UN AND THE SHAPING OF THE POST- CRISIS WORLD: OPPORTUNITIES FOR CHANGE

PAPER PREPARED FOR THE 2010 UNAS SEMINAR ON 22 May 2010

THAM SEONG CHEE,

PRESIDENT, UNAS.

(1) INTRODUCTION

 The term “Post-Crisis” does not imply that we are presently free of the problems and challenges facing the world nor does it mean that the world economy has recovered. Its use in this seminar is merely to set the stage for a new dispensation on what needs to be done in the aftermath of the recent severe world economic down-turn. Indeed, some would argue that it is still too early to celebrate the return to normality as witness the unresolved and in some cases mounting debt burdens faced by the developed and industrialized countries in particular.  Currently, old and new tensions in international relations threaten to create widespread conflict, instability and havoc if not handled judiciously guided by the spirit of co-operation and compromise that underpin the UN Charter. Indeed, the world to-day as shown by the seemingly endless reports of corporate and banking scandals is facing a crisis of integrity and moral responsibility.. What then are the world-wide challenges that need to be addressed? How can the UN be of service in seeking solutions? What other multilateral and multi-national inputs are also called for?

Let me state at the start that the UN is not a UN if it fails to secure global peace and security; if it is unable to provide the means to meeting the basic needs of people all over the world; and if it is found to be wanting in upholding human dignity and freedoms.

Presently, three major and urgent issues or challenges confront the UN. To deal with them requires collaborative, long term and ceaseless efforts which would tax not only all the resources that member states can muster but equally critical is the unity of purpose. On this would depend the future existence of mankind and human civilization as we know it. These are: the efficient and effective management of the international economy; the collective will to address the dangers posed by environmental degradation and climate change; and the threats of weapons of mass destruction whether nuclear, chemical or biological. These are issues and challenges that the UN must provide the leadership for.

(2) THE ECONOMIC CHALLENGES

The world economy currently suffers from a number of ills. First, the industrialized economies of the West and in particular America are facing huge budget deficits and  

foreign debts The greed and shenanigans of their corporate and banking institutions have shaken the world’s monetary system to its roots High unemployment remains a threat to social stability not to mention the prospect of countries defaulting on their foreign debts and loans as in the case of Greece, Ireland, Portugal, Spain and earlier Iceland. Within the European Union, Germany’s reluctance to come to the financial rescue of a fellow EU member state viz. Greece, suggests the importance of national interest over regional solidarity though there were understandable domestic reasons for the German reaction.

A more recent concern raised by some quarters is the question of the impartiality and objectivity of credit rating agencies such as Fitch, Moody’s and Standard & Poor as whatever rating announced by them of an investment bank or the economic status of a country would have an impact on investment sentiments.

However, there is a silver lining despite the dark clouds hanging over the Western

economies. Countries in Asia, especially China, India and South Korea have not only weathered the economic recession but also now lead the process of global recovery. Japan, despite its decade of slow or stagnant economic growth remains stable because of its strong foreign reserves. The economies of Singapore, Hong Kong , Taiwan, Vietnam, Malaysia and Indonesia have also recovered and are on track to attaining higher growth.

Still, the current economic recovery remains shaky and fraught with uncertainties, the chief being (a) the absence of new ideas on how to move the process of economic recovery forward in the industrialized West (b) the apparent slow take-up rate of cheap bank credit to start or expand businesses (c) the threat of heightened inflation (d) the recourse to trade protectionism as a means to safe-guard employment and corporate survival and last but not least (e) the deep-set structural problems faced by the US in particular. In the midst of all these challenges, America has pressured its main trading partners in Asia, in particular China to revalue upwards their currencies. This poses a problem for internal development planning for developing states and understandably seen as  “interference” in the internal affairs of another country. Fear of the US dollar going into a free fall has also prompted China to make the Yuan a convertible currency of trade with some of its trading partners. China is the largest holder of US bonds, amounting to billions of dollars and as such would not want to jeopardize the value of its investments by a tit-for-tat reaction. To avoid a total melt-down of the world trading and banking systems, the US Secretary of the Treasury had sought to allay fears of an American default – the US dollar being the international reserve currency. Questions have been posed as to the relevance and workability of the much vaunted Washington Consensus (the development philosophy of the World Bank and IMF off-shoots of the Bretton Woods Agreement) in dealing with the multi-dimensional aspects of development.

It follows that the current economic recovery has given rise to several conclusions. The first is that the US and China are pivotal to the future growth and stability of the global economy. Though dubbed the G2 they do not represent the only two economies that count in this regard Still their readiness to work for mutual benefit as well as the benefit of the world at large has saved the world from economic panic. Secondly, the developed economies such as Japan and Germany as well as the developing economies of Brazil, India and Russia (the BRIC developing economies of Brazil, India, Russia and China) are also crucial to the overall effort at full recovery. Thirdly, important multi-lateral and regional organizations such as the G20 – which was convened at the height of the economic down-turn to include not only the industrialized Western economies of the past but also significantly the major emerging economies outside Europe and North America.

For the first time, there was a real global wide effort to deal with the recession that had emanated in the West. Here again, other organizations, regional and multi-lateral such as the East Asia Economic Council, ASEAN, APEC, SAARC, MERCUSOR, ECOWAS, NAFTA, SHANGHAI CO-OPERATION ORGANIZATION, AFRICAN UNION and the GULF DEVELOPMENT COUNCIL to name e few, can also make a difference through heightening resilience, expanding co-operation, trade liberalization and other necessary measures. Fourthly, there is the WORLD BANK GROUP, a UN Specialized Agency  charged with responsibilities of promoting reconstruction and development (IBRD); international development (IDA); international finance co-operation (IFC); multi-lateral investment guarantee (MIGA); and international investment settlement (ICSID). However, the WORLD including the International Monetary Fund (IMF) operates independently and outside UN jurisdiction. The head of the WORLD BANK is a political appointee made by the President of the United States, the largest donor. The head of IMF is a European. The Board of Governors of the WORLD BANK is heavily weighted in favor of the US and European states. Its economic recovery prescriptions for developing countries aka the Washington Consensus have been criticized for doing more harm than good.  The membership of the governing Board of the WORLD BANK, its development strategies and its mode of governance are matters that need adjustment in this regard.  Last but not least, is the continuing lack of movement in the Doha Round of trade negotiations undertaken by the WORLD TRADE ORGANIZATION (WTO) another UN related organization that operates by its own rules and procedures, aimed  primarily  at settling trade disputes and liberalizing international trade through negotiations among its members. The Doha Round of trade negotiations began in 2001. Ten years have elapsed since the Uruguay Round and members are still at loggerheads despite efforts made to restart negotiations. The twin key call of the Doha Round was to expand “trade not aid” to enable poor and developing countries to break the cycle of poverty and underdevelopment. The other being to safe-guard the environment through sustainable development.

What then is the role of the UN, if any, given this scenario?

It can be surmised that the major economies of the world, developed and developing, will dominate the global economic agenda. Other countries or the majority of the UN member states will have little choice but seek an appropriate niche in the scheme of things in order to survive or thrive. The G20 made up of the most powerful or largest economies of the world following the economic down-turn meets to consult and co-ordinate policies with a view to solving shared concerns and problems, in particular monetary instability and other related matters that impact on the health of the world economy. However, like the regional economic organizations mentioned earlier, it does not have the mandate or legal-constitutional standing as the UN to act on behalf of or represent non-G20 members. Moreover, the consensus reached by the G20 is likely to reflect the economic status quo as well as key interests of the developed and industriously advanced countries.

While it is noted that countries such the BRIC countries viz.,  Brazil, India, Russia and China (not to mention South Korea) are now on the threshold of economic power, yet their influence over global banking and lending institutions such as the WORLD BANK and IMF is limited. At the same time, the UN has no direct jurisdiction over these institutions and neither is there real and sustained harmonization of development focus and priorities between them. It took the WORLD BANK several decades before it finally accepted poverty eradication as of uppermost concern in planning its development strategies. Be that as it may, the WORLD BANK to date has yet to subscribe to the UNDP’s (United Nations Development Program) Human Development Index (HDI) as the more appropriate and relevant measure of development. The HDI  measures and ranks UN member states according to the level of  attainment achieved in addressing critical human needs such as educational, health, gender rights, housing, access to clean water etc. needs emphasized by  the Millennium Declaration of 2000.

It seems clear that two aspects of the current global financial structure require attention.

The first is a review of the role of the WORLD BANK and IMF in economic development and monetary stabilization. Reforms contemplated should take into full account the contributions of the new and emerging economic powers like China, India, Brazil, Russia, South Korea and others. Secondly, there is an urgency to bring about needed co-operation and co-ordination of efforts and development thinking between the UN and international financial institutions. In this regard, it can be expected that such groupings as the G20 or G8 will continue to work outside the framework of the UN given the shared interests or concerns that bind these groups together. Such an approach will naturally affect the status and perhaps legitimacy of the UN as a global organization.

Another major challenge to the UN lies in the inability thus far of the WORLD TRADE ORGANIZATION to achieve a negotiated deal arising from the DOHA ROUND. Here again the UN does not have over-riding powers to shape outcomes which depend entirely on the negotiating stances of members of the organization. And yet again, it is the major trading nations that more frequently than not either dominate the proceedings or are at variance with the poor and developing nations of Asia, Africa and South America. To be sure, domestic politics frequently play a role in shaping negotiations. But the UN’s plea for fair and open trade, if heeded can go a long way to enhance the development efforts in the economically poor countries and in the process strengthen its position as a global-wide organization promoting human rights in all its facets. Given the prospect of more and more special interest groups emerging, the UN’s contributions should be to provide a global wide perspective and at the same time afford coordinating leadership that is both inclusive and beneficial. As such the UN as a global forum for building consensus as well as moral authority for fairness and decency need to remain uppermost in the minds of policy makers.

A pertinent issue raised in UN forums is the notion of “sustainable development.” It is a notion that has become the guiding principle in all UN efforts to promote development as well as environmental conservation.

However, it does not go far enough by making a differentiation between two important concerns viz., (a) Standard of Living and (b) Quality of Life. One is not equivalent to the other. Understandably, poor and developing countries are desirous of leveling up their Standard of Living to that of the wealthy, industrialized and developed countries. Given

the limited earth/natural resources as implied by the concept of “sustainability” and the fact that both developed and developing countries are unlikely to cease pursuit of  more and more material comforts (which is as suggested by the notion of Standard of Living) can the current rate of exploitation of the earth’s resources be sustained indefinitely? If otherwise, it is timely that the concept “Quality of Life” be given a proper airing in UN and non-UN forums for it puts a halt to or at least slows down the relentless and insatiable pursuit of material things and objects not always essential to a full and happy life. The concept of Quality of Life entails balance, a concern with the intangible:

yet is spiritually, morally and aesthetically uplifting and intrinsic to a satisfactory and happy life.

(3) CLIMATE CHANGE AND ITS CHALLENGES

As in the case of the world economy, the solutions sought to mitigate the threats of climate change hinges fundamentally on the negotiated outcomes agreed upon by the parties or member states concerned. Last December (2009), the 15^th UN FRAMEWORK CONVENTION ON CLIMATE CHANGE (UNFCCC) was held in Copenhagen. This Convention or COP-15 was a follow-up of the Kyoto Protocol (due to expire in 2012) and the adoption of the Bali Action Plan in 2007. Essentially, the agenda of the Copenhagen Convention was aimed firstly at achieving post-2020 carbon emission targets set by the developed and industrialized states which have signed into the Kyoto Protocol (Annex 1 countries) and secondly, to get on board major developing and industrializing states as well (Annex 2 countries).

At the COP 15 world conference a variety of proposals and counter-proposals to reduce carbon emission or green-house gases were put forward.. Disagreements were many and they revolved broadly around (a) whether agreements on carbon reduction be made legally binding (as is the case of the Kyoto Protocol) or should they be made voluntary as advocated by the US and (b) whether agreements reached on carbon reduction be subject to monitoring and verification as advocated by the US or should they be based on self-accounting and self –regulatory mechanisms as advocated by China and India. Furthermore, there is also the vexed question of applying per capita income as a basis for determining responsibility for reducing green-house gases – a proposition that would place the developed and industrialized countries at a disadvantage. The underlying demand of the Annex 2 countries is that the developed and industrializing countries should bear not only more the burden of reducing carbon emission but also make available financial aid and green technology to mitigate the threats of climate change such as rising sea levels and destruction of forests. Developing and industrializing countries it is claimed have a right to achieve comparable standards of living as the developed and industrialized countries and should not be denied it by the imposition of punitive measures to curb carbon emission. In all this domestic politics was a factor deciding outcomes in negotiations.

Was the COP 15 a success or failure?  There was no doubt that  proponents of the environmental cause saw the COP 15 as failing to come up with concrete and tangible agreements not to mention greater commitments to take action in reducing carbon emission including (a) setting targets for reduction of carbon emission by 2050 (b) regularizing and improving the system of carbon trading (c) providing new steps on how to reduce further deforestation and biological diversity and (d) laying down clear procedures on the transfer of green-technology.  Most of these proponents were made up of NGOs, civil societies, intellectual circles and human rights organizations. To be sure such public interests groups have pushed their environmental agenda with great vigor over many years to get the policy makers to take urgent action in view of mounting evidence on the adverse effects of climate change gathered by the UN FCC. In short, they had expected policy makers at the COP 15 to work towards a comprehensive international treaty by 2050. Clearly, the absence of political will, due in large part to the diverse competing interests of the negotiating partners is to be blamed.

However, the more charitable would argue that not all is lost. The COP 15, they argue indicates quite clearly the increased sense of urgency to curb carbon accumulation. Notwithstanding detractors, there is also consensus among policy makers that common and coordinated action is called for to keep temperature increase to a 2 degree Celsius threshold. At the same time there was implicit agreement that countries represented at the COP 15 would not only continue to discharge their responsibility on carbon emission but would work towards developing comprehensive strategies in doing so. Equally, developed and industrialized countries recommitted themselves to making available and affordable technology transfers to those countries that need them. In this the COP 15  agreed in principle the establishment of an international fund amounting to US$ 100 billion per year specifically to assist countries to arrest further deforestation and coastal flooding. Granted these are not legally binding and more in line with the intangible Its effect or impact depend greatly on trust and a sense of obligation and responsibility to the larger good. Yet one could claim that there is some form of accord.

Efforts made to address climate change point to the problem and complexity of international negotiation albeit initiated and facilitated by the UN. The bottom line in international negotiations has always been subject to the pull of national interest. International outcomes or solutions adopted more often than not hinge on how member states negotiate and thus accommodate their competing interests. Yet at the same time, one cannot ignore the fact that the more wealthy and powerful member states are able to exercise greater influence on any negotiated outcome. In this regard it is to be regretted that groupings of small and medium size developing states such the G77 and the Non-Aligned Movement have yet to make a significant impact.  This also is the case with international trade and nuclear arms reduction.

(4) NUCLEAR DISARMAMENT AND NON-PROLIFERATION

The five permanent members of the UN Security Council are officially recognized as nuclear powers and as such have the right to retain their nuclear arsenals. To discourage and prevent the spread of nuclear devices the UN adopted the Nuclear Non-Proliferation Treaty (NPT) to which all other member states of the UN are invited to ratify. This treaty is in turn backed up by the UN instituted International Atomic Energy Agency or (IAEA) and under its mandate is responsible for promoting the peaceful use of atomic energy whilst simultaneously act as a watch -dog for nuclear proliferation. Another safe-guard is the informal UN Nuclear Suppliers Group consisting of 46 members whose responsibility is to set international rules for the sale and transfer of nuclear materials and technology. Besides nuclear weapons, other weapons of mass destruction viz., chemical and biological are proscribed by international treaties enacted by the UN.

As in the case of the economic challenges and challenges posed by climate change, the effective management of the dangers posed by nuclear proliferation as well as the reduction of nuclear weapons, hinges on how the five nuclear powers view their national security (including how it can be secured and maintained) on the one hand, and on the other their readiness to work together in mutual cooperation to protect the collective security of the member states of the UN. Without the latter or should they allow their national interest to prevail, other member states of the UN may be tempted to ignore the NPT for reasons of their own. And herein is the nub of the problem in efforts to curb nuclear proliferation and eventually to bring about a nuclear free world. Nuclear proliferation probably poses the most immediate danger to global security and the survival of human societies.

Currently, all five of the nuclear-armed states, viz. the US, Russia, China, Britain and France are members of the NPT. Four other states with nuclear weapons viz., India, Pakistan, Israel and North Korea (previously a member) are non-members. Another state, a member of the NPT viz., Iran is alleged to be nearing the goal of producing a nuclear weapon. Middling or second tier states suspected of harboring nuclear ambitions include Brazil, Egypt and Syria. A bright side is the fact that South Africa and Libya have formally dismantled their nuclear research programs. Of late, consequent on the US and Russian meeting in Prague to prepare a new treaty for nuclear arms reduction (Strategic Arms Reduction Treaty or START), Canada, Kazakhstan, Mexico and Ukraine have made clear commitments to working with the IAEA as well as to remove all forms of nuclear materials used or enriched from their territories.

US and Russian efforts to seek agreement on the reduction of nuclear arms production took the form of two talks in 1971 and 1972 – 1979 (Strategic Arms Limitation Talks or SALT 1 & 11). This resulted in the signing of the Strategic Arms Reduction Treaty (START 1) in 2002 and which expired in 2009. The April 2010 meeting between the presidents of the US and Russia can be regarded as START 11 which was negotiated in 1993 but not ratified by Russia. START 11 negotiated in Prague recently ended with both the US and Russia agreeing on further reductions in long range missiles and nuclear war-heads. However, the reductions agreed to is a token number as what remains in their respective nuclear arsenals is more than enough to destroy the entire world many times over. Also, the START 11 agreements reached cannot be ratified unless their respective legislatures have passed them.  Be that as it may, it is a welcomed start to achieving a nuclear free world.

The US and Russian initiative in nuclear reduction is a long term problem and will remain a challenge to both countries. In the case of the other nuclear powers viz. Britain, France and China all indications seem to suggest that they will continue to maintain the status quo ante that is to say no further nuclear build-up.

The gravest challenge to nuclear safety currently are (a) the cumulative threat of nuclear proliferation and (b) the acquisition of  weapons of mass destruction – nuclear, chemical and biological- by aggressive and despotic regimes as well as non-state actors such as terrorists and  extremists. Who knows, there may be more Abdul Qadeer Khan out there who would willingly trade a nuclear device for the right price. The situation is made more problematic should the five nuclear powers either over-ride or ignore the rules and procedures governing the sale and transfer of nuclear materials to non-nuclear states as shown by former President Bush’s decision to sell nuclear materials to India (a non-NPT member) to pursue his security agenda in Asia. This was in contravention of the functions of the Nuclear Suppliers Group. Similarly, and in a different guise, China and Russia have shown reluctance in supporting stronger sanctions put forward by the US and Britain at the Security Council against Iran for its nuclear program. In the case of North Korea the six-party talks to make the Korean Peninsula nuclear –free have yet to achieve a break-through due to the endless changing negotiating stance of the North Koreans and the preference of the Chinese and Russians for a negotiated settlement.

The threat of nuclear war between the nuclear powers has eased considerably, However, fear of a sneak nuclear attack like fear of a global economic melt-down or consequences arising from climate change remains. In order to pre-empt attacks, there is a need to have much stricter controls over the storage and transport of fissile materials. In this the authority of the IAEA should be given more bite especially in conducting regular inspections of nuclear sites and the disposal of used nuclear fuels. Further, the uranium and plutonium exporting counties should keep detailed registers of their sales. Equally, the existing terms of the NPT need to re-negotiated to ensure its effectiveness in managing nuclear proliferation.

Non-nuclear states of the UN have also contributed importantly to the efforts made at curbing nuclear proliferation through regional cooperation. It has pushed for the signing of the Comprehensive Test Ban Treaty (CBCT,1996) especially by the five nuclear powers. Regional non-nuclear states have also declared and established nuclear-free zones through formal treaties such as (a) the Latin America NFZ, 1967 (b) African NFZ, 1996 (c) the South Pacific NFZ, 1985 (d) the ASEAN NFZ, 1995 and (e) the Central Asia NFZ, 2009). All signatories to the treaties are required to adhere to the CTBT. In this the Five Nuclear Powers have been invited to support the treaties.

It can be observed that the US is currently leading the van-guard to stem the threat of further nuclear proliferation much of which is shaped by US perception of its national security and interests. President Obama is reported to have said recently that member states of the UN need not fear a pre-emptive US nuclear strike. However, he was quick to qualify himself by saying that there are exceptions to the rule. North Korea is seen as a security threat to East Asia and Iran is seen as a security threat to the entire Middle East.

The latter explains largely why the US has not welcomed the Arab proposal to make the Middle East a nuclear-free zone for this would have implications for nuclear-armed Israel which the US regards as a significant security partner. If North Korea is willing to give

up its program ( in particular the dismantling its nuclear bombs) for compensatory offers made by the 6-Party negotiating team and Iran is willing to forego its nuclear ambitions, then all other aspiring countries will take heed accordingly.

There are then numerous twists and turns in the manner the big powers manage their broader relationships with each other. These in turn impact on the whole task of handling the nuclear threat. Security Council declared sanctions, in this regard have seldom proven to be effective More often than not calculations of national security and interests intrude and which either weaken resolution or deflect intentions. The result is that there is no unity of purpose in dealing with the threat of nuclear proliferation as a danger to all. Governments representing their countries at the UN are guided by short-term domestic calculations and not usually by what is perceived as their responsibility to the well-being and survival of mankind as a whole. The necessary measures and approaches to meeting the challenges of economic break-down, climate change and nuclear proliferation are not as elusive as they seem if only governments and their policy makers have the courage and the required political will to implement them In the meanwhile and also into the future the extent of progress that can be expected in solving these challenges can only be in bits and pieces. To be sure, the big powers both established and emerging will remain crucial in providing leadership and support within the UN to ensure global security, peace and stability.