New Politics For 2009

Two-thousand-and-eight has been indelibly marked by the global financial crisis. No one predicted its outbreak or its scale; I don’t think anyone knows when and how it might end. It is already clear that initial reassuring statements about it were irresponsible. In the coming months, the world and world politics, will be severely tested. Searching for ways out of the crisis will be a difficult, agonizing process. Not all early efforts were effective. This first failure in the functioning of our fully globalized world caught us by surprise, largely unprepared.

As I read today the reports from the July G-8 summit meeting held in Japan, it is amazing that just a couple months before the crisis erupted, world leaders seemed unaware of warning tremors. The summit meeting was a routine gathering. Its very format—the way it was prepared and conducted—seems outdated. We need a new vision of global political leadership, a new willingness to work together in this globalized world. Politicians are lagging behind the events.

The crisis in the Caucasus in early August was a bolt from the blue. Any war, even a short one, is always a failure of politics and policy. The Georgian leadership’s military misadventure spelled disaster for thousands of Ossetians, Georgians and Russians; it also highlighted the absence of an effective security system in Europe for preventing and resolving conflicts.

Trouble hovers over other continents, too. Civil strife in Congo, Sudan and elsewhere in Africa has cost thousands of lives. The terrorist attacks on Mumbai were more than just a tragic reminder of the threat posed by terrorism: they also raised the issue of the responsibility of the state on whose territory this large-scale attack had been prepared. The situation in Afghanistan seems dismal. The Middle East remains a tinderbox. On top of it all, piracy has made a comeback, straight out of the dark ages.

The flows of migrants, social unrest in many countries (including some that are far from poor), the recent problems with contaminated food supplies, massive human rights violations—the list of the world’s ills can go on and on. There is an increasing sense of a world in trouble and turmoil, further aggravated by the crisis of the world economy.

Talking to people in different countries, again and again I hear these questions: What is happening? What is in store? Why have the world’s political leaders failed to address effectively the old and new threats? These are legitimate questions. To answer them, we must look at the underlying causes of recent events.

I am convinced that the root cause of the current widespread upheaval is the inability and even unwillingness of political leaders to correctly evaluate the situation after the end of the cold war and jointly chart a new course for the world.

The “winner’s complex”—the fanfare of triumph sounded by the West after the Soviet Union left the international arena—obscured the fact that the end of the cold war was not a victory for one side or one ideology. It was instead a common achievement and a common challenge, a call for major change.

But why change if, as Western politicians believed, all was fine? They would continue to lead the rest of the world with their unfailing doctrine of free markets and alliances like NATO, which were ready and eager to assume responsibility for peace in Europe and beyond.

Payback came in 2008. We will likely continue to pay for misguided thinking in the years to come, unless we have the courage to look at things honestly and rethink our approach to world affairs.

Throughout the world, there is a clamor for change. That desire was evident in November, in an event that could become both a symbol of this need for change and a real catalyst for that change. Given the special role the United States continues to play in the world, the election of Barack Obama could have consequences that go far beyond that country.

The American people have had their say; now all will depend on whether the new president and his team measure up to the challenge.

The U.S. presidential election was followed by another consequential event: the G-20 summit meeting in Washington foreshadowed a new format of global leadership, bringing together the countries responsible for the future of the world economy. And more than just the economy is at stake.

In and of itself, the fact that the G-8 leaders were joined as equal partners by the leaders of China, India and Brazil and almost a dozen other countries was a recognition, perhaps a reluctant one, that the economic and political balance in the world had changed. It is now a given that a world with a single power center, in any shape or guise, is no longer possible. The global challenge of a financial and economic tsunami can only be met by working together.

A new concept is emerging for addressing the crisis at the national and international levels. The steps now being contemplated seem better suited to the needs of a global world than the previous approach, based on the hope that the market will eventually take care of itself.

If current ideas for reforming the world’s financial and economic institutions are consistently implemented, that would suggest we are finally beginning to understand the importance of global governance. Such governance would render the economy more rational and more humane.

This is a daunting challenge. Yet it can be met. We need to encourage equitable dialogue, democratize relations among nations and push back militaristic tendencies in politics and thinking. This amounts to a new agenda for international politics.

G-20 initiaves

Ratified versus stagnant policies
By Romina-Ruiz Goiriena.

1999 Berlin, Germany

The Group of Twenty Finance Ministers and Central Bank Governors (G-20) was established to bring together systemically important industrialized and developing economies to discuss key issues in the global economy.

2000
Montreal, Canada

Focused on improving effectiveness of financial institutions through appropriate exchange rate arrangements, prudent liability management, private sector involvement in crisis prevention and resolution, and adoption of codes and standards in key areas including transparency, data dissemination, market integrity, and financial sector policy.

2001 Ottawa, Canada

Action Plan on Terrorist Financing was adopted which includes; freezing of terrorists assets, implementation of international standards, exchange of information, provision of technical assistance, and reporting on actions.

2002 Delhi, India

Leaders discussed the need to develop a broad understanding on sovereign debt restructuring. Ministers stressed the importance of dialogue among creditors, borrowers and institutions in order to implement collective action clauses.

2004 Berlin, Germany

Evaluated Fiscal policy to ensure that public expenditures and debt remain at reasonable levels in relation to national aggregates in order to prevent economic growth being restrained by crowding-out, anticipated future tax increases and inflationary pressures.

2005 Beijing, China

Published statement on reforming Bretton Woods Institutions (BWIs). The IMF and World Bank are called to adjust their operations in a timely manner so as to meet the changing needs of their members, while maintaining their high quality standards and results-orientation.

2007 Cape Town, South Africa

Discussed a range of policy issues related to commodity cycles and financial stability, concentrating on energy. Reiterated that well-functioning markets will support investment in new supply, bring forth efficiencies and new technologies, encourage the use of economically efficient renewable energy sources, and allow knowledge and resources to flow across borders.

2008 São Paulo, Brazil

Reviewed the causes of and policy responses to the global financial crisis, and shared perspectives on scenarios going forward, with a particular focus on ensuring financial stability, supporting global growth and maintaining recent achievements in poverty reduction and social inclusion.

2008 Washington, D.C., USA

The White House reported that the summit had reached what would be known as the Washington declaration.