Charlie Brooker explains the news
[youtube]http://www.youtube.com/watch?v=YtGSXMuWMR4[/youtube]
Our Brookings report in The Economist
Our new Brookings report Confronting the Long Crisis of Globalization (blog post here; full pdf here) is covered in an article in tomorrow’s Economist (on the web here). Excerpt:
Now, a report for the Brookings Institution, a think-tank in Washington, DC, and the Centre on International Co-operation at New York University looks at international politics in an age of want.
The sort of problems governments increasingly face, they say, will be much less predictable than those associated with old great-power rivalries. Pressure from demography, climate change and shifts in economic power builds up quietly for a long time—and then triggers abrupt shifts.
They claim that the current global system is ill-designed for such a world. It is not just that the foreign policies of big countries are in flux. Rather, the way states deal with new threats is, in the jargon, “stove-piped”. As a UN panel said in 2004, “finance ministers tend to work only with the international financial institutions, development ministers only with development programmes.”
The authors say that what is needed is not merely institutional tinkering but a different frame of mind. Governments, they say, should think more in terms of reducing risk and increasing resilience to shocks than about boosting sovereign power. This is because they think power may not be the best way for states to defend themselves against a new kind of threat: the sort that comes not from other states but networks of states and non-state actors, or from the unintended consequences of global flows of finance, technology and so on.
What would all that mean in practice? They cite the Intergovernmental Panel on Climate Change (IPCC) and the Global Alliance for Vaccines and Immunisation as the sort of institutions they want more of: bodies that use technical expertise—leaving aside the IPCC’s mistake over the melting of Himalayan glaciers—to induce countries to recognise their mutual interests. Such agencies can promote foresight, and help governments think harder about the consequences of failure (unlike traditional diplomacy, which likes muddling along). They propose an Intergovernmental Panel on Biological Safety along the lines of the IPCC to improve biosecurity; they also suggest boosting the G20 by giving it a secretariat and getting national security chiefs together.
Many of these ideas may go nowhere; national sovereignty is hugely resilient. But to those who call the whole exercise pointless, they cite Milton Friedman, who, when monetarism was being mocked in the 1970s, replied “our basic function [is] to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes the politically inevitable.”
Q: what’s worse than being rescued than the IMF? A: China refusing to rescue you
Poor old Europe: it just goes from bad to worse. Already sore from being brutally sidelined during the Copenhagen summit last year, it now faces this addition of insult to injury:
Greece is wooing China to buy up to €25bn of government bonds, a move that underlines Beijing’s increasing financial power, as Athens struggles to fund soaring public debt. Goldman Sachs, the US investment bank, had been promoting a Greek bond sale to Beijing and the State Administration of Foreign Exchange (Safe), which manages China’s $2,400bn foreign exchange reserves, said people familiar with the issue.
That’s what the FT reported yesterday, and the news immediately set pulses racing in Brussels and Frankfurt. As Unicredit’s chief economist put it to the FT a day later,
For the eurozone, “a member country implicitly rescued by China would be an even worse signal than an IMF programme”.
But even worse, China then signalled they probably didn’t want Greece’s ropey debt anyway. Yu Yongding – who’s not only a senior member of the Chinese Academy of Social Sciences but was also a member of the Canadian-run L20 project back in the day (and hence a sort of Chinese government-licensed public intellectual on global affairs) – commented yesterday that,
It is unreasonable for an economist to support a diversification away from an unsafe asset class to a much more unsafe asset class. Let European governments and the European Central Bank rescue Greece.
Cue predictable carnage as the markets digested this news: stocks immediately fell 4%, according to the WSJ, and bond investors demanded a record spread of 3.70% between Greek 10 year bonds and the benchmark 10 year German bonds. But the events of the past couple of days are also an interesting little microcosm of larger issues, some of which are these. (more…)
Making the news
Time Magazine’s Jay Newton-Small:
It’s been frustrating then, to watch foreign, especially U.S., news crews pull up to Cite Soleil and start walking down the street with cameras and lights and audio booms. Of course, they would cause a stir. And then all it takes is one card handed out, one bottle of water given to a child in sympathy and it provokes a stampede of folks all under the misapprehension that there’s some form of aid to be had. Jostling begins and suddenly, BREAKING NEWS THERE’S RIOTING IN HAITI!!!
Personally, I have seen no real riots: after the tv crews sprint back to the vehicles the crowd disbands and everyone goes home. But the longer the tv crew remains the more violent the crowd gets: people are desperate especially when they think they’re vying for a few pieces of food or water that they may not get if they’re not out in front. The UN, for example, hired Haitians with megaphones to walk up and down the line assuring people this morning that everyone on line would receive food and water – this calms down the ones behind and stops them from pushing to the front. TV crews obviously don’t do this and, I was told by some U.S. military sources, are potentially leaving behind hurt, injured or dead from the mini-riots they incite.
Confronting the Long Crisis of Globalization
Tomorrow, the 40th anniversary session of the World Economic Forum begins in Davos, with the theme of “Rethink, Redesign, Rebuild“. To coincide with it, David and I have teamed up with CIC director Bruce Jones to co-author a new report entitled Confronting the Long Crisis of Globalization: Risk, Resilience and International Order.
The report – commissioned and sponsored by the UK Foreign Office (though not a statement of government policy) – focuses on the mismatch between new transnational threats and flawed international institutions, and argues that if efforts to develop, reform and renew international institutions continue to fail, then there is a real and under-appreciated risk of a systemic failure that sees the current period of globalization start to unwind.
There’s precedent for this, we note in the report. The ‘first globalization’ came to an abrupt halt in 1914 with two world wars and an intervening depression, having failed because:
States’ shared assumptions pushed them towards fragmentation rather than cooperation, mutual incomprehension instead of shared awareness. An epoch that that seemed to be characterized by interdependence and common interests ended in shared disaster.
Even just in the last decade, the three defining events – 9/11, the 2008 food and fuel price spike, and the credit crunch – were all about a collective international failure to manage shared risks effectively. So, we argue, states’ foreign policy doctrines need to move away from the national interest – which is in any case defined badly, if at all – and towards shared risk management.
We also set out a range of concrete recommendations in pursuit of the same ends, including:
Creating new analytical mechanisms for creating shared awareness about shared risks. E.g. the IPCC provides crucial analysis of the problem of climate change – but there’s no equivalent on the solution.
Improving the ‘bandwidth’ of the G20. E.g. by strengthening Sherpa mechanisms, and building links between the G20 and formal institutions, thus improving the range of policy options going to heads.
Setting up a ‘red team’ in the international system that has the job of exploring risks and challenging policymakers on whether enough is being done to manage them – similar to the Defense Research Advanced Projects Agency in the US, which has the job of “preventing surprise”.
Changing how governments organize and deliver foreign policy. We argue that all governments will need to spend more money on managing global risks, and do more to integrate the different elements of foreign policy (aid, diplomacy, military).
The paper’s conclusion:
The challenge facing globalization can be compared to ‘shooting the rapids’. Charting a course through whitewater, there are many possible paths, but few attractive destinations. It is the river, not the paddler, that dictates the speed with which the boat moves. There is no opportunity to pause and rethink strategy, or to reverse direction: it is the capacity to reorganize while undergoing change that ultimately determines the journey’s outcome. Above all, the challenge is a collective one: the direction of the boat depends on the combined efforts of all those on board.
The task of building a resilient globalization is similar. Much could go wrong. The pace of the transition will be dictated by the risks themselves, yet governments will only succeed if they are prepared to take the initiative. Even in the best case, outcomes will be ‘messy’ and far from perfect. Results will be determined by governments’ ability to act in concert, as well as with networks of non-state actors.
The aim should not be to balace power between competing states, but to aggregate the efforts of those willing to aim for the preferred destination, while marginalizing or excluding those who are not (including those who actively seek to capsize the boat).