*{WHO WILL CALL THE SHOTS IN THE GLOBAL VILLAGE? [http://www.weforum.org/pdf/SummitReports/AM2000_Report_full.pdf]

BY KLAUS SCHWAB AND CLAUDE SMADJA}

Let’s face it, globalization does not reduce cultural or ethnic differences among people. People don’t get to think, react, perceive things in an identical way because they can now eat the same kind of fast food in Beijing, Delhi or Paris; or because – money permitting – they can sport the same kind of trendy clothes everywhere in the world. In fact, globalization is, in some peculiar way, heightening the need for communities and countries to assert more strongly their ethnic and cultural differences. So the real issue is not the convergence of cultures in a smoothly running global village. It is to be able to manage diversity in a context of close contact or even promiscuity of cultural identities and ethnical practices which will not melt away in any “global cauldron”.

In the same way, we know now that, left to its logic, globalization is widening the gap at the national as well as at the international levels between those equipped to benefit from it and those left on the sidelines. In the developed world, technology and finance are the clear winners of globalization while labour – in the traditional sense of the term – is a loser. So the clear challenge is one of wealth distribution in a world where inequalities are becoming even more apparent and are in danger of increasing.

And then there is the issue of who does have a say in defining and discussing the global agenda. As the Seattle fiasco clearly showed, emerging market economies and developing countries are less and less inclined to accept that globalization should proceed according to the priorities and agenda set only by the United States and Europe. They want, for instance, to be able to assess the pace of liberalization and the opening up that key sectors of their economies can sustain, especially given the weakness – and in some cases the absence – of an appropriate institutional, legal, supervisory framework. They are also concerned that when it comes to devising the rules and practices for our global systems the operating motto from the developed world sounds in too many instances like “Do what I say but don’t do as I do”.

All this boils down to whether or not we will be able in the coming years to address the major challenge of creating a multilateral system for global governance, with enough credibility and legitimacy to function as a framework for consensus building and decision-making. The worrisome factor is that in the last few years multilateralism has not progressed. Actually, for all the nice sounding commitments to it, it is on the wane. Multilateralism has been used in too many cases to provide just a convenient cover or international blessing for actions or initiatives designed with sole national interests in mind. And multilateralism has had a very hard time on every occasion when this has meant a limitation of the margin of manoeuvre of a great power, or national parliaments having to agree to an infringement on their powers.

If it is to work, a truly multilateral system will have to be able to integrate different regional sensitivities, priorities and interests, in a way which would make different countries – independently of their size or economic mass – feel that they have a good possibility of having their say and expressing their interests. If you think that this is just wishful thinking, then consider the alternative. Seattle may have been a turning point, a harbinger of things to come. The important factor here is what happened inside the convention centre. Up to now every time a negotiation of this kind was deadlocked, the assumption was that the mere perspective of everybody going back home empty handed would compel the parties to reach an 11th hour agreement – as unsatisfactory as it could be. This kind of safety net did not work last December and it will work less and less in the future. The very simple reason is that the context is changing, that emerging market economies and developing countries have drawn the lessons from the experience of the Uruguay Round. They realize that in the absence of reliable “mediating mechanisms” they will have to make their voice heard in a more significant way than in the past. If globalization is not a zero sum game, it definitely raises the stakes involved in any trade, financial, economic negotiation.

Strengthening the multilateral system is the only way to ensure that we can have an effective system of global governance. But this raises a number of issues: Can multilateralism develop with the United States being in such a dominant position in the military, economic, technological, financial domains and having a monopoly in terms of their superpower status? The US approach to multilateralism has been an on and off one. The mood among the public as well as in Washington has so far been quite ambivalent about accepting the disciplines and constraints involved whenever the go it alone option is not taken. But beyond the United States and the prominent position it assumes, a multilateral system means other protagonists able and  willing to play their role and assume their share. Will Europe at some stage be able to assert a true international identity and show that it can learn how to spell leadership? What will the terms be for the full integration of China in the world systems and how best can China be made a contributing factor for stability at the regional and international levels? Does the emergence of a new leadership in Russia mean that Moscow could become more at ease in getting involved in multilateral processes for addressing the pressing issues on the global agenda? How can the emerging economies in Asia, Latin America and Africa be made much more integral parts of the structures and mechanisms for global governance?

The creation of the G.20 structure to integrate not only the industrialized countries but also emerging market economies in economic coordination processes is definitely the kind of experience which needs to be nurtured. The present discussion on the redefinition of the role of the IMF fits into the same kind of effort towards new concepts of global governance. There is no underestimating the kind of difficulties and resistances involved in trying to put in place the new multilateral structures for global governance. There is no denying the change of mindset that this requires in the developed as well as in the emerging market countries. But there is not much alternative if we want to avoid globalization running amok, in other words becoming a very dangerous zero sum game.