Last Updated: Friday - 09/24/2010
June 22, 2009
Global stability demands equitable change
Journey to Justice
Perhaps the UN's General Assembly president has over-reached. But how else does one move the entire world community of 192 nations towards substantial change?
Miguel d'Escoto is a Maryknoll missionary of Nicaraguan descent. I first met "el Padre" when I lived there in the 1980s, when he served as foreign minister of that Central American country. Later I was privileged to host him when he came to Canada.
Padre d'Escoto is now president of the United Nations' General Assembly and is trying to organize a three-day summit of world leaders at the UN's New York Headquarters to assess the worst global economic downturn since the Great Depression.
The UN's two major commitments, namely, to meet the Millennium Development Goals (designed to lower global poverty, enhance schooling, lower infant mortality, etc., all by 2015) and to reduce greenhouse gas emissions, are both at risk due to the global recession.
The aim of the assembly president is to remedy the international food and financial crises while addressing these two over-arching UN priorities, and to do so in ways that avoid future crises.
The last time the (then 44) members of the UN met to establish a new global financial architecture was in 1944, at Breton Woods. There, the precursors of the World Bank, International Monetary Fund and other powerful institutions were established.
D'Escoto has now accepted the challenge to direct the massive stimulus spending of northern governments towards reform of the world's economic structures so as to prevent the greed, loose monetary policy and inadequate regulation that caused such suffering in the 2008 global meltdown.
The UN process is fascinating and nowhere near successful. It hints of what is possible at this supranational level.
D'Escoto appointed a commission of experts to develop preparatory documents for the summit, and named former Nobel winning economist Joseph Stiglitz to lead it. Stiglitz, a former chief economist at the World Bank, is famous for his excoriating critique of the IMF and international financial institutions for their mismanagement of the last major economic crisis in Asia a decade ago.
The commission's March 2009 report of over 100 pages was wide ranging and challenging.
But d'Escoto followed this up with a Draft Outcome Document that was so bold as to suggest the need for eight powerful global institutions to monitor and regulate global capitalism in vastly new ways. A predictable uproar ensued.
Major world leaders balked, the summit has been postponed until the third week of June, and a new, much watered down draft has been advanced.
It is not clear, however, if the summit will now encourage the major reforms needed to address the underlying factors that contributed to the crisis, much less propose the changes necessary to avoid a recurrence.
We need to keep in mind that what began as a financial sector crisis in the U.S. has become not only a global economic crisis, but also a social crisis in the countries of the Global South. The United Nations estimates that the World Gross Product (WGP) will fall by 2.6 per cent in 2009 (the first decline since the Second World War).
The International Labour Office reports that 200 million workers will be pushed into poverty and that unemployment will increase by 30 million in 2009 over 2007 figures. Economic globalization and open markets didn't stabilize financial markets, as the experts promised they would. Rather, they helped spread the contagion.
As the Stiglitz report stated, international economic policy was designed by the IMF and World Bank to constrain the poor countries, and yet failed to constrain the excesses of the rich investment houses responsible for the meltdown.
What remains of d'Escoto's far-sighted efforts to fashion international reform is the call for a more pronounced UN role in global economic policy (through establishment of a Global Economic Council), and more coordination with the IMF and World Bank. Given that all 192 member countries would be involved, this could be an improvement over the current undemocratic architecture of the international financial institutions.
Yet, Stiglitz's proposals for a new global reserve fund, global financial regulatory authority and a competition authority will likely all die, as will d'Escoto's recommendations for global public goods authorities and a global tax authority. In their stead, seven technical working groups will be established (translation: bureaucratic language for inaction.)
The preparatory document for the summit does state the obvious: "Our globalized economic order has evolved to contain elements that are under-regulated, unsupervised and unequal; and it has proven to be unstable and unsuited for the demands of the 21st century."
What remains to be seen is if Canada and the other nations of the world actually shore up the status quo or move to implement the urgent reforms needed to provide security, equity and ecological sustainability in the years ahead.
(Joe Gunn is the Ottawa-based executive director of Citizens for Public Justice, www.cpj.ca, an ecumenical social advocacy organization.)
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