As nations skirmish

We live in a world of rising global angst, with a slew of global problems defying solution. Nobody knows what will happen to key global currencies even a year from now.

By Kishore Mahbubani (World View)

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Published: Sat 27 Nov 2010, 9:59 PM

Last updated: Thu 2 Apr 2015, 10:29 AM

Unemployment remains persistent in several developed countries. Social dissatisfaction is rising. Global warming defies a solution. Global terrorism continues.

Against the backdrop of this rising global angst, the leaders of the 20 most powerful countries met in Seoul on November 11 and 12. Other than the release of fanciful communiqués and statements, nothing happened. The overwhelming consensus was the G20 leaders essentially failed to address the key global challenges we face. This failure should not come as a surprise, and a simple structural reason explains why.

The world has changed fundamentally. Humanity hasn’t. Or, to put it more accurately, humanity has not changed its organising principles to deal with a changed world. A simple metaphor demonstrates how fundamentally our world has changed. Before the contemporary era of rapid globalisation, when humanity lived in 192 separate countries, it was like living in 192 separate boats. Hence, all the world needed was rules to prevent collisions. The 1945 rules-based order did just this, while also allowing for some cooperation. Today, as a result of a shrunken world, humanity no longer lives on 192 separate boats. Instead, all 7 billion of us live in 192 separate cabins on the same boat.

And though we live on the same boat, we have no captain or crew to manage the boat.

None of us would dream of sailing out to sea on a boat without captain or crew. Yet, this is precisely what humanity is doing with Earth as we sail into the 21st century. Global problems require coordinated global actions to solve them: from financial crises to global warming, from pandemics to global terrorism. Yet, despite this, we shy from creating institutions and processes of global governance. Note, global governance is not global government. Despite this crucial distinction, no national government dares to espouse greater global governance.

If a boat catches fire on the high seas, it’s sheer folly to lock ourselves inside our cabins to protect ourselves. We must step out of our cabins, cooperate with other passengers from other cabins and extinguish the fire. And we did do this once recently. At the height of the recent global financial crisis, the G20 leaders stepped out of their cabins, and at the April 2009 G20 meeting in London delivered a strong coordinated response, quelling the financial fires about to engulf the global boat.

Having succeeded once, the G20 leaders were expected to behave as though it was their responsibility to take care of the boat. Sadly, when the crisis was over, the G20 leaders retreated back into their cabins. This is why Seoul failed. This behaviour was not irrational. The G-20 leaders are elected by the occupants of their cabins, not by the occupants of the boat.

This simple metaphor of the boat provides a powerful explanation of the world’s fundamental troubles. When sailing on the high seas, no captain would allow the passengers of any cabin to jeopardise the interests of the boat. But in the current organising principles of the global order, we allow the occupants of privileged cabins to carry out activities that endanger our global boat.

Consider the persisting global financial crisis. The leading legislators of the most powerful cabin on the boat, namely the US Congress, are convinced that the global economic crisis would be solved in one stroke if the Chinese government revalued its yuan by 15 to 20 per cent. By contrast, most economic studies show that any such revaluation would have a minimal effect on persistent US trade deficits. Looking for a scapegoat, the US legislators pick on the Chinese government.

The politicians do not want to focus on how their own actions jeopardise the economic fortunes of the US. The US needs to reduce its indebtedness. Congress could make a big difference by severely reducing budget deficits. And it could do this by shedding expensive agricultural subsidies and earmarks added to every budget. The recent bipartisan commission, chaired by Democrat Erskine Bowles and Republican Alan Simpson, suggested some bold steps the US Congress could take. However, to take any of these, members of Congress would need courage to stand up to special interests. Since courage is in short supply in the US Congress, China provides a convenient scapegoat to avoid focusing on the real issue.

This was the ultimate test of the G20 leaders when they met in Seoul and discussed unsustainable global imbalances. Could they revive the spirit of the London meeting and cooperate to save the world – or would they once again resort to putting national interests ahead of global interests? The sad truth about our global order is that while our national leaders sometimes come together to cooperate in response to a crisis, they fail to do the same when they confront a chronic situation. Seoul confirmed this.

Many of our current global problems are chronic problems, not crisis situations. Global warming is happening, but it’s happening slowly. Most of us won’t feel the effects tomorrow, but 20 to 30 years from now. And humanity responds to this crisis with the wisdom of a frog. Throw a frog into boiling water and he jumps out immediately. Put him in a pot and allow it to warm slowly, much like global warming, the frog will remain contentedly in the pot. The most intelligent species of our planet receives warnings about impending crises that will disrupt the lives of our children and grandchildren and yet do nothing.

The G20 leaders can take a simple step to improve their performance at future meetings. They should don two hats when they speak and perform – one as a national leader and another as a key global leader. He or she can also consistently reiterate one key obvious point. There would be little purpose served in protecting the interests of the cabin if the boat as a whole is in trouble. And many of the problems afflicting the cabins – economic disasters, global warming, pandemics and terrorism – can be solved only by coordinated global action. G20 leaders must demonstrate that they are both national and global leaders.

The leaders can also undergo a simple test to prove that they’re doing the right thing for the world. On its own, the G20 enjoys no legitimacy. The group just represents a random collection of countries, albeit some of the more powerful countries of the world. By contrast, the United Nations enjoys universal legitimacy. Hence, after each G20 meeting, a report should be filed with the UN. The pressure of submitting this report will, in a small way, remind the G20 leaders that their real mission is not just to protect their individual cabins but to protect the boat for all.

Kishore Mahbubani is the dean of the Lee Kuan Yew School of Public Policy, National University of Singapore© 2010 Yale Center for the Study of Globalisation

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