---------- Forwarded message ---------- Date: Thu, 10 Sep 1998 18:03:26 EDT From: [EMAIL PROTECTED] To: [EMAIL PROTECTED], [EMAIL PROTECTED] Subject: The United Nations in a Globalizing World The following is a keynote address by Georg Kell, First Officer, Executive Office of the Secretary General, United Nations at the recent joint 1998 Canada-U.S. World Federalist Assembly at the University of Toronto. Acknowledgments to WFC Executive Director, Fergus Watt for having passed it on. Georg Kell is a Senior Economist in the Executive Office of the United Nations Secretary-General. The views expressed in the paper are his own. Don Kraus ==================================================== 1998 Canada - US World Federalist Assembly August 30, 1998 Toronto The United Nations in a Globalizing World Georg Kell Global conditions today offer unprecedented prospects for peace and prosperity. The major powers are at peace with one another. There is widespread acceptance of the basic tenets of democratic governance. Technological advances are making possible a free flow of informationand ideas, improving transparency and accountability. The rapid diffusionof new technologies widens the scope for economic opportunities and global structural changes. Today, we have the tools at our disposal to copewith many of the persistent problems mankind has been struggling with. Yet, we seem ill-equipped to harness fully this potential. We live in an era of stark contrast: Tremendous wealth exists alongside chronic destitution; economies expand in some regions while sudden disruptions elsewhere erode the hard-won gains of a generation. Persistent poverty, civil wars, global environmental threats and the AIDS epidemic provide us with daily proof that our world is full of misery and threats. As ties between countries and people are growing, the contrasts of diverging developments are amplified. Global production systems may attain unprecedented levels of efficiency and generate new wealth in the hands of a few while extreme poverty may exist alongside. Dynamic competition creates new high paid jobs in some segments of the economy while destroying unskilled jobs in others and the weakest members of societies are being made to bear the costs of sudden disruptions. In this climate of confusion, globalization and market forces are easy scapegoats to mask domestic policy failures or are used as free tickets to advance narrow interests. Uncertainty and rapid change nourish fears. People around the world have fears and governments are grappling with new responsibilities and constraints. In the North, significant segments of the population see free trade and economic integration as threats to their jobs, environments and social safety nets. In the South, people fear being left behind and a lack of opportunity to feed families and to survive. These fears are global.Markets are global. But governments are local. The widening gap between what citizens demand and what governments can deliver is increasingly being seen as an effect of globalization and has brought about a heightened focus on the role of multilateral institutions therein. The stakes are high. Reversing market liberalization would deprive the great majority of the world's population of the opportunities they desperately require. Especially developing countries depend on the continued openness of markets. Striving for a truly open and inclusive global economy remains the only viable option to spread benefits more widely. Views differ how this can be achieved. As markets are going global it seems justifiable to compare characteristics of well functioning national markets with international markets. One of the striking differences is the degree to which they are embedded in social imperatives and public authority. A fundamental characteristic of well established market based economies is the role of governments in promoting economic performance by providing the necessary and legal and institutional framework and by linking the functional values of the market with the broader aspirations ofsociety. Notwithstanding great variations across countries, few would question that successful market based approaches would be possible in the absence of: First, a well functioning legal system, including property rights and competition policies. Second, measures to reduce the risk of instability, particularly regarding financial markets. Third, investment in basic research, infrastructure and public services to spread opportunities across society through education and other services. Fourth, some degree of safety nets to smoothen transitions and to ensure a minimum of human security. The international community has long tried to extend the rule of the law to international economic relations. However, the track record of achievements in building supportive structures at the global level is a mixed one. Much progress has been made in some areas, notably in the area of international trade. But there is still very little regulation of financial markets although they are considerably more integrated than product markets. Moreover, initiatives aimed at promoting equity and opportunities have regressed. Clearly, the current underpinning of global markets shows serious gaps if compared to characteristics of national markets. These gaps are, however, not simply a lack of inaction. They result from uneven progress in international cooperation and selectivity in forging international applicable rules in some areas while neglecting action in others. In addition, we must recognize that the international community's efforts to establish norms, standards and policy imperatives is a cumbersome and time consuming process. More often than not it is in response to actual developments and rarely can it keep up with the pace of actual change.The resulting lag may thus further accentuate the effects of selectivity As market integration deepens, the need for complementing global markets with effective institutions that provide the required rules, safeguards again imperfections and failures and promotes equity is becoming more pressing. Three guide-posts for action stand out: First, global markets require global rules. One of the basic preconditions for spreading more widely the benefits of globalization is the existence of well functioning global rules and a level playing field that enhances mutual benefits while safeguarding the interests of the weaker players. Economic benefits cannot materialize fully in the absence of regulatory consistency or if the interests of the small or weak player are not protected against the strong. As markets go global, so the need is rapidly growing for more global rule-setting. The rule-based international trading system is an outstanding example how multilateralism can be used to spread economic opportunities while respecting the rights of the weak. Over five decades the multilateral trading system has brought about a tremendous surge in prosperity and dramatic reduction in poverty. Indeed, the aspirations and well-being of hundreds of millions of people, especially in the developing world, depend on the continued openness of markets. The current Asian financial crisis with its incalculable economic and political consequences is a stark reminder that globalization entails enormous risks and that not all forms of globalization are equally desirable. It also shows that the rule-based trading system is being made to bear the cost for inadequacies of the financial system. Using the financial crisis as a pretext to condemn globalization per se would mean throwing away the baby with the bath water. After all, trade is the most viable path to escape the crisis and restoring confidence for equity investment is one of its preconditions. Second, global markets must be coupled with global values. Markets do not function in a vacuum. They arise from rules and laws that reflect the broader aspirations of society and as such must be coupled with a broader purpose. Global society, if it is to flourish, must work from shared norms and objectives. The main function of the United Nations has always been establishing and advocating universal values. Freedom, justice, the peaceful solution of disputes, social and economic progress, equality, tolerance and dignity; these are the universal values set out in the Charter. These are the values that can unite people of all cultural, political or religious backgrounds, values that should complement the functional values of markets and apply to globalization. Giving meaning to these values and coupling them with the markets calls for fresh approaches and new alliances that cut across traditional lines. Building a dialogue with the business community and intensifying interaction with other non-state actors are possible approaches towards that end. Third, global values call for global action. Widespread poverty and widening income gaps, across and within countries are a stark reminder that markets, left by themselves, cannot necessarily bring about sufficient income convergence across the global economy.The important role that governments have to play in reconciling the imperatives of competitive forces of the global economy with the domestic demands of the disadvantaged has been widely recognized. And there is also much recognition that the dynamics of capital accumulation retain strong domestic roots, despite the fact that in a more open and integrated world economy, both the quantity and the quality of investment are increasingly influenced by external factors. However, it is not only good governance at the domestic level that counts. Increasingly, the focus is on the international community and the growing gap between evolving needs on the one hand and the capacity to deal with them effectively, on the other. The widening rift between ambitious goals and commitments as embodied in the outcome of recent UN conferences, and the degree to which member states are able or willing to honour such commitments raises many disturbing questions. The decline of official development assistance in the face of persistent poverty and the slow and insufficient progress in debt initiatives which is depriving the poorest countries of badly needed growth opportunities are two examples that testify to the nature and extent of this predicament.For us at the United Nations, the challenge is nothing less but to continue to search for new ways to mobilize political will in an era where public opinion is often shaped by narrow interests. The urgency for rebuilding a case for solidarity is obvious as few would doubt that market capitalism will ultimately not succeed if it cannot promote both prosperity and justice. Globalization puts a premium on supportive frameworks, global rules and values. The United Nations is uniquely place to play a major role in meeting emerging requirements. The basic strengths of the Organization, its broad mandate and its legitimacy dovetail with the requirements oftoday's world: (I) structural failures are increasing global in nature, (II) the need for deeper integration between different policy areas is increasing recognized and (III) the role of non-state actors in international affairs calls for greater consent and legitimacy that other bodies withmore limited membership cannot provide. Yet, the United Nations faces tremendous challenges to bring to force the potential contribution it can make. It remains in essence an intergovernmental body whose scope for action is tightly controlled and jealously guarded by its member states. To the extent that governments themselves are undergoing change and as long as the debate on the role of the state remains inconclusive, there is considerable ambiguity. The Organization is expected to adopt to changing and sometimes conflicting priorities. Despite these constraints, the United Nations, under the leadership ofUN Secretary-General Kofi Anan has undertaken the most wide-ranging reform in its history, touching upon all aspects of the UN's global operations. Departments and mandates have been consolidated and streamlined, new management methods have been introduced and costs have been cut. Member states approved the creation of the post of Deputy Secretary-General; and in the short few months since her arrival, Louise Frechette of Canada has critically augmented the leadership and management capacity of the Secretariat. One of the most important new developments is the opening up of the organization to what we call "Non-state actors". Many efforts are underway to enlist the active support of all the players that have a stake tomake the promise of prosperity and peace a reality. We know that in today's world we can ultimately only succeed if all players are on board. It is for this reason that I want to appeal to you to continue your support for the Organization. ========================================= Don Kraus is the Executive Director of the Campaign for U.N. Reform Dedicated to Building a More Effective United Nations System 420 7th Street, SE Suite C Washington, DC 20003 Phone: 202-546-3956 Fax: 202-546-8703 Toll-free: 888-869-CUNR Email: [EMAIL PROTECTED]
