Efforts of 1,500 experts’ labour come to fruition at summit Sunday, 30 May 2010 02:59

by Mark Malloch-Brown

On May 30th, an unusual exercise will come to fruition. The World Economic Forum will publish the results of the labours of some 1,500 experts, organised into dozens of specialist study groups, to redesign international cooperation. Over the last 18 months they have been beavering away at every kind of global problem from the financial crisis to poverty, security, climate change, trade and migration to name a few to propose how each could be better handled at the global level. Now they will have a chance to present the report and their ideas to government representatives at a summit in Qatar.

The work was prompted by the financial crisis and the glaring gaps it exposed in the international regulation of banks. But this seemed to be just the tip of a wider problem. Across so many spheres of economic and political life we are more integrated but less governed than ever before. As issues have gone global government has remained stubbornly national. The generation of international organisations, the UN and the Bretton Woods institutions, have never filled the space left by the collapse of the old European empires and nor would they have wanted to. Indeed the legacy of that period is countries often jealously guarding their independence from outside interference. But as the world is driven into each other’s arms by revolutions in trade, communications and technology, there is precious little agreement or capacity on how to handle the growing list of global problems.

The stumbling response to a globally agreed path to international financial regulation is just one example as ad hoc country level responses diverge and financial firms start to shop around for low tax less regulated homes thereby defeating the whole purpose of reform. Even in avowedly more governed Europe, countries cannot agree on what intensity of volcanic ash threatens a jet engine.

There was early optimism in 2009 that the enhanced G20, rushed into place to replace the clapped out G8, might offer an effective global crisis mechanism. In its first meetings at the head of government level in Washington, London and Pittsburgh, it appeared to act decisively to calm the markets by launching a co-ordinated global fiscal stimulus and equipping the IMF particularly with the resources to fire fight any further outbreaks. But as time elapsed and countries found themselves saddled with the nationalised losses of their banks and the cost of the stimulus itself they have fallen back into national laagers. Politicians have been fighting to domestically and despite the efforts of the South Koreans and the French, the current and future G20 chairs to keep up the ambitions for the G20, the world is looking querulous and divided.

The G20 is as dependent as the stalled trade and climate negotiations on political will. And governments have lost much of what they had because of the controversy at home stirred by the global bailout. Its most ardent champion Gordon Brown has been thrown out by the British voters. President Obama faces a resurgent Republican Party and Mrs Merkel is struggling to justify a Greek rescue to Germans. The net effect of international financial statesmanship in 2009 is soaring debt and domestic political headaches a year later. No wonder politicians avoid multilateral entanglement whenever they can.

The G20 has two further handicaps. It represents 85 percent of the global economy and has a lot more clout than the rheumy old G8 with its preponderance of old western economies that left out China, India, Brazil and South Africa among others. But the G20, although bigger, still omits a lot of countries. What about the rest of us, the G172, is the increasingly frequent complaint at the UN. For many others of us almost as important an omission are the voices of civil society, the NGOs, business and others who are such important sinews of the new global political economy.

And hence to the second handicap, and where the World Economic Forum project can perhaps also help, the policy development process of the G20 is a strange one. Borrowed from the more intimate G8 exhausted sherpas shuttle backwards and forwards to endless meetings around the world, supplemented by telephone conferences and frantic email drafting to agree the key instrument of a G20 meeting, the Communique. Even though G20 hosts commission papers and consultations, most gets lost on the cutting room floor as the frantic struggle to find consensus on the Communique proceeds. Complex problems are reduced to a vague lowest common denominator paragraph for the communique. Afterwards debate resumes as to what was meant and action of any kind is too often buried.

The World Economic Forum’s chairman, Klaus Schwab, hoped that by assembling policy experts, not just from governments and international organisations but from think tanks, universities, business and NGOs, not bound to representing an official point of view, and putting them under no such artificial deadline and no requirement to agree on very small detail, a set of more original and more three dimensional proposals might emerge than the narrow grind of the G20 and other international negotiations allow. How have the experts done? First, they have avoided big new international institutional initiatives, no relaunching the UN or closing the IMF. Instead there is a focus on smart distributed ideas, a forum to get energy users and suppliers talking to each other about energy stability and perhaps even pricing, something similar to get countries that produce migrants around the same table as those who find they are receiving them. The absence of big proposals for centralised change fits the temper of the times. There is no appetite for it in this post-global recession moment.

In fact there are a lot of doubts about what big public institutions really can achieve alone in a fluid changing multi-stakeholder world. Unsurprisingly, there is a lot of scepticism among the experts about governments alone having the will or capacity to fix problems. So focus instead on how governments can provide the nudge, or incentives through regulation and guarantees, for the private sector and not for profits to take on expanded roles in infrastructure and service provision across much of the world. Indeed in the climate change area the report makes the explicit recognition that corporations and civil society are chomping at the bit to move forward on a low carbon global economy even as governments shy away from the political and financial costs involved. Similarly, the private sector has practical ideas it has contributed to this exercise about safe nuclear reprocessing to allow the growth of a global nuclear power industry that does not increase the threat of rogue weapons.

The experts are good too at picking up issues that the rigid tramlines of inter-governmental thinking have missed. For example governments have kept clear of governance of oceans since they spent long years mired in the Law of the Sea Treaty, a shaggy dog story of an international negotiation that took some officials whole career to complete. Now the Forum panel has declared that oceans are the great silent environmental threat, potentially as significant for our children’s future as climate change, where biodiversity and marine life is being recklessly destroyed as polluters and commercial fishing fleets treat it as their private fief. They developed their proposals long before the spill in the Gulf of Mexico which now reinforces their alarm.

Because the experts did not represent official positions there is room for both common sense but of course also sometimes quite the opposite as imaginations are unleashed and utopia hovers as academics strive to outbid each other for the most cut through proposal. But there was more of the first than the second. There are sensible ideas about improving global public health and development assistance and two of our experts, an American investor, ex-Goldman Sachs as it happens, and a Chinese economist who were able to make a good hand of stringing together a linked set of proposals on regulation and trade imbalances that might offer the G 20 summiteers a road map.

The approach shows there are a lot of good ideas out there about how to manage a world where we all sink or swim together and that the G20 or the UN need to be supplemented by processes where a wider range of opinion has the opportunity to reflect and debate solutions in a less forced and narrow way than official channels. But it also shows each approach needs the other. These proposals will remain just that, interesting academic ideas, if governments do not pick them up and incorporate them into their initiatives and international negotiations. On the other hand, governments have shown themselves conservative and cautious about bold international change except when crisis forces their hand. Change will only happen if the rest of us line up behind ideas we care about and agitate for them.

Mark Malloch-Brown is Vice-Chairman of the World Economic Forum and a former UN Deputy Secretary-General and UK ministerial G20 envoy.

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