Global Governance
March, 2009

Unter den Linden used to be one of the most dreaded streets in East Berlin in the former German Democratic Republic. Since the unification of Germany, this area around the famous Brandenburg Gate has become an attractive blend of fashion stores, fancy hotels, nightlife, youth, and government offices. The impressive Bertelsmann building is located at 1 Unter den Linden, where the Global Policy Council meets every year.

This year the meeting began with a dialogue between Dr Henry Kissinger and Chancellor Helmut Schmidt, moderated by Prof Josef Janning of the Bertelsmann Foundation. Besides the two stalwarts, others present included leaders such as:

  • Ricardo Lagos Escobar, former President of Chile
  • Alexander Kwasniewski, former President of Poland
  • Wolfgang Schussel, former Prime Minister of Austria
  • Guy Vorhofstad, former Prime Minister of Belgium
  • Sadig Al Mahdi, former Prime Minister of Sudan
  • Helen Clark, former Prime Minister of New Zealand
  • Jan Eliasson, former Foreign Minister of Sweden
  • Joschka Fischer, former Foreign Minister of Germany
  • Mario Monti, former European Commissioner
  • Rodolfo Severino, former Secretary General of ASEAN

A number of thought leaders were also invited. They included, among others:

  • Liru Cui, President of China Institute of Contemporary International Relations
  • Sergei Karaganov, Chairman of Council on Foreign and Defence Policy, Russia
  • Rolf Langhammer, Vice President of Kiel Institute for the World Economy
  • Yukio Okamoto, Chairman of Okamoto Associates
  • Jiahua Pan, Executive Director of Institute for Urban and Environmental Studies of the Chinese Academy of Sciences
  • Stephhen Stedman, Senior Fellow at Centre for International Security and Cooperation at Stanford University
  • Abiodun Williams, Vice President of United States Institute of Peace
  • Sundeep Waslekar, President of Strategic Foresight Group.

The meeting was most ably steered by Prof Josef Janning, a senior Bertelsmann director whose zeal for a shared approach to address the world’s pressing problems is admirable. The Kissinger-Schmidt Dialogue provided insights into the fragile nature of the world order in the 21st century. The two leaders were clearly of the opinion that the world should not to be led by any one power, either the United States or the European Union, or by a 19th-century type concert of powers. They would rather prefer an inclusive group of leading nations to work together to steer the world. The newly formed G-20 attracted attention in their dialogue as well as in the entire course of the Global Policy Council meeting. However, the G-20 is in its nascent stage and has to overcome several limitations and weaknesses. Chancellor Schmidt was particularly emphatic that any new leadership group must have representatives of not only emerging economies in Asia but also important Islamic nations.

The two leaders were quite concerned about the spread of nuclear weapons. There is a nuclear renaissance taking place with a growing number of countries planning to build civilian nuclear plants. The spread of enrichment technology would carry risks of diversion for weapon purposes. It is expected that the United States and the Russian Federation would soon announce major cuts in their stockpiles. The threat of both vertical and horizontal proliferation is serious. Dr Kissinger argued that the long-term goal of humanity should be Zero Nuclear Weapons but in the short run there would be need for a number of practical steps to prevent proliferation.

The two leaders also reflected on the global economic crisis, a major concern of the Global Policy Council meeting this year. Since the meeting was conducted with Chatham House rules, specific interventions can not be quoted. Some of the key observations made during the meeting included the following:

  • The global economic crises have raised serious questions of global governance and also regional governance in Europe. There is a risk of protectionism. There is also a risk of deficit financing to address immediate needs and this can create a burden for the next generation and crowd out private sector and social needs.
  • There is a lot of expectation from the newly formed G-20 mechanism. It can help align the interests of the developed, emerging and other countries.
  • Global economy is still an elite project with large sections of population excluded from its processes. The current crisis can be turned into an opportunity by investments in social needs of the poor, transforming the poor people into productive assets, and expanding the cake of the world economy.
  • The economic crisis should not take our attention away from energy and climate crisis. The oil prices are bound to rise once the recession is over. It would be very challenging to secure a deal at Copenhagen if it is left to professional negotiators. It would be necessary for political leaders to step in.
  • IMF needs to be strengthened. It is also necessary to explore the use of Special Drawing Rights to assist some of the countries most affected by the economic crisis.
  • Europe faces the risk of disintegration. The stability pact and the 3% deficit rule are bound to be ignored in 2009, perhaps also in 2010. It is hoped that the countries will return to fiscal discipline in a couple of years. In the meanwhile, there is a risk of the European unity being undermined by financial nationalism, whereby countries are subjecting their stimulus packages to support domestic production and discourage foreign trade even within the European Union.
  • Japan was recovering from its stagnation of the 1990s by 2008, when the crisis broke out. It may recover again by next year, as should all industrialised economies hopefully. Russia’s recovery is dependent on oil prices. Russia is examining natural resources – e.g. agriculture – as foundations of its future economy. However, the world is very much looking at the United States and China to provide leadership to the world economy. In particular, there are lot of expectations from the new Obama Administration.

Liz Mohn, Bertelsmann Chairperson and Europe’s leading media magnate, hosted a dinner. In his special dinner address, Wolfgang Schussel, former Chancellor of Austria, quoted a senior Obama Administration official to say that it is terrible to waste crisis. The overall tenor of the discussion of the Global Policy Council meeting was in support of European integration, avoidance of protectionism, inclusive globalisation and collaborative management of the world by a representative and effective group of nations. Strategic Foresight Group has been promoting this approach in all its reports, meetings and interventions in important conferences. If the current crises force the world to pay heed to such a balanced and sustainable framework, the crisis would not be wasted.