Global Utmaning

12 år sedan

Globalization does not constitute a threat towards wellfare and climate. Instead nationalism and protectionism are the real dangers to strengthening the political will to find common solutions to our global challenges. This statement was delivered by Kristina Persson, executive president at Global Utmaning (Global Challenge), in a comment to Dani Rodrik’s plea for “a sane globalization”. Dani Rodrik and Kristina Persson participated, along with Fantu Cheru from the Nordic Africa Institute, at a seminar about globalization arranged by Global Utmaning in collaboration with ABF and FUF 6/9.

”First a big thank you to Dani, for your important work to spread knowledge and understanding of Economic globalisation and what it means for mankind; in particular for your efforts to seek solutions to the important problems connected to globalisation – which is something not many of your colleagues do. On the contrary I would say – I share your criticism of the economists’ role for the development of our societies.

The global challenges and their possible impact on democracy and well-being in the long run, was the very reason why I took the initiative to create Global Utmaning/Global Challenge in 2005 and then developed into a think-tank, when I left the Central Bank 2007. I could then spend all my waking hours to make this endeavour materialise.

I am afraid that the need for political action has only increased since then, while the capacity or willingness to act among our politicians has become even smaller. Those who have been given the task to act on our behalf, in our common interest, are passive. Sweden is no better than other countries in this respect.

I keep asking myself why this is so, and I can see five major explanations:

–       First, politicians are locked into national institutions, while international organisations for cooperation are much too weak. And when the national representatives act internationally they tend to see it as a negotiating process to maximise national, short-term interests. This is very frustrating to watch.

–        Second, the challenges are global and there aren´t any global institutions or democratic structures in place to meet them. What we do have in Europe is a regional cooperation – the European Union- which should be strengthened and made more democratic, but neither politicians nor citizens care much about it; especially not now, when it is in deep trouble. Together with other regional organisations and big nations like China and USA, important problems could be solved, if we worked together.

–       A third reason for political passivity is the blame game or the notion of ‘Others’ being responsible. ‘We are not the problem, and what could little Sweden do anyway?’ Or, in the Obama case: ‘My constituency or Congress does not allow me to take the rational decisions’. I understand this better than the Swedish idea of no responsibility: Politicians want to be re-elected. Sweden should, together with the other Nordic countries, be an active player on the international scene for good common causes. Politics today is much too narrow and short-sighted.

–       Forth, the economic and political problems of the world are very complicated, so complex and interrelated that it is difficult to understand what and how to do. And to explain it to your constituency, come up with new ideas and get support for them may be even more difficult.

–       Last but not least, it is tempting to grab the wrong and populist answers, or simply deny the seriousness of the situation: ‘Keep immigrants out’, or ‘I don’t believe in climate warming’ or ‘we don’t want to pay for lazy, cheating Greeks’. There you have got three different examples. And Media is not of much help; journalists should do more to inform people about the real situation – the real problems.

The world is right now confronting enormous problems and risks both in the medium and longer term. People in this happy corner of the world may believe, that they won’t be affected but rest assured, we will.

Sweden is among the highly industrialised countries that are very dependent on trade; more than 50 % of our GNP is exports, of this some 80 % goes to Europe. So right now our politicians should be actively involved in efforts to solve the European crisis – but they are not. On the contrary they say no to all efforts and proposals coming from Brussels to solve the crisis.

There is still time to deal with the serious, systemic crises in the world, including climate warming, but for every year that passes, the chances to do so in a successful way and avoid the worst effects in terms of mass-unemployment, widespread poverty and conflicts are diminishing.

In the preparations for this year’s World Economic Forum, some 500 experts all around the world looked ten years ahead and came to the aggregate conclusion that the likelihood was very high for severe income disparities and chronic fiscal imbalances, which could result in major systemic financial failures, and that these would have a very severe impact on the global economy and the well-being of people.

These experts were no leftist thinkers or revolutionaries, they came from Business, the Academic world, Politics and NGOs. Intellectually I would say that Washington consensus is dead, but we are still waiting for the new consensus, that would bring sustainable development, to emerge.

The economy – how it is built up and works and how the incentives are constructed – is fundamental for society. It will decide if it will be possible to keep the temperature increase on earth below 2 degrees, if there will be jobs for the unemployed and decent pensions and care for the elderly. Without fundamental changes in how the economy works, our problems will not be solved, and these changes need international cooperation and coordination.

We need massive investments in new infrastructure, in renewable energy production, energy efficient housing, fossil-free transport systems; we need investments in knowledge, education, R&D, entrepreneurship and culture. This would produce millions of jobs and growth in our economies. And so would a more equal distribution of incomes.

When I say Washington Consensus is dead I am thinking of not only the discussions in Davos but also of new research from the IMF and statements from the OECD pointing at the need to create a more just distribution of incomes, increase taxes and welfare for increased stability and growth.

All these investments would cost trillions of dollars. Someone might think that we – Sweden, EU, and the US – just haven’t got the money. Wrong, there is so much money out there, being used for non-productive purposes, feeding bubbles in the interest of short-term speculation and profit. How to make the financial sector work in the interest of sustainable development in all three senses of the word – economic, ecological and social – is the huge challenge we are currently facing.

The financial markets should serve the real economy – jobs and production – not short term speculation and profits. Today we are paying a high price for this major deficiency in our societies.

Lots of people know this, still we continue as if nothing has happened – at least on the political level – just talking and agreeing on goals, values and processes, like at the recent Rio plus 20 conference in Rio de Janeiro (the goals are good!). But what the world needs now is action, locally, by nations, regions like EU and global rules. It will of course take time before global rules are really global but the three big actors, EU, the US and China, could at least try to start the process. I believe change could find support within productive business, especially the investment programs and innovation policies. Even business leaders are worried about the future.

We have through deregulation and globalisation created a world that seems to be non-governable. I do share Dani’s worries for democracy, but is it really globalisation as such that is the main problem? For me the problem is globalisation without politics and without common institutions. Globalisation has lifted hundreds of millions out of poverty. Democracy will be threatened if it does not deliver jobs, decent living standards and hope for the overwhelming majority. I don’t believe in re-nationalisation.

Nationalism is the mother of, if not all evils, many, like protectionism, xenophobia, populism and wars. I think that you are as much against it as I am, and by giving up on the multilateral road to solve problems, I am afraid that this could be the outcome. Once you open up for nations to close themselves in, against others, you also open up for contagion and spreading of protectionism.

International cooperation protects smaller and weaker nations from the abuse of the bigger, and there is scope for national industrial policies, even capital control in the WTO agreements.

It was not the outside world that deprived the Egyptians or the Tunisians from their rights to jobs and freedom; it was corrupt and greedy domestic leaders.

There you have got the true enemies of development and democracy.

We don’t need more nationalistic thinking. What we need is trust between people, cooperation and the building of inclusive institutions, both political and economic. Political solutions are necessary to solve common problems and the nations are essential for this but we also need a common rule of law to create more space for national policies to be effective.

We need rules for financial markets to avoid regulatory arbitrage, rules to prevent tax evasion – today 9 trillion dollars are in tax havens – we need common or at least coordinated environment protection, like a price on carbon emissions, and competition rules that ensure a level playing field and support human rights.

I am scared of a future where nationalism and populism take over. This is what could happen if we give up our ambitions to govern ourselves together. The more ugly expressions of it are xenophobia and the ugliest of all is war.

It has happened before, and it will happen again, if we give up. I am not going to give up. I am close to 70 but I hope to live and fight at least another 25 years to see mankind at least start doing the right thing; giving up nationalism as a way to solve problems.”