It has been said that two dangers constantly threaten the world order: order and disorder. We are on the cusp of rapid global transformation. The new world order will not be an act of choice, but an inevitable fait accompli.
Consider four dominant transformational changes: the pandemic; the multiple dimensions of the climate crisis; large-scale technological challenges; and the geopolitical conflicts that threaten the whole world. While the first three are not acts of choice but inevitable consequences of both anthropogenic behavior and technological breakthroughs, the fourth, of recent origin, is the result of behavioral changes contrary to expectations.
It is now increasingly clear that this is not the first pandemic facing humanity. It would be naïve to believe that this would be the last. Although the origins of the pandemic remain unclear, there is now growing evidence based on declassified U.S. intelligence reports on Covid-19 that although theories of natural transmission and laboratory leakage remain plausible, this may also have involved handling animals that may be carriers of coronavirus. . The debate over whether the virus jumped from bats arises because “75% of new infectious diseases over time have come from animals.”
Apart from this, the recently concluded COP26 accepted that human behavior is an important contributor to multiple aspects of climate change. Skeptics either accepted defeat or backed down. Prime Minister Narendra Modi presented a commendable five-point agenda for the climate crisis titled “panchamrit” at the conference. The aim is to increase India’s energy capacity from non-fossil fuels to 500 GW by 2030, meet 50% of electricity needs using renewable energies and reduce energy consumption. carbon intensity to less than 45%, with India reaching net zero emissions by 2070.
What is undoubtedly extraordinary is the speed with which the global scientific community has responded to the pandemic by harnessing technology for vaccine production in record time. The innovation driven by scientific excellence that humanity has achieved is a harbinger of the new world order.
The institutions of global governance were created in good faith. Over time, the virus of domination by the few creators has eroded their credibility. What is worse is that the entry of China promoted and encouraged by the developed powers in the belief of a peaceful rise has damaged the objectivity of many of these institutions. However, global society cannot ignore these developments.
What links these four dominant aspects of change is to reinvent a new architecture of global governance. It involves a fundamental restructuring of the institutions of world governance which is contemporary.
Consider the following. First of all, the most important institution of global governance is the United Nations. The United Nations has undoubtedly experienced phases of reform since its founding in 1945. It has sought to respond to peacekeeping measures and development challenges, even as the organization in the post-era era. decolonization has become broader.
The existential question of the empowerment of the United Nations remains divided between those who recognize that it is only a high-level interactive forum and others who would like to make it a full-fledged global body.
One of the outsourced challenges is Asia’s inadequate representation on the UN Security Council, which many say seriously threatens its legitimacy. The only way for it to play an increasingly important role is to recognize that both political and economic power structures have undergone fundamental changes since its inception. To this end, Jeffrey Sachs suggested adding four Asian seats, namely one permanent seat for India, one shared by Japan and South Korea, one for Asean countries and the fourth in rotation between other Asian countries. It is somewhat ironic that India, soon to become the most populous country in the world, does not have a permanent seat in this key decision-making body. Whatever the decision, the current situation is untenable by granting veto rights to the new dominant power in Asia.
Beyond COP26, we certainly need a new entity like the United Nations Environment Organization (UNEO), which was suggested in the fourth assessment report of the Intergovernmental Panel on the climate change from February 2007. We also need an international convention on technology, its opportunities and minimizing abuses by aberrant member states.
Second, the Bretton Woods institutions created in 1944 – the World Bank Group and the International Monetary Fund – need revitalization and a new direction according to current needs. These would include, inter alia, a review of quotas based on the financial contribution through obscurantist practices such as limiting borrowers by country or the limited use of Article IV consultation with the government. IMF to both anticipate and respond to international crises as they arise. These and other regional banks need to integrate the need for climate finance in innovative ways both through direct lending and risk mitigation to incentivize and leverage the necessary capital flows. It seems to me that a new Bretton-Woods conference could also be convened with a new nomenclature to review the intellectual foundations of these institutions through fundamental reforms of institutional governance.
Third, the IMF itself as the main arbiter in the management of global monetary systems must have a coherent response to the emerging challenges of cryptocurrency. Many believe that this would create a multiplicity of banking and security trading systems as well as uncertainties for nations to manage their monetary and fiscal policies with consistency. The possibility of abusing the inevitable technological changes resulting from cryptocurrencies must be approached responsibly.
The fourth issue is the emergence of new technologies, in particular 5G and artificial intelligence. Recent details on what AI can do to enable nations to use hypersonic means to assert their technological prowess is just one example. How to exploit unthinkable technological changes and master them as well? We must respect the sovereignty of nations, privacy, individual rights and the nature of international agreements.
Finally, the Old World Order through which we transit welcomed the aspirations of Asia and dealt with the period of decolonization, but remained a comfortable pact of the North Atlantic powers of the United States and Europe. China’s emergence has serious geopolitical implications, not only for Asia, but, given its technological and financial prowess, for the stability of the entire social order system.
The New World Order will not be based on philanthropy. Enlightened self-interest is difficult to harness, but not just modalities of consensus in which there would be, hopefully, a voluntary relinquishment of individual and national sovereignties for the greater global good. The task is arduous but unavoidable.
(NK Singh is Chairman of the 15th Finance Committee and Chairman of the Institute of Economic Growth)