NEWS CENTER

World's leaders must rescue and fix the global system

2018-12-16
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Much of our discussions in this forum have pointed to the fact that the international order is threatened and the institutions of global governance are under attack. This did not begin with the emergence of President Donald Trump. He has given it fresh legs and a burst of oxygen by making it official US Government policy, but it had been a gathering storm long before he arrived.

The issue has been conflated with the migration and refugee crisis affecting a number of prominent countries, but it has also become a convenient target of the resentment against the political and economic establishment that is being displayed in many countries. The rules-based global framework is now in danger of being influenced and altered not by a competing global vision but by narrow domestic political issues and conflicts.

Recognizing the shortcomings of the global system

We would be making a grave mistake if, in seeking to defend it, we fail to recognize its failings and the fact that it needs to be fixed. Globalization has fallen short in delivering on the shared prosperity that it promised. In the last 20 years, the global economy has grown by 77 percent, but 16 countries alone accounted for three-quarter of that growth. All other countries, numbering more than 170, shared the remaining 25 percent, many of them hardly sharing any of it.

We must recognize, of course, that the global system is merely a framework. It was intended to provide opportunities for growth, not a guarantee of achieving it. Every country must pursue the type of domestic policies that will enable it to grasp those opportunities. But there are too many countries that have done most things right and still have come up short. When we extol the advantages of globalization, we must enquire why inequality is rising both within and among countries and what is it that has gone so terribly wrong that after 25 years, 30 percent of the world's population controls 97 percent of its wealth.

Taking charge of the reform strategy

I suggest, therefore, that our first response must be to acknowledge that fundamental changes are needed. However, we dare not leave it to the wrecking crew to determine those changes. The international community must take charge of the reform process, formulate a reform strategy and give it leadership.

That is much easier said than done, but it has to be done if we are not to descend into a state in which we each put up our own fences and operate by our own rules and standards — a world in which disputes have no uniform means of resolution, it is every country for itself, the strong survive and flourish and the weak forever struggle lest they perish.

Such a reform strategy is yet to emerge or even be the subject of constructive deliberations. The leaders of the world — from the Americas, Europe, Asia, Africa and the Pacific — need to come together as a matter of urgency to get that discussion going. The United Nations is best equipped and mandated to coordinate such an effort.

There is an abundance of empirical evidence as to what is wrong. The Doha Round that stalled 10 years ago is the most notable illustration. The stubborn resistance to reforming how multilateral institutions are governed and the way in which they operate and determine policies and priorities has to be confronted.

Inclusiveness must be a priority

The global system must become more inclusive and that inclusiveness must provide for special and differential treatment for weak, disadvantaged and vulnerable countries. Just pause for a moment to contemplate that in my part of the world, a major hurricane — and they are occurring with increasing frequency and severity — can, in two hours, decimate an entire country and wipe out all the economic progress that it took a decade to achieve. We don't have the luxury of regarding climate change as a hoax or allowing the Paris Accord to unravel.

Globalization, too, has led to unintended but consequential harm to small countries. Small size is enough of a disadvantage — it should not be a cause for disqualification. For example, the sanctions that were instituted to combat transnational financial crimes have resulted in correspondent banking arrangements for some Caribbean countries being withdrawn — not because they are accused or even suspected of facilitating such crimes, but because the volume of their transactions is too small for the corresponding banks to be inclined to expose themselves to the risks. Thus, they are shut off from the international financial system, making it difficult for them to transact business with the rest of the world, discouraging investment and hurting their economies. They must be provided for if globalization is to be worth fighting for.

I submit, also, that we must be proactive. Mr. Trump's anti-multilateralism and isolationist approach do not reflect the views of the majority of the American people. We need to engage them — the Congress, the business community, civil society, the academic and intellectual communities — those who have an appreciation for the value of our interconnectedness and interdependence.

Addressing US resentment toward China

The problems related to the current global arrangements are further complicated by the US reaction to China's cooperation outreach across the world. The US has not disguised its discomfort and disdain towards China's growing engagement, especially with countries in Latin America and the Caribbean. Its warnings to us have not been couched in diplomatic language.

We are, of course, independent, sovereign countries and we will not be dictated to in terms of choosing our friends and partnerships. But we should not even be asked to choose! We faced that predicament for more than 40 years during the Cold War when we were the wrestling mat on which Washington and Moscow tangled with each other to secure or maintain influence within the region.

We value our relationship with the US. It is our nearest neighbor and biggest trading partner. Tourism, which is so vital to our economies, is driven primarily by visitors from America. Our financial system and our credit ratings are directly affected by what Wall Street thinks of us. One-fifth of Jamaica's population resides in the United States.

But we also value our relationship with China, which has become our largest source of foreign direct investments and a major source of development assistance, second only to the European Union. Its initiatives in extending the hand of friendship and cooperation are not determined by a country's size or stage of development or the immediate economic benefits that China can derive from associating with it. In its partnership with a small Caribbean island like Antigua & Barbuda with a population of just 100,000 and with no mineral resources to offer and no market of any significant size to be supplied, China has demonstrated that it is no less committed than in its partnership with Brazil. And all these relationships have been based on the principles of mutual respect and non-interference.

The future of small developing countries is at stake

Many countries like mine were thrown headlong into the torrents of globalization for which we were far from prepared. Some of us have taken a beating. We have watched fledgling sectors of our economy battered and even wiped out by global competition that they were unable to withstand. We have undergone painful but necessary structural reforms geared at making us more competitive and fit for purpose.

China has assisted in that effort by providing concessional loans and undertaking investments in infrastructure, energy and other sectors that are helping to transform our economies. But now, just as we are starting to catch up and to be able to stand on stronger though not yet fully developed legs, we find that the global platform is wobbling, the rules are being changed unilaterally and the future is becoming increasingly unpredictable.

In the US pushback against China's cooperation initiatives, we as small, developing nations cannot remain ambivalent spectators. We are intricately involved and our own interests are at stake. We need to engage the US in a constructive, not adversarial, way to explain and demonstrate that there is no incompatibility or conflict in pursuing economic cooperation with China while maintaining and, indeed, strengthening our long established relations with the US.

The US needs to understand that if, with China's help, the economies in Latin America and the Caribbean are strengthened and the standard of living and purchasing power of our people are raised, the US will be a major beneficiary. It will mean a bigger market for their exports, more opportunities for their investors and, importantly, less impetus for migrant caravans to head to the US border. It could be a win-win situation not just for us and China but for the United States as well.

The international community needs to act now. It needs to make certain things happen in order to prevent other things from happening to it.


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