I expect there are many perspectives on the concept of global governance. The global community is awash in theories and wishful thinking as to what the manage- ment of the world should be as the 21st century unfolds.
I am privileged to have enjoyed a front row seat over the last nine years as Secretary-General of the Organisation for Economic Co-operation and Development (OECD) as the international forces play out in trade, investment, devel- opment, governance (public and corporate) and overall international co-operation, or lack thereof.
Although the OECD is composed of a limited membership of the most developed countries, it can no longer be described as the Rich Man’s Club, an image it has laboured under in the past. Now the OECD is engaged in its core work with not less than 100 non-members with very focused country programs in the case of Russia, China and Brazil. Having added Mexico, Korea and the former Soviet Bloc countries of Central Europe to its membership in the 1990s (Poland, Slovakia, Hungary and the Czech Republic), the reach of OECD work covers a full spec- trum of countries at various stages of development.
In this century, we should not anticipate the creation of international institutions on a global basis to which nation states will surrender much of their cherished political sover- eignty. But they will continue to surrender some in the con- text of increasing global economic integration. And, regionally, we may witness startling departures from the past notions of sovereignty, such as the European Union (EU). I see the EU as work in progress and a harbinger of the world to come, but not in the very near term. Why?
Put simply, there is only one superpower, the United States. The existence of this economic behemoth will slow down any movement toward a structured system of global governance, and understandably so. But for all the criticism leveled at the US for unilateral action, we should be grateful that it is the US holding such power. It is, as opposed to others, a strong, pluralistic democracy combin- ing the entire world’s races and creeds.
But the US administration has also demonstrated that when it perceives an action or policy to be in its own interests, it will try to dictate the rules of the game, as any elephant would! And this would be true of any administration in the United States, wielding the power that it does. It would also be true of any other country finding itself in such a position. This is not a moral issue, it is simply the realpolitik, true of all countries and of all time. The Hobbesian view of individual self-interest has of late been disputed by some as a misinterpre- tation of Hobbes’ deterministic views. But, in the case of nation states, it is most assuredly applied, and history demon- strates this so well.
Taking the OECD as an example, its role has been to establish strong multilateral bonds and codes of behav- iour amongst nation states. This is the defined mission of the OECD and of many other international organizations, including of course, the UN system. And, in many areas, multilateralism has been very successful. The creation of the World Trade Organisation (WTO) serves as a good example of the creation of an international body with adjudication and enforcement mechanisms. While I question the nature of these sanctions for enforcement, the fact that the inter- national community, including the US, signed on to them is positive, provided the signatories accept the results. Turning to the OECD, each member seeks to use it as a multilateral forum to pursue its own interests within a multi- lateral context. To take a simple exam- ple, the OECD Principles of Corporate Governance, and their application, are central to the smooth functioning of financial markets and the flow of cross- border investment ”” something all gov- ernments want. Or common standards for chemical testing, which obviate the necessity of each country testing each chemical, but relying on laboratories subject to OECD certification, with sav- ings to members in the multimillions of dollars. Or the OECD consensus on export credits which have greatly facili- tated fair trade. Taxation, e-commerce, competition, cartels, and so on.
There are many critical areas where nation states have been prepared to abide by international guidelines which have greatly facilitated the pos- itive evolution of globalization. But, with the exception of a few legal obli- gations, such as those of the WTO, they have maintained their sovereign right to renounce these undertakings. Would they?
Could they without retaliation of some form? We do not really know, but to this point, after many years, there are few instances where member countries have not continued to abide by these rules.
That being said, if it is clearly seen by a member that adherence to certain agreed-upon standards is not in its interest (which could mean politically not acceptable to an important domes- tic constituency), then that country might abstain from being bound. This has happened on sensitive issues like bank secrecy.
I will turn to the EU in a moment to underscore the challenge of formal- izing government international struc- tures. But, first, it is important to register the relevance to any interna- tional structure of balances of power.
In the 19th and early 20th centuries, these were seen as military strengths often combined through alliances. Territorial acquisition was still popular either to proselytize or colonize. Gratefully, those days are largely behind us. In the world today the dominant power is economic, not mil- itary, in large measure because of weapons of mass destruction. (Why Iraq and not North Korea?).
But there seems for some to be a paradox here, namely, why strengthen our competi- tors in the global economy? Is this analogous to arming the enemy of bygone years? The answer is simple. All countries need strong reliable global partners, rich enough to buy each other’s goods and services, and capable of providing reciprocal advantages of investment, technology and manage- ment skills. This means that, today, peaceful harmonious relations equate with self-interest.
That is why a dynamic, unified prosperous Europe is in the best inter- ests of the US and of the world. This was seen by the creators of the Marshall Plan but, for some in the US today, there seems to be reluctance to welcome another elephant into the international arena. That I see as short-sighted, because, in any event, the other ele- phant is entering the ring and there are at least two others in training and put- ting on weight! (China and India).
The domination of the world econo- my by the US is likely to be short by historical standards when one looks to the Romans or the British, whose domination was measured in hundreds of years. But times and technologies and globalization have changed all that. Forecasts place China as the world’s largest economy, perhaps as soon as the year 2020. India will not be far behind.
If the European Union consolidates, as it should, and enlarges, as it will, it will also surpass the USA in eco- nomic size. The result of all this will be a multipolar world, and that is to be welcomed. As well, it could be an important stepping stone to better multilateral co-operation because there would be an increasing number of elephants, and no one of them could embark upon a unilateral agen- da for fear of retaliatory consequences. Nor would there be any obvious moti- vation to do so, given the importance of deeper global economic integration.
Creating a multi-polar world is the only route to an ultimate agree- ment on a true global governance structure, whatever form it might take. I realize that this seems to echo the views of President Jacques Chirac with whom many take issue. I believe he is right, although his message seems to have been obscured by current geo-political frictions.
Now, let us return to Europe, which has learned many lessons on governance for itself and for the world. Some years back, I picked up a copy of H.A.L. Fisher’s History of Europe, the edition being 1936. Fisher was an acknowledged historian and a warden at Oxford. In his introduction, he deplored the fact that Europe had never been able to establish a stable unifying governance which could heal and transcend the conflicts which had bedeviled it for more than 1000 years.
Listen to Fisher as he concludes his articulate and powerful introduction:
these differences (in Europe) are unresolved. One by one the great attempts to impose a common system upon the energetic self- willed peoples of Europe have broken down…yet ever since the first century of our era the dream of unity has hovered over the scene and haunted the imagina- tion of statesmen and peoples.
Nor is there any question more pertinent to the future welfare of the world than how the nations of Europe, whose differences are so many and so inveterate, may best be combined into some stable organization for the pursuit of their common interestsand the avoidance of strife.
Fisher died during World War II, so he never witnessed the extraordinary evolution of Europe in the post-war period. What he dreamt of has hap- pened. And despite its problems, and constitutional inadequacies, the EU and the recent constitution are milestone events on the way to an even greater governance experiment ”” as he said, ”œIs there any question more pertinent to the future welfare of the world?”
Europe and its evolution suggests that, had there only been one major economy, the unifying multilateralism of the EU would not have happened as quickly as it has. Germany is a big econ- omy, but so are France, the UK and Italy, without reference to Spain which is join- ing the ranks of the big. All European countries had to put water in their wine and come together in the greatest politi- cal-social-economic engineering experi- ment in history. As I said, it is still a work in progress and will be for many years.
I judge that Turkey would be a wel- come addition to this assembly of nations, who have been prepared to sur- render much sovereignty, looking to a united, stronger and more prosperous future. Who could have predicted this just 50 years ago?
I hardly anticipate that the world will move as quickly as Europe to greater global unity under a quasi-federal system. It will take much time and confidence building. But I am con- vinced that it will happen as soon as a number of other major powers come on stage, notably, China, India and certain- ly the EU. Optimistically, the Middle East and North Africa combined could also constitute an important global part- ner, but that will take even more time.
It will begin with universal free trade and the necessary elimination of the jungle of bilateral and regional free trade and investment agreements. It will be further enhanced by the cre- ation of regional currencies like the euro as recommended by Noble Prize winner Robert Mundell. Ultimately, a currency will become global with the advantage of eliminating exchange rate speculation and instability. These events will sweep all countries into the mainstream of international trade and investment, with enormous positive impact on global poverty.
All of this will take time and enlight- ened thinking by the world’s leadership. With that leadership constantly chang- ing through democratic processes for the most part, momentum and continuity of purpose will be tested. But it will one day happen as Europe has shown with unity of purpose forged between countries that historically were bitter enemies ”” where the exchange of goods and services are now substitutes for bombs and bullets.
What is the role of Canada in this rapidly changing global land- scape? Canada is a middle power carry- ing much respect and moral authority. It has made substantial contributions to the ongoing global dialogue on macroeconomic management, peace and security, development and so on. By not aligning its policies in lockstep with the United States, it has also har- vested credibility through objectivity with the larger community of nations. This it must continue to do, and not blindly add its weight to create an even more powerful elephant to the south.
The US-Canada relationship is close to being the most significant in a global context. But it requires constant maintenance on both sides. Canadians should not be offended by a lack of knowledge about Canada south of the border. California after all has a GDP greater than that of Canada itself.
I see Canada as continuing the role it has assumed in the post-war period: honest facilitator in addressing international disputes and frictions, contributor of ideas on better global governance, peacekeeper and an open and generous recipient of immigrants from across the globe, who see their future and that of their children in this wonderful pluralistic democracy, where the quality of life continues to rank amongst the highest in the world.
In the OECD, we see great influ- ence on policies of members drawn from the best practices of each other. This is the best contribution Canada can make to world sustainable develop- ment, while not ignoring the practices of others that could contribute to Canadian success. Here, I think of edu- cation, health, innovation, territorial development and so on. Canada has much to offer, but also probably much to learn. But Canada has also demon- strated the strength of diversity with two official languages: Quebec, with its own guaranteed protection of language, law and religion for over 200 years, and Canadians from the four corners of the globe who have strengthened the social and economic fabric.
Prime Minister Martin has been promoting the creation of a leaders’ G20, which, as I understand the con- cept, would bring the major players to an informal gathering on a regular basis to address prickly and even contentious issues. This would be a great achieve- ment if it does not fall into the prece- dent of the G8 gatherings with formal communiqués and a 5,000-person army of media representatives, not to men- tion security and demonstrators.
Short of that taking place, Canada should be constantly examining the existing multilateral framework, includ- ing the OECD, the World Bank, the IMF, the WTO and the UN system, in particular to determine whether they are sufficiently ”œjoined up,” maximiz- ing synergies and minimizing costs.
My years of experience have nur- tured many personal views in this area which I will share with members after they have been more developed, but certainly before I leave this complex, often frustrating, but always fascinat- ing and stimulating organization.