Rebeca Grynspan: “Global Governance Advancing or Receding?”

Dec 17, 2012

Opening Remarks for Rebeca Grynspan
United Nations Under-Secretary-General
And United Nations Development Programme’s Associate Administrator
at the Global Governance Policy Forum
“Global Governance Advancing or Receding?”

17 December, Beijing, China

Dear Chairman Zeng Peiyan,
Vice Chairman Zhu Zhixin,
Assistant Minister Ma Zhaoxu,
Distinguished guests,
Ladies and Gentlemen,

I thank the China Centre for International Economic Exchanges for partnering with the United Nations Development Programme (UNDP) to bring all of you together today as concerned policy makers and leading experts. It is a great pleasure for me to have this opportunity to focus on a topic of central importance to the countries and citizens around the world.

As the UN’s largest development organization, UNDP believes that developing countries do and should increasingly play a crucial role - both to shape and deliver global governance and that this entails opportunities but also new responsibilities. We also appreciate that China is uniquely well placed to promote this discussion. As one of the emerging powers benefiting from the established world economic trading system, China has an important role to play in improving global governance and strengthening the global rule of law.

At a critical juncture on both domestic and global levels, this High-Level Policy Forum is an example for concrete collaboration between China, the UN and various partners from different continents that provides input to the development of China’s own position as a leading figure in thinking and shaping global governance.

We also believe that it is important to increasingly tap into the special expertise available in national and transnational think tanks and academic institutions. UNDP is working to contribute to make such connections across its country offices and global networks and through events like this one.

Is global governance advancing or receding? – let me first highlight some of our most pressing global challenges and the measures key institutions are taking to adapt to current realities and end with 6 messages to make global governance  more effective, legitimate, accountable, and inclusive.

Our evolving and increasingly global challenges

Recent events have left countries and people across our globalised world acutely aware of our growing interdependence. Never before in the history of human civilization has the world been more interconnected.

The crisis generated in the markets of the north spread to all corners of the earth, and although with different impacts in the developing world, it has affected the poorest and most distant nations that saw weaker demand and lower prices for their exports, higher volatility in capital flows and lower remittances. Volatile global food prices and spikes in the prices of food are catastrophic for poor people and countries –triggering political crisis and in some cases irreversible development setbacks. Global warming threatens to make such spikes commonplace.

Trans-border challenges - from global warming, to the spread of pandemics and transnational crime – make all our futures more uncertain. For the poor and vulnerable, however, the impact of this uncertainty is manifold.

Climate crisis is also hitting the poorest the hardest. Sadly, over the past decade, more than 200 million people annually have been affected by extreme weather and climate-related disasters and much more is coming from malnutrition to water shortages if we do not change our ways.  Yet the climate agreement the whole world needs remains elusive, despite the UN’s own best efforts and commitments and greater economic and financial global  stability is unlikely to be achieved in the absence of more coordination,  regulation and oversight.

Developing countries also bear the brunt of the stalemate in the WTO’s Doha Round. They have the most to gain from accessing currently protected markets, and they have fewer cards to play in bilateral trade negotiations.

Our increasingly multi-polar world is struggling to come to terms with what it will take to address these complex multi-faceted issues – and more - in the face of divergent perspectives, fragmented institutions, and abundant rivalries that limit our ability to provide for essential global public goods.  Scholars point to the difficulties of existing power structures, from the G20 to regional bodies to produce well-coordinated policies and common approaches to shared challenges. 

Economic globalization has outpaced political globalization. Many dimensions of global governance today are suffering a legitimacy crisis due to democratic deficits.  Overall, the number of global problems requiring international cooperative solutions has expanded much faster than the capacity and needed speed to deal effectively with them, affecting  their credibility and perceived effectiveness: more and more people are questioning the actions, processes and leadership of global governance institutions.

And yet, globalization has also brought new opportunities. The last two decades have seen the rise of major emerging powers, and the elevation of a host of other developing countries to middle-income status with an unprecedented decline in extreme poverty rates. China’s extraordinary trajectory very well illustrates this reality.

The rise of the emerging economies and their growing geopolitical importance is putting real weight behind solutions driven from the perspective of the South and different paths and policy options to development. A changing geography and geometry of the cooperation space and an increased intensity in South-South and trilateral cooperation attest to that.  In addition to a more multi-polar world, non-state actors have also taken the global stage making it necessary to engage global civil society and the private sector.

The IMF predicts that by 2016, emerging markets will produce around 40% of world output. South-South trade is growing on average by 12% per year and now accounts for 20% of global trade, and as more developing countries enter Middle Income Country status, we are witnessing a dramatic expansion of the middle class in the South shifting not only production but also consumption patterns and purchasing power .

As the managing director of the IMF recently mentioned, “economic power is spreading from west to east and prosperity has begun to move from North to South”
Global coordination – involving both developed and developing counties - is increasingly needed both to tap new opportunities and overcome shared challenges.

To facilitate greater coordination developing countries will need to play a larger role on the international stage.

China and the emerging economies have a lot to offer for making this happen. In China’s case, its size and great diversity enable it to understand global problems from different perspectives.  The fact that the country is experiencing several stages of development concurrently – with some regions rivaling developed nations while others are still battling the war against poverty makes it an important partner for bridging between developed and developing countries and for ensuring that the voices of developing countries are heard and reflected in Global Governance systems outcomes.

Adapting global governance institutions

In adapting global governance institutions to these new realities and unchartered territory, never have the groupings and mechanisms for global governance been so numerous.  The global governance institutional landscape is now exceptionally crowded with every type of grouping and mechanism imaginable – a festival of variable combinations.

This may have solved some issues but it also created new difficulties so, while recognizing that new fora like the G20 and the BRICS are trying to increase their effectiveness and contribution, they only represent a portion of the world’s reality, so they have a role to play complementing the formal multilateral system but cannot be a substitute. So it is necessary to improve the dialogue and co-ordination between the UN, the Breton Woods Instituions (BWIs), and the G20 to avoid further fragmentation that could end up undermining the effectiveness of global governance altogether and postpone the need of reform in the institutions we already have.

There is, in the end, no substitute for a strong UN despite its efficiency challenges: it is still the most representative global institution. If it did not exist, it would have to be created.

The UN and its funds, programmes, and agencies, taken as a whole, enjoy unparalleled legitimacy. This enables it to set standards, help spread norms, and act in politically sensitive situations as well as  invest in global public goods – in a way that bilateral actors are sometimes unwilling or unable to do.

Steps to more inclusive & effective global governance

Let me finalize with 6 messages towards a more inclusive & effective global governance.

First, we need to pursue efficiency and effectiveness of existing multilateral institutions through firm and additional action towards reform that will combine legitimacy with increase effectiveness.

A strengthened and supported UN must continue its on-going reform to better address the complexity of global challenges efforts and avoid paralysis and disappointment that in turn may increase the incentives for the search of more informal mechanisms.  For example, a more robust Economic and Social Council will strengthen the UN’s role in global economic governance, and improve dialogue and co-ordination between the UN, the BWIs, and the G20.

 A better articulation between the formal and informal mechanisms will be also needed.  The informal mechanisms have a role to play but cannot be put “at the helm of the system” where only the UNS have the legitimacy derived from its universality.

Second, more representation, accountability and transparency: a new role must be defined for developing countries, not as recipients of prescriptions and solutions, but as active partners in the process of formulating and implementing policies with global reach. More must be done to ensure that global institutions are representative and inclusive, and that they function in a manner that reflects current geopolitical and economic dynamics.

The reforms in the International Monetary Fund adopted in 2011 including quota increases for 54 countries, placing Brazil, Russia, India and China among the top 10 shareholders and enhancing low-income countries’ decision-making at the executive board, is a step in the right direction, but more is needed.

But it is not only inclusiveness but also transparency and accountability. Mechanisms to hold these institutions to account are therefore key.

Third: The positive impact of developing countries in shaping more fair, open, transparent and accountable institutions would be enhanced by greater unity among the South so they can better leverage their voices.  China has a pivotal role to play in helping the developing world take full advantage of and create opportunities to improve global governance mechanisms   

Fourth: one reform, for which UNDP has been a strong advocate, is to ensure newglobal governance arrangements in support of the sustainable development agenda that resulted from the Rio Plus agreements and the debate on the post-2015 development objectives. Better co-ordinated action is urgently needed to address global warming and climate change which are among the most visible 21st century challenges.

More of the know-how, experience and assistance for developing countries will need to come from across the Global South as a complement and not a substitute to the traditional forms of cooperation. The UN development system is well positioned to partner with developing countries, as it is doing here in China, to facilitate such south-south cooperation.

Fifth, coordination and policy coherence between global governance institutions must improve. Decisions to address global challenges taken by different global institutions are not always consistent. Greater policy coherence between and within the UN, the International Financial Institutions, and the G20 would be desirable.

And sixth: We need to highlight the importance of leadership, and the capacity to embody a vision and inspire a large constituency of stakeholders to act in the global interest not only in international speeches but also in the national context. As our UNDP Resident Representative here in China puts it, we need to move collectively from “me and mine” to “we and ours”. 

At a time when we share an unprecedented number of environmental, social and economic challenges, there is a tendency to stress potential of failure. Many raise the alarming prospect that reforming global governance systems could result in bitter rivalry between old and new global powers. I would argue that we should rather be alarmed by the prospect of not working together in an era  of unprecedented interdependence, where global public goods cannot be secured and protected by any one nation alone - emerging threats and challenges make unavoidable coordinated responses. The optimists among us will see a historic momentum that allows us to reshape global governance for the benefit of present and future generations.

To this end - we at UNDP look forward to continue working with China and  with all  partners around the world. 

UNDP Around the world