Going Global or Going Democratic? (Part VI)
Can rich countries support supra-national supervision of their financial markets?
- Distributing costs and responsibilities has always been at the core of the debate on global governance.
- Will rich countries support supra-national supervision of their financial markets and, in the case of the United States, avoid abusing the status of the dollar as an international reserve currency?
- There is no rolling back the technological breakthroughs and mental revolution that ushered in modernity as we know it.
- The truly radical answer to globalization's failings is not rejection — but making it work better. This challenge never has been greater.
- Rich nations wish to hang on to their profligate per capita energy and resource use. Developing regions aspire to comparable levels of consumption for their burgeoning populations.
Despite its well-known failings to date, regional integration is still seen by many Latin Americans as the last bastion against the human and environmental costs of encroaching global markets.
Japanese Prime Minister Yukio Hatoyama shares this view. He led his party to a historic victory in September 2009 on a vaguely anti-globalization platform, even though arguably no country has benefited more from it.
Curiously enough, his recipe for harmonious Asian development mirrors much of Latin America's vision for collective prosperity — creating a regional currency and setting up a forum to deal with intra-regional disputes.
His reasons also ring similar. Because countries in East Asia differ markedly in size, development stage and ideology, a regional framework for economic integration and political dialogue is the only answer to longstanding rivalries and mistrust.
Is globalization irrevocably incompatible with regional integration and grassroots democracy — or human and community values, as Hatoyama puts it? Must it remain an expression of ruthless and unbridled global capitalism?
The fact remains that there is no rolling back the technological breakthroughs and mental revolution that ushered in modernity as we know it.
The truly radical answer to globalization's failings is not rejection — but making it work better. This challenge never has been greater. The dramatic collapse in global financial markets and the ensuing worldwide recession puts in stark terms what climate change had already made abundantly obvious: Global governance in its present form is unsustainable.
The recent failure of long-established coalitions of countries and institutions to provide leadership and credible guidance explains the frantic search for a replacement for the G-8 — and even for the United Nations Security Council.
Given their growing role in the world economy, emerging markets and certain developing regions have suddenly become indispensable to solving major challenges such as the financial crisis and global warming.
At the same time, these very countries are, first and foremost, victims of crises for which they bear little blame. Unsurprisingly, there is mounting clamor for a new global compact offering a more equitable distribution of rights and responsibilities.
Underlying these developments is a growing awareness that contemporary society lives in fundamental imbalance. Rich nations wish to hang on to their profligate living standard in terms of per capita energy and resource use. At the same time, developing regions aspire to comparable levels of consumption for their burgeoning populations.
This highly complex — and sometimes perverse — social, technological and economic inter-connectivity has accelerated with the emergence of the Global South. The BRICs in particular have carved out highly competitive and profitable niches for themselves in the international division of labor.
The result is growing pressure on the global stocks of raw materials, on the one hand, and the migration of jobs, people and investments from North to South, on the other.
The downside of this phenomenon is splashed over newspaper headlines the world over: Wherever one turns, there is news about food riots, backlash against foreign workers and a bruising competition for access to increasingly scarce mineral and energy resources, which is only temporarily abated by the present downturn.
Distributing costs and responsibilities has always been at the core of the debate on global governance. The challenge is to take the logic of mutual dependency under globalization to its logical and more democratic conclusion. The answer comes in the form of rather pointed questions.
Will rich countries support supra-national supervision of their financial markets and, in the case of the United States, avoid abusing the status of the dollar as an international reserve currency? Only in that manner can the massive financial imbalances that create equally massive speculative bubbles be avoided.
This would help reverse a similarly monumental surge in exports from developing countries, as part of a strategy to amass currency reserves as protection against irrational assets and currency fluctuations.
Will developed countries loosen their stranglehold on the Bretton Woods institutions, while at the same time help make available to both the International Monetary Fund and World Bank the resources necessary to finance both the emergency and long-term requirements of poor regions?
Only in that manner will increasingly complex and risky financial applications in mature markets be discouraged in favor of fostering investment in high-return developing markets, where growth is most urgently needed.
Will they agree to cover the retooling costs required for emerging countries to change over to low carbon technologies — and thus boost their population's prosperity without damaging the global environment?
In other words, are industrialized countries — which launched global warming over two centuries ago — ready to pay the greater part of the bill for renovating the world's environment-unfriendly energy grid?
Finally, are they prepared to do away with protectionist policies largely responsible for making agricultural production in many poor but naturally endowed countries unprofitable? Otherwise, these regions will remain indefinitely subject to the whims of market prices and donor generosity.
Will they, for example, remove import tariffs on sugarcane-based ethanol grown in developing countries and thus allow clean, renewable and cheap energy sources to come on stream with the added bonus of generating employment in developing regions?
How else can the world move away from a system that is so wasteful and yet condemns millions to subhuman living conditions? In other words, how can we distribute more equitably the inevitable costs of reversing economic and environmental degradation that affects everyone on earth?
Back in the heyday of the Non-Aligned Movement, in the late 1950s and early 1960s, the call went out for a New Economic World Order. By funneling resources away from massive Cold War-era weapons build-up and into financing for development, prosperity for all was the expected "peace dividend."
Yet, the calls for an end to East-West confrontation — and for a better deal for the South — fell on deaf ears. Moral condemnation and the threat of exporting poverty and violence to the North were unconvincing.
Today, the former Third World has morphed into an indispensable partner in a much more interdependent world.
"Give up power — or globalization will kill us all!" seems to be the slogan of the day. A profound shift is underway in the balance of world power as a result of globalization.
Therein lays a golden opportunity for developing countries to renew confidence in democracy as a tool in defining the global future and, therefore, in taking national destinies in their own hands.
Globalization holds the answer to its own failings. It offers developing countries the opportunity to take the lead in global efforts to refashion the international economy. If national capitalism cannot be reformed from inside, maybe the answer is to change it from the outside.
In other words, maybe a more democratic system of global governance can help save global capitalism from itself. Global democracy at its most radical is the belief that people can most meaningfully determine their personal and collective destiny by helping reform an international framework that is unsustainable politically, economically and environmentally.
While this challenge unites both rich and poor, it is not surprising that it is those at the bottom who question the status quo with a greater sense of urgency.