Opportunity from Crisis: Obama's Chance for Real Global Leadership

Leadership is not an inherited position. Leadership is earned by winning the hearts and minds of people to facilitate behavior change.

And while whole elections are won by rhetoric, leadership is earned by actions. Actions speak louder than words, as they are more credible indicators of what an individual could achieve.

To his credit, President Obama mobilized more people when he visited Europe than a major sports event such as a world soccer cup or a Madonna concert would. His "Yes We Can" slogan hit more chords throughout the globe than any other United States presidential candidate's message.

No wonder then that the world has been eagerly awaiting change coming from the United States, which regardless of its present woes is still the biggest economy and military force in the world.

This is partially because many underprivileged people around the world identified with him as a beacon of hope to achieve their own dreams.

The hope projected onto Obama is also due to the disappointment the same people had during the Bush presidency with the country that has long been hailed as the country of opportunities. As a result, the United States' popularity ratings in numerous countries hit major lows during the end of 2008.

People throughout the world were disappointed because they felt that the values that had made the United States successful and exemplary to the rest of the world were being eroded by its own actions.

This included core notions such as: respect for others and human rights, democracy where everyone has equal voting rights, freedom of thought (and freedom of press), freedom of trade and liberal economy, rule of law, liberal immigration policy and a welcoming attitude, and freedom of religious belief.

Guantanamo was a clear example of perilous double standards spanning the vast gap between what was preached and implemented.

The world is also ready for a global leader. As the number and the severity of issues that influence peoples' lives gain a global dimension, so should the solutions. Issues such as global warming, water scarcity, global terrorism, global epidemics and most recently, the global economic crisis, all need global solutions.

While global issues require global solutions, global solutions need global leaders to mobilize global resources. For example, when trade and financial flows became globalized, the main actors — the companies — went through a major reorganization.

Strategic decisions and standard-setting were centralized, regional employees who are in closer to the customer were empowered to make decisions related to their markets, and middle management levels were eliminated.

If a parallel were to be drawn for the overall political system, the global governance mechanisms would have to be restructured to enable a democratically chosen global government to address global issues, while city governments would be empowered to address local issues.

A new global system

Yet, it would be naïve to suggest that the power of national governments be reduced when they hold the rights for organizing elections, tax collection and spending, as well as military power. The legitimacy of any political leader who is in a position to take such decisions is based on their approval in national jurisdictions.

By the same token, it should be clear that focusing on national remedies is not going to bring solutions to our global problems. When France tries to save its automotive industry by putting on a condition to keep jobs home, Czechs who host more productive car manufacturing facilities understandably protest.

When Ireland gives a state guarantee for deposits, inevitably many other nations end up following suit. When one country's terrorist is another's freedom fighter, it is extremely difficult to overcome terrorism.

When countries cannot agree on greenhouse emission limits and there is no enforcement, it is very difficult to implement appropriate measures throughout the world.

Under these circumstances, what is needed is global coordination, global standards, global oversight and fair treatment of people and companies regardless of their nationality. The sooner we realize this, the more effective we will be in overcoming these global challenges.

What we need is global institutions with teeth, power and resources to address global issues. This can only be achieved by consensual delegation of partial sovereignty and resources, a la European Union, to global institutions on selected areas, by the nations.

Yet, the odds are thin for such a major overhaul of the global system to be implemented by democratically-elected national leaders whose average time horizon is about two years. Another structural problem for overhauling global governance is that national leaders are elected by their own citizens, raise their resources internally, and focus on their own electorate — rather than global issues.

In the words of former speaker of the U.S. House of Representatives, Tip O'Neill, "All politics is local." Therefore, a national focus takes precedence over global visions. However, such a short-term time horizon and the predominant internal focus makes it difficult to agree on any consensual delegation of sovereignty and resources to global institutions.

Leadership for the world

Overcoming this myopia requires real global leadership. Given his global popularity, Obama could become a real global leader — if his actions support such a global perspective and if he could use his political chips to "change the world," instead of focusing on national issues and falling prey to short-term thinking.

Obama started his presidency by phasing out Guantanamo, a clear message to the world about sincerity of American values. His changed policy approach to Iran was also a positive message for peaceful coexistence.

However, his silence on the Israel-Palestine conflict is a missed opportunity. His silence on the matter is not winning him any points in the Middle East or elsewhere.

Another missed opportunity was Davos. Had Mr. Obama came to Davos to acknowledge that the global economic crisis needs global solutions and the United States was willing to restructure the governance of global institutions such as the IMF, World Bank and the United Nations in order to raise global resources for these institutions to have teeth, he would have possibly done more to solve the current financial crisis than passing the huge spending package from the U.S. Congress.

Any hint of a more democratic and equitable sharing of power at global institutions would have helped the relevant players to focus on global solutions, rather than national ones.

It is not very clear to the rest of the world as to how the problem of toxic assets that originated from overspending by U.S. consumers could be solved by another spending binge, this time by the United States government. They are worried that the exportation of toxic assets that resulted in the contagion of the financing mechanisms underpinning the U.S. economy could infect the rest of the world yet again — this time by exporting dollar inflation.

In conclusion, it is not just Americans who are looking at President Obama as a beacon of hope. The entire world community feels it needs a serious dose of that elixir. Of course, Mr. Obama is acutely aware of the inherent conservatism many Americans have towards the pursuit of global solutions.

At the same time, as a hyper-talented politician and leader, Mr. Obama shows that these are not the times for politics as usual — and that success requires taking calculated risks.

That's why launching a meaningful global initiative could make Mr. Obama a real global leader — not only for current times, but also for the history books.

In short, global problems require global solutions. Global solutions need global institutions with adequate resources to address these issues. Raising adequate resources for global institutions need appropriate power sharing arrangements. The United States can lead the effort to strengthen global institutions so that they can address the issues that require global solutions.

Such a vision would create solutions for global problems not by wars, but by cooperating and coordinating national governments on a democratic and equitable basis. The upcoming G-20 meetings in April may be just the turning point to initiate such a move.