others, like the World Trade Organisation (WTO) formerly known as GATT.

Most global institutions, if not all, have at some stage in the recent past been buttressed by conventions, court declarations, mandates and the changing terms of treaties governing almost every aspect of what affects its people and the world – from human rights to the environment.

The whole elaborate and intricate architecture of so many world governing bodies has, too, had extra underpinning from strong and powerful regional organisations, such as the European Union, and less elaborate ones like the African Union (AU) or the various talking-shops of Latin America, the Arab and Asian world, as well as under-pressure alliances such as NATO. Beneficially, such a numerous spray of institutions avoided any repeat of the disastrous global conflicts that the world experienced in the first half of the 20^th century.

Yet, that epitome of success has become a powerful pressure, amongst others, to adjust the way in which the world is now run, as economic winners demand a greater say.

 

OTHER PRESSURES

PRESSURE FOR CHANGE has also stemmed from intensifying resentment, antipathy and frustration. Despite a whole realm of ringing declarations on human rights against genocide and crimes against humanity, and even after the promises pledged by the UN summit in 2005 in having a “responsibility to protect”, the United Nations Security Council still finds itself unable to acquiesce in doing much to protect the innocent people of Darfur, Zimbabwe and Myanmar from the murderous and brutal contempt of their rulers – just as in the 1990s when the UN failed the innocent victims of genocide capitulated in Rwanda.

Philosophically, if the Security Council commissioned with such high principles shows such weakness in the face of tyrants and despots – or by showing scant regard to those who flagrantly flout nuclear treaties, for instance – doesn’t such an organisation deserve to be bypassed? As mentioned recently, on Mark Dowe’s wordpress, John McCain, the Republican candidate for President of the United States, is a keen proponent in the creation of a new ‘League of Democracies’ which, given the level of support such a league would have, would not only acquire moral legitimacy but also having the will to effectively right the world’s wrongs, as and when it might be needed.

Another impetus and thrust in rejigging the way the modern world organises itself is a dawning realisation on the parts of national governments, both rich and poor. The biggest challenges shaping their futures – climate change, the forces of globalisation, resource scarcity, state failures, terrorism and the proliferation of weapons of mass destruction – often need global, not just national or regional solutions. The shifting of economic power, in this the 21^st century is justification enough in rebalancing influence and how decisions should be arrived at.

After decades of separating the world into the rich and powerful West and the developing (or emerging) ‘rest’, China’s rapid economic growth and dynamism of East Asia has led to the possibility of a new “Pacific” century well before the old “Atlantic” one has ended. Given present trends, it is reckoned that by 2030 three of the world’s four largest economies will be from Asia. China is expected to top the global league ahead of the United States. India and Japan remain determined in gaining permanent seats on the UN Security Council.

 

MULTIPOLAR

When for former Soviet Union collapsed, America’s dominance of the world was clear for all to see but, as Russia has recovered it has been joined by a rising and emerging powerful China and others such as Europe and Japan in a new assemblage of big powers that is based on far more than just old-rocket counts of the cold war. Introduce India, too, and you capture 54% of the global population and 70% of GDP. Such a ‘multipolar’ world cannot be ignored by those who continue to wrestle and hold onto power as if nothing has changed.

The effects of globalisation – the increasingly unfettered flow of information, technology, capital, services and people – have created a vast platform of opportunity and influence far and wide. In addition to the pace being set by both China and Russia, add not just India and Brazil but Mexico, South Africa, Saudi Arabia, South Korea and Australia, new world winners as money changes hands that has led to a faster turning world. 

A modern day map of power and influence should also include essential ingredients such as the Internet, a powerful transformational tool; manipulators from lobbying NGOs to the effects that ‘terrorism’ has had on the world; capitalist profit-takers such as those vast global conglomerates and corporations; and the unpredictable forces at work in the world such as global financial flows which due to their volatility can added significant risk to how eventual decisions are arrived at.

Dozens of influences and players, exercising different kinds of power, interact in a complex web that is vastly complicated in an effort to find a better balance of influence and responsibility. But, an excuse of ‘complexity’ is no answer to the demand for equity and fairness in a multipolar world. World bodies and institutions have to change and reform to reflect the ambitions and concerns of the world as it evolves in new directions.

China, itself, ignited afresh as it ditched Marxism, Lenin and Mao. Its reformers were able to tap the liberal rules-based system for new ideas codified in the rules of the IMF and World Bank. China rejoined the World Bank in 1980, just as its new reforms were seeking a new economic start. Paradoxically, Communist-run China has since been one of the system’s biggest beneficiaries. It is by no means the only one. Despite world stock-market volatility, dips and credit squeezes, world income per head has increased by more over the last five years than during any other similar period on record.

Practical institutions such as the IMF and the World Bank, have adapted, through fits and starts, which other world bodies should look upon in understanding how change can be made when it is needed. For example, just this year the IMF reformed the rather odd formula by which it allocates votes and financial contributions according to economic size and reserves. China’s share of votes will increase to 3.81%, but this still falls far short when considering its weight in the world economy. Problems are still inherent because the World Bank is run by an American, the IMF by a European – many still ask what the relevance is for either organisation to continue. The IMF, for example, was initially set-up to follow and track exchange rate movements, a remit that has now been surpassed. The IMF could better serve as a monitoring institution for world bodies in so many other ways.

Until the late 1990s the IMF, monitor of exchange rates and lender of last resort to struggling governments, had plenty of work. But, the tides have turned. Emerging economies, once the IMF’s chief clients and source of its earnings in repaid interest and loans, are these days aplenty with their own cash.

Earlier this year, too, the IMF Board voted to cut its staff and by agreeing to sell an eighth of its gold reserves, in expectation of future funding shortfalls. Again, with the IMF having no obvious role in coping with the aftermath of the recent banking and stock-market turbulence, its future role seems more relevant by acting in a fiduciary capacity as expert economic adviser.

There is a concern, though, that the world may still need a lender of last resort. Whilst critics think the IMF’s days should be numbered and its remaining reserves put to better use for economic development around the world, others muse that what is needed is a World Investment Organisation, which sets basic and fundamental rules whilst being able to track more efficiently the huge and complex movements of cash within hedge funds, sovereign wealth funds, banks and financial markets.

The World Bank, on the other hand, appears, even now, to have more of a certain future. But, it has to take stock just the same. Competition, for example, has stiffened from accessing private capital markets. Governments around the world that once needed the bank’s help for dams and major road building projects are earning substantial sums from the sale of their own raw materials. In Africa, for instance, the willingness of both China and India to spend liberally without strings attached in pursuit of oil and mineral extracts means that Sudan and countries within the Congo can take the bank’s cash without any conditions attached.

The World Bank still has a future in lending to unfashionable causes, or countries which donors simply neglect. Its future might well extend into providing global public goods such as funding energy infrastructure and climate-change projects.

 

REMAINING EQUAL

The World Trade Organisation (WTO), though relying on a representative alliance of states in forging deals, is an institution that belongs to all its members. During the Doha round of talks, for instance, both India and Brazil are very much central to proceedings. This is in stark contrast to how both the World Bank and the IMF are governed; both steered by their biggest stakeholders.

The premise of the WTO is based on egalitarianism, or social equality and classlessness. Such a basis, whilst having weaknesses, carries with it great strengths.

Beneficial, at least in legal terms, is the 60,000 pages of jurisprudence that govern the workings of the WTO dispute mechanism. The WTO ensures that members do not discriminate amongst each other – a deal which is extended to all of its members. Such an underpinning has certainly helped expand world trade. Russia is not part of the WTO, but that is its choice.

Conversely, those countries wishing to join by making application in becoming a member of the WTO must strike deals with each of the existing members – presently totalling 152. The ubiquitous nature of requiring consensus means that the Doha development rounds are often bogged down in disputes between developed and developing countries over complex, reciprocal cuts in agricultural subsidies and tariff barriers. Slow progress often results in bilateral and regional deals. Moreover, if the Doha round fails completely, the recriminations can run far and wide – threatening any attempts, for example, in gaining agreement between the developed and developing world on new mechanisms needed in dealing with the threats of climate change.

Contentiously, and most bitterly contested, is membership of the UN Security Council which has the right in deciding what constitutes a threat to world peace and security, and what it intends to do about it when such a threat arises. The UN’s other big decision-making institution, the General Assembly, is where the entire world can have its say, and does. Here, though, outsiders tend to make their resentments known: a group of mostly developing countries (known as the G77 – but comprising 130 members including China) tends to dominate Assembly gatherings by employing the filibuster tactic (delaying or preventing the passage of legislation by making long, irrelevant speeches).

Alleviating resentment and improving the effectiveness of the United Nations, particularly the Council’s authority, might be assuaged if America, Britain, France, Russia and China considered giving up their veto and, by inviting others in joining them as permanent members. When the P5 first took up the most powerful seats, the United Nations had just 51 members. Decades of decolonisation, the UN now has 192 countries as part of its membership. Obstacles preventing reform remains a serious hindrance.

The latest attempt in making reform of the UN came from a concerted effort by Brazil, Germany, India and Japan to join the council as permanent members. A combination of jealously, argumentative debates and stiff-arming thwarted any fruitful realisation of that from happening. African countries, for instance, argued which of their several aspirants should be eligible in joining the bid. Regional rivals lobbied in blocking the front-runners. China made it clear it would veto Japan; arguments between Argentina and Mexico; Pakistan making its weight felt; America, supporting only Japan.

Introducing new and additional permanent members would widen the regional balance. Undoubtedly, that would add authority and legitimacy to the decisions being made by the council. Diversity is required if the credibility of the United Nations Security Council is to be restored. Bringing in nuclear-armed India, along with soft-powered Japan, for instance, would bring a considerable degree of depth to the council.

For those who argue against enlargement of a more permanent and diverse council concerns are centred on the issue of how shared responsibility would be effective. For instance, once difficult outsiders gained a permanent footing under the table, would this top them from protecting bad elements, as South Africa has been doing with Zimbabwe. It would appear, in part, anyway, that such dissent is done merely in defying the permanent five.

And, prising the P5 from their permanent vetoes, too, might also have adverse effects. Wasn’t it dependable veto power that ensured vital interests were not overridden that kept both the US and Russia talking at the United Nations during the Cold War? Russia will hardly forget the mistake of the brief Soviet boycott that led to force being authorised in repelling North Korea at the start of Korean War in 1950. Would it ever be likely that China would show clear signs of self-effacement?

Staying at the table doesn’t guarantee agreement. The United Nations is an organisation of different states, and nations differ for reasons good and bad. President George W Bush went to war in Iraq without explicit backing from the Security Council; NATO went to war in ending ethnic cleansing in Kosovo, despite Russia’s almost certain right of veto had the issue been brought before the council. Whilst Bush’s usurping of the UN Security Council will probably go down in history as the event that severely weakened the council’s authority and standing, it is worth noting that, on many contentious issues, the council’s divisions have not prevented responsible stewardship elsewhere. A Security Council summit in 1992, for example, agreed that the proliferation of weapons of mass destruction was a “threat to peace and security” that should be dealt with forcibly if the need arises. In addition, after the terrorist attacks of 9/11, new Security Council resolutions were passed in curbing terrorists’ financing networks and by strictly controlling, with more diligence, the use of nuclear, biological and chemical weapons.

Over the past 15 years, there has been a huge increase in the numbers of ‘blue helmets’ deployed, currently around 100,000 soldiers and police in various political hotspots around the world. A presence that has helped in reducing the number of conflicts between warring states, as well as calming civil disorders from Bosnia to Haiti, from the African Congo to the Lebanon, and from Cambodia to the Sudan. An acceptance, by the UN, that has converged towards a political ‘responsibility to protect’. This has taken the council towards new territory and unchartered waters which, earlier this decade, it would never have contemplated even discussing. The creation, too, of an International Criminal Court (ICC) which is separate from the UN, but able to take referrals, ready and willing to prosecute the worst crimes.

Yet, despite these developments, continued wrangling and divisions among the permanent members have often slowed down deployment of UN peacekeepers where they are most needed, the war-torn provinces of Darfur a good example. With China and Russia being arch-defenders of the Westphalia principles (that state sovereignty trumps all), pessimists believe that neither country will ever seriously contemplate authorising a forceful intervention, even in ending genocide. The new UN Human Rights Council has yet to prove that it can bring brutal and tyrannical governments to account.

China, for years, has been reluctant in condemning Kim Jong Il’s North Korean nuclear proliferation and bomb testing, disapproving of the Security Council passing judgement on it.  Furthermore, despite the P5 plus Germany having worked together over the past three years by imposing a series of UN resolutions on the Iranian regime – in defiance of the NPT through its alleged nuclear work and testing – both Russia and China have, repeatedly, and doggedly, watered down each proposed resolution, virtually line by line.

 

Autonomy

Regardless of the push for reform, there will always be so much that the UN Security Council will never be able to do, irrespective of who holds the most influential seats on the council in the future. The Internet, for instance, is becoming a powerful and effective medium by which campaigners on human rights, as on other issues, are disseminating their messages around the world. China, too, whilst being stung by constant exposure over its policies in Sudan and Darfur, appointed a special envoy and has, to some extent, shifted ground on the urgency of providing a UN force, even though such a deployment is painfully slow.

In some instances, regional organisations are better equipped in dealing with the strain. The stabilising of borderlands throughout the EU has been helped both through enlargement of the Union, through additional members being admitted, and the strengthening of NATO through additional European troops and police throughout the Balkans. Russia might well protest, but the western frontier has never been more peaceful.

Africa is another good example in how self-determination and help (of their own problems) might be more effective than relying on decisions from the UN that might never materialise. African solutions to African problems, through the African Union, such as how it has been able to deploy troops in Sudan in dealing with a critical crisis should not be under-emphasised in the ability of the AU to act, when it is needed. Devolving some areas, whilst beneficial, other areas require caution such as security. The AU delegated the problem of what to do with Zimbabwe to a southern African group (SADC), who then left it to Thabo Mbeki, who refrained from acting. Zimbabwe, and the people of that torn land, are still awaiting relief. 

Other alliances are also opening-up. The Association of South-East Asian Nations (ASEAN), a well constructed regional forum has drawn in not only China, Japan and Korea, but the US, Russia and European countries. Diversity around the concept of ASEAN has led to other summits involving only regional rivals, such as the axis between China-Japan-Korea. A new East Asian Summit, too, excludes the US but incorporates India and Australia. Americans themselves naturally prefer in boosting the Asia-Pacific Economic Co-operation forum (APEC). Russia, China and their Central Asian neighbours have been instrumental in the founding of the Shanghai Co-operation Organisation, in part to counter Western influence in the region as NATO continues with its strategic objectives in Afghanistan.

Autonomous problem-solving groups, separate from the UN, come in various shapes and sizes in an attempt to resolve disputes; quartets such as those in existence in promoting Middle Eastern peace or in attempting to settle the future of Kosovo. Some 80-countries are part of the Proliferation Security Initiative, who exchanges information by blocking illegal shipments of nuclear or weapons building materials. Like the P5 + Germany talks on Iran, there are also six-party talks hosted by China on the future of North Korea, a consortium that includes America, South Korea, Japan and Russia, which, saliently, could yet evolve into a formal north-east Asian security forum.

China, India and Russia meet from time to time in a reaffirmation of multipolarity allegiance. They may have little more in common than an overriding eagerness in relegating Europe and America into the shade, but meetings between all economic and finance ministers will likely become a sign of how things are changing. With a wary eye on China’s growing economic and military weight, the US has formed additional pacts with Australia and Japan.

Idiosyncratic but recognisable world organisations includes those patchwork of institutions throughout the Commonwealth, territory that knits together former British colonies; the Non-Aligned Movement, a membership of 116 countries bound-over from the cold war that produces communiqués for the elimination of prejudice.

 

League of Democracies

The idea of creating a ‘league of democracies’ isn’t new. An attempt was made in 2000 by the United States in creating a ‘Community of Democracies’. In-principle, it is perfectly acceptable for freedom-loving governments to speak-up and defend democracy. However, there are issues required to be borne-out.

For instance, friends of America might not necessarily all be democrats and, because of this, the US might find it hard to say no over critical areas of difference that may arise between nations. John McCain’s League of Democracies is certainly due to be framed around exacting rules for countries entering or leaving, a Concert which could be viewed as an alternative source of legitimacy, should the Security Council be hopelessly divided on issues of the day. A league that would seek two-thirds majority of the 60 countries in authorising the use of force to deal with threats to peace or in upholding the guiding principle of having a “responsibility to protect”.

Contentiously, though, would a group of countries that span continents from Botswana to Chile, and Israel to the Philippines, ever manage to strike accord? Some may argue that a democratic caucus at the UN has achieved very little and by simply dividing the world along different lines, again, might seem a backwards step. Would such a league be in a position to solve pressing global problems? Coping with climate change and the effects of global warming, for example, requires China and India, as active members in any settlement; energy security needs the co-operation of both Saudi Arabia and Russia.

 

© Mark Dowe 2008: all rights protected

 

Related:

• Jonathan Fenby, “The G8 is becoming increasingly irrelevant”

http://www.guardian.co.uk/commentisfree/2008/jul/11/g8