Rising powers must be consulted for progress to be made

Public Service Review: International Development Issue 11 Tuesday, September 02, 2008

To make globalisation a success, Friedrich-Ebert-Stiftung’s Jürgen Stetten calls for organisations like the G8 to be more inclusive, or find their plans stalled by states who do not want what has been voted for. Adam Gristwood reports

If globalisation could be shaped in a way that promotes peace, democracy and social justice, then many of today’s international development challenges – such as climate change, global imbalances, the promotion of growth and reducing poverty – would be significantly less formidable.

As Head of the Department for Development Policy of Friedrich-Ebert-Stiftung (FES), Jürgen Stetten is involved with an organisation that acts as a liaison between the United Nations and partners in developing countries to strengthen the voice of the global South. An urgent issue is to identify how the imbalances caused by globalisation can be overcome.

I am speaking to Stetten in the FES New York office, in close proximity to the headquarters of the UN, a body that he believes must embrace radical change over the coming years in order to maintain its position at the heart of international affairs.

Major challenges ahead
“Members have to really battle to get together and unify around certain issues,” he tells me straight off. “What we see on a day-to-day basis is countries disagreeing on political issues, and this has repercussions on the development agenda – it is one of the main constraints on progress.”

Kofi Annan, in his last two years as UN Secretary General, gave priority to “bold and far-reaching reforms” of the body, to ensure the UN, which was shaken by disputes over the Iraq war, remained at the centre of world security. But with countries often disagreeing on issues ranging from how to fight the global HIV/Aids pandemic to how the international community addresses climate change, the pressure on Ban Ki-moon to lead further reforms is significant.

“In many respects, what many people referred to as the North/South divide has come up again, with the Group of 77 (G-77) and the US and Japan being at loggerheads on many issues, including international development,” Stetten says. “The question now is: how do you best tackle peace, development and equity issues?”

While the G8 can play a crucial role in addressing issues of global concern, at the same time, the huge influence it exerts in international affairs can result in bottlenecks, constraints and hindered progress.

Indeed, FES’ Dialogue on Globalisation has highlighted the dangers of a two-tier system that reflects global inequities of the past and imposes responsibilities on new semi-members – the 05 of Brazil, China, India, Mexico and South Africa – for decisions in which they did not participate.

A Shadow G8 conference last year, chaired by Joseph Stiglitz, identified that the G8 might no longer represent an appropriate forum for issues such as growth imbalances and poverty. Instead, the G8 can be seen as the stance of the wealthiest industrial countries to advance their interests at the expense of others.

A new co-operative
The answer, believes Stetten, is to “broaden the process” where issues of reform and transformation of the G8 can be fully explored.

“It is of key importance to include some of the rising powers in the decision-making of the G8,” he says. “The problem with the current structure is that the 05 are kind of a second chair group, and they have a very limited impact. My foundation is trying to broaden the process by bringing in some civil society voices to these debates.”

Energy security is one example of this, Stetten tells me, given the growing interdependence of producing, consuming and transiting countries. Thus, it is of absolute importance to include rising powers such as India, but also other countries such as Brazil, South Africa, Egypt and Mexico. “We envisage a broadening of the official process, and certainly scope for track two diplomacy initiatives that include G8, 05 and perhaps also other countries,” he explains.

Threats such as energy security, climate change, poverty and disease are interconnected in many ways, and Stetten warns that the ability of the international community to deal with such issues effectively hinges on the ability of nations to work together.

“Without co-operation you are not going to get any global warming policies working. You will have problems all along the way,” he explains. “At the same time, because climate change is strongly linked to energy, you have a re-emergence of national energy policy. You have these two trains flashing and the question is: which one is the more dominant?”

He predicts that actions reflecting the strong rhetoric about addressing the causes of climate change could move to the backburner, unless solutions to the two priorities are merged.

“If you have a sudden jump in the price of oil to something like $300 a barrel, there would be dramatic effects. What would happen in terms of global policies? Do you have new forms of co-operation in potential crises or the emergence of a new kind of power politics?”

And here lie the big questions for the UN. What do countries expect from it? What might it contribute in the future?

“If you move towards becoming a major area of co-operation, the UN is the natural body to facilitate that,” Stetten tells me. “Co-operation would benefit from UN involvement, like peacekeeping has since the 1990s. Very few people are aware that after the US, the UN has the most soldiers on the ground. Establishing a new role in co-operation will be a major challenge for the next decade.”

A changing development environment
The structure of International Financial Institutions (IFI) has been called into question in recent times. Despite moves to address some of the structural imbalances which exist – for instance increases in quotas for a number of countries in the IMF – such organisations have been prone to criticism of being ‘undemocratic’ and ‘failing to reflect the world in which we live’.

But while the concept of ‘one dollar, one role’ sits uncomfortably with the ideals of a democratic institution, IFIs face perhaps an even greater challenge – not one of governance, but one of vision.

“What can the International Financial Institutions do for developing countries?” Stetten asks.

“In the 80s and 90s, they attached conditions that really shaped political processes in a number of countries. However, what we have observed today is that has gone away, and has reduced the influence of the institution in a great way. A lot of work they are doing is highly relevant and has a lot of value, but a lot of institutions find themselves in a totally different policy environment and I think that is something that they cannot ignore.”

Gone are the days when IFIs effectively held a monopoly on international development. New donor countries such as China and Brazil, together with multi-billion dollar development foundations such as Gates and Ford, have transformed the international development landscape.

Chinese Ambassador Liu Giujin, for example, has spelled out an ‘alternative’ approach to international development; one that involves South-South co-operation and triangular co-operation in key areas such as trade, investment, science, technology and infrastructure.

“The old club of countries dominating development policy is breaking up,” says Stetten. “This has repercussions for everybody involved – it is interesting times for all the sectors.”

The increasing plurality in international development has led to concerns, notably of China’s approach to the current political and humanitarian turmoil in Dafur. Furthermore, the role of the private sector in development has been called into question as to the impact that private firms are having on national policies.

Stetten describes a “tug of war” between development ideologies, but stresses that while there are new challenges for the international community to face up to, increasing plurality also presents great opportunity.

“We should not shy away from this. Everybody should be self-confident enough to say ‘yes – it is a new situation – let’s at least enter into it in a positive way and see what comes of it’.”

The G8, then, needs to recognise the principle of competitive pluralism – that there is not a single way forward. Indeed, in just two decades, Stetten believes international development could be operating in a “totally different environment”.

Here lies the challenge for FES. In promoting ideas and basic values of social democracy, it is necessary to lift the fog on what policy decisions could work. This is the keystone of the Foundation’s work.

“What you see in all the major international institutions, you have a deadlock,” says Stetten. “The WTO process is stalled. IFI is in a challenging situation. There is little appetite for a major reform of the UN.”

Indeed globalisation is at a critical juncture given the pressures on both national and international interests. Many parts of the developing world are increasingly disenchanted with the outcomes of globalisation, whereas the major beneficiaries such as China wish it to carry on full steam ahead.

“We need to grapple with the question of what this means for political discourse,” Stetten says. “In a sense, you have a reversal of the whole debate and that is something that we have to respond to in the work we do.”

He returns finally to the importance of co-operation. The creation of a G-N, where the leaders of advanced industrial countries, middle income countries and developing countries gather together to discuss informally the major issues facing the world, is something that should be given priority.

“It is important to develop vigorous debate and exchange of ideas,” Stetten explains. “This would be good news for the developing world and good news for civil society organisations. Widening the debate would play a very constructive role in international development policy.”

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