Reforming International Institutions towards a Global Deal
The world is, in every aspect, imperfect. So is the human nature. Former Fed Chairman Alan Greenspan said â€śunless somebody can find a way to change human nature, we will have more crisesâ€ť. The current financial turmoil sees the vulnerability and unsustainability in economy growth for both the developed and developing world. It also showed us how quickly bad things spread over the whole globe and how deeply they penetrate through our economic structure which is, surly beyond everyoneâ€™s expectation.
We are at the age, as I call it, the age of mash-ups. And thanks to the pervasive interconnectivity, not only our RSS news feeds can be mashed-up, bad things are becoming harder to isolate, and more likely to produce the ripple effect. A recent example comes from the Financial Times which reported that Todd Stern, the US climate change envoy, has warned countries such as China and India that they run greater risk of protectionist measures in the US Congress if they do not co-operate on international steps to hold down carbon emissions. Climate change becomes an influential factor in global trade and commerce, although in an undesired way.
Ever since the rising of the British Empire in the 18th century, the ability to control a global market has become a symbol of national strength for superpowers. Catalyzed by the establishment of dedicated inter-governmental institutions like the UN, World Bank, IMF and WTO, an interconnected and interdependent intra-continental marketplace and trading system has been growing in depth and in range: it almost reaches every business sector one can possibly tell, which has inevitably and dramatically changed peopleÂ´s everyday lives and ways to do business.
Yet the global marketplace and trading system is far from perfect. â€śTrade warsâ€ť is a keyword not hard to find on everyday news headlines. The most recent one, the US governmentâ€™s decision to impose steep tariff on imported Chinese tires, is still hot in debate. Globalization is more of a mixed blessing. Everyone gets benefits and everyone gets hurt. However, globalization is not a zero-sum game. The winners are going to be the ones who embrace it; the ones who face the reality and think in long term; the ones who are willing to engage constructively and solve problems proactively and efficiently; the ones who treat each other as partners not enemies, and the ones who interact with other parties based on a genuine framework of trust.
To win the game in the globalized world is by no means easy, and no one is going to be able to make it in its current shape, nor by itself. The ongoing global crisis puts the worldâ€™s dominant superpowers as well as emerging economies all on the trail of unavoidable reform and revitalization. For example, on the national level, the U.S. has to erect and put into work a more effective and efficient financial regulation architecture which focuses more on preventing such crises than fixing them. From the federal government to ordinary households, a more conservative way of spending needs to be actualized to lower the deficit. On the other side, China needs to rethink its GDP driven development model and to reshape its GDP composition, in order to make the economy less dependable on foreign exports and more on domestic needs and consumption. It needs to further encourage grass-root innovations and entrepreneurship by policy incentives favorable to small and medium businesses (SMEs). It also needs to demonstrate more transparency in its governmental structure which is a necessary condition for convincing the world on Chinaâ€™s peaceful rise, and allow them to cooperate with China on mutually interested issues such as global trade, climate change and international anti-terrorism with more trust and less vigilance. A government with more transparency and less corruption is also fundamental and urgently needed for China to further maintain its domestic social stability and fast economy growth at the same time.
Long story short, America will become more like China and China will become more like America, but must be in a smart way. Given the fundamental differences in culture, history and ideology, two countries cannot and will not be unified. On the contrary, differences create diversity which makes our world colorful and versatile.
International institutions are established because of global diversity. Among other duties, they house, encourage and advance international corporations on various issues through discussion and debate. They provide a global platform for nations with very different situations to understand and help each other in order to seek common prosperity. In my opinion, accepting the differences between each other respectfully and having the willingness and determination to cooperate with a sense of compromise is the single most important principle in reshaping todayâ€™s international institutions. For example I personally didnâ€™t see some delegatesâ€™ absence when Iranian President Mahmoud Ahmadinejad was giving speech at the UN General Assembly buys too much benefit. How would one possibly think a country is willing to solve problem with another in a diplomatic manner without even tolerating its Presidentâ€™s talk? The underlying precondition for negotiation is not apparent.
There have been rising doubts and attacks on the current global order, from both developing nations including Brazil, Russia, India and China, and the developed ones. In particular, UK Prime Minister Gordon Brown supports and asks for international institutionsÂ´ modernization and reformation. The current world order built upon the post-WWII global structure is not yet broken, but is becoming old-school under clear trend of open globalization, just as Mr. Brown pointed out. Modernizing and reforming international institutions cannot be done without an agreement that all parties are willing to accept. As an example, in my opinion, regarding issues on climate change, key elements including but certainly not limited to the following should be seriously considered and debated with the engagement of all nations for making a global deal:
- A multilateral agreement and consensus must be reached which consists of specific and pragmatic approaches and road map for global greenhouse gas emission reduction and the establishment of a global carbon market allowing open trading between nations, sectors or even companies to provide flexibility in attainment of strategic development objectives.
- A set of blueprints must be set up to combat global climate change in more detail than stated in the UN Millennium Development Goal #7. Establishment of a special task force under the UN to periodically provide status check and global statistics in achieving those goals is necessary.
- A global fund should be put together and maintained by the World Bank to provide loans to developing countries helping them to meet their emission reduction goals and foster local energy-friendly initiatives and entrepreneurships.
- A global â€śenergy-creditâ€ť system which indicates how well a country performs in combating climate change in terms of domestic legislation, emission reduction goal achievements and capacity building, might be considered as a reference to the above mentioned global fund for it to better issuing loans to countries with good energy credits.
- Global cooperation on clean energy technology development and deployment, and a mechanism for regular technology assistance and transfer from the developed to the developing nations are necessary. Closer cooperation and interaction among major international institutions on related issues is also needed.
Seemingly ironic enough, hard times always give birth to big ideas and trigger true innovations and sincere changes â€“structural as well technological, because the sense of urgency doesnâ€™t allow a Plan B nor Do-it-Later type of deal. Two world wars gave birth to a fresh world order with a new set of international institutions aiming at global cooperation, conflict prevention and arbitration. On the financial side, the Great Depression in 1929 led to the establishment of FDIC and accelerated financial regulatory legislations in the US such as the Securities Act in 1933 and the Securities Exchange Act in 1934. Those changes brought positive impacts to the World. Now under the current global financial crisis and the global warming on the horizon, we, as citizens of the world, have to urge that we have no future unless we work together, again within a framework of mutual trust and a sense of compromise. As history has showed, although imperfect in nature, the human society has been smart enough to solve crisis or conflict with strong belief in change and active cooperation. We have every reason to believe this time is no different.
Mr. Ran Ren is an EVA Junior Fellow alumnus from year 2008. He graduated from Binghamton University, State University of New York as with an MSc degree in Electrical Engineering. He is now working at a very early stage startup company called Voicelever based in the Seattle area. The company focuses on improving computing efficiency by developing a breakthrough on-body communication technology platform. Besides professional work, he is interested in international relations and global politics. He is the founder and managing director of an international youth-oriented and youth-led publication called The Horizon. He represented China in the International Telecom Union (ITU) TELECOM World as one of the two youth delegates. He was appointed by the United Nations as an e-leader in youth and ICTs in 2008 and spoke at a number of international forums.