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Good Governance Vs. Winner Take All

How can the world leaders make sure that the world is ruled by good governance?

April 13, 2004

How can the world leaders make sure that the world is ruled by good governance?

We live in a world today where there is little or no trust. World governance is not good — and ethical standards are low.

In fact, we have made a mess of the world. Two millennia of experience and mountains of knowledge have not made us more capable than the Stone Age people at managing our affairs.

Now, we add fear. We live in fear, every one of us. We fear the terrorists and their alleged supporters — in the same way that the terrorists fear us.

We fear flying, we fear traveling to certain countries, we fear nightclubs, we fear letters, parcels and cargo containers, we fear white powder, shoes, Muslims, pen-knives — and even metal cutlery.

They — the other side — fear sanctions, starvation, lack of opportunities, shortage of medicines. They fear military invasion and being bombed, captured and detained.

The world has become small, some say like a village. But we have not made much progress in the management of our world — our village — despite its diminished size.

Just as in the Stone Age, when the man with the biggest club ruled, in our modern, sophisticated global village, power rules.

The applied ethical standard of our globalized world is one in which a country’s killing power dominates.

It was not supposed to be like this. When the Cold War ended, we thought that we would see peace and prosperity. After all, those who believed in peace and universal justice won. “The Evil Empire” had been overthrown.

But the loss of the Evil Empire created a hole in the balance of justice, fair play and global powers. When there was communism, capitalists curbed their greed and avarice. They showed a friendly face.

Now there is no other side and this friendly face of capitalism is no longer needed. Now capitalists can do what they like without restraint — and what they like is simple self-enrichment. They want to make more money for themselves.

In a free world, there must be competition. Out of this competition, the strongest and most efficient will win. If you are small, weak and inefficient, it is best that you go.

In athletics, this may work, as there are different classes of competitors. However, in competition between countries and corporations, there are no categorizations or classifications — and no handicaps are given.

Thus, the biggest and the most efficient are allowed to dominate and take all. This new ethics of competition inspires financial and corporate mergers. It virtually ensures that tiny banks and businesses in poor countries do not stand a chance. The small and the poor are swept aside — and big is beautiful.

Unfortunately, there are no guarantees that the big will not cheat, fall or go bankrupt. Indeed, we should take note of Enron, Global Crossing, Arthur Andersen and United Airlines, to name a recent few. Are these exceptions or the rule?

Today, the disparity between the rich countries and the poor countries is greater than ever. The richest have a per capita annual income of more than of $30,000 — and the poorest $300.

Of the world’s six billion people, one billion are malnourished, under-educated and without a roof over their heads. Many scrounge for food, clothing and materials for their shelter.

Despite the world’s political transition into the post-Cold War era, their fate has not improved. The misfortunes of the weak are their problems.

The exploitation by the greedy, the double standards of developed nations, hypocrisy over human rights, disregard for human suffering, the oppression of the weak by the strong — all these have been aggravated by the ending of the Cold War and the victory of the righteous and rich.

Some say that September 11 was an attempt by the poor and disenfranchised to hit back in the only way they can. Now, groping for the enemy, the strong hit out in every direction. No part of the world is excepted, no one is free.

All of us now live in fear. Even the rich are not as prosperous any more, while the poor are actually poorer. We can safely conclude that we have done a poor job of managing our global village.

We have not built trust, nor created good global governance. So how do we create trust and good governance in the new era?

This is fundamentally a question of our ethics. We must build trust through proper ethics and compromise. We must be good people who live up to high ethical standards.

Good governance will come if we simply curb the greedy and realize that markets cannot be self-regulating. Governments are not yet anachronistic. They have a crucial role to play in good governance, ensuring ethical behavior and promoting compromise.

The world is big enough — and rich enough — for everyone. A win-win solution is possible. Together, we must build a better world through better ethics, more trust — and real governance.

Excerpted from Frank-Jürgen Richter and Pamela C.M. Mar’s (editors) “Asia’s New Crisis: Renewal Through Total Ethical Management” Copyright © 2004 John Wiley & Sons (Asia) Pte Ltd. Used by permission of the publisher.

Based on remarks made at the Annual Meeting of the World Economic Forum in Davos, Switzerland on January 28, 2003.