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Challenges for Global Governance in 2013

Authors: Michael Fullilove, Executive Director, Lowy Institute for International Policy Richard N. Haass, President, Council on Foreign Relations Robin Niblett, Director, Chatham House Jiemian Yang, President, Shanghai Institutes for International Studies Igor Yurgens, Chairman, Institute of Contemporary Development
January 7, 2013

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Editor's note: This roundup is a feature of the Council of Councils initiative, gathering opinions from global experts on major international developments.

From the Iran nuclear crisis to global economic woes, the upcoming year will pose steady challenges to international bodies seized with maintaining peace and prosperity. Experts from four leading think tanks weigh the issues.

Michael Fullilove, of Australia's Lowy Institute for International Policy, says China must assume "the responsibilities incumbent on a global power" but China's vision of "stepping up" will not be the same as that of the United States.

In addition to the crisis in Syria and Iran's progression toward nuclear capabilities, CFR President Richard N. Haass identifies trade, cybersecurity, and climate change as major governance tests.

For Chatham House's Robin Niblett, the ongoing crisis in the eurozone, troubled transitions in the Middle East and North Africa, and multilateral security concerns in East Asia present three formidable challenges for global governance in the upcoming year.

The Shanghai Institutes for International Studies' Jiemian Yang says governance priorities are strengthening existing institutions, forging consensus between state and non-state actors, and harnessing regional efforts in areas like trade into common global action.

Similarly, INSOR's Igor Yurgens identifies three issues—the continuing turmoil in the Middle East, environmental concerns, and the growing wealth gap—that will have serious implications for global governance.

Michael Fullilove, Executive Director, Lowy Institute for International Policy

The world's greatest global governance challenge is to establish shared responsibility for the most intractable problems of our post-unipolar world. Much of the world chafed against the United States' enormous relative power in the first decade after the end of the Cold War. Many enjoyed its grievous overreach in the following decade. But now, more capitals need to assume the role of "responsible stakeholders" that was urged on Beijing by Robert Zoellick in 2005.

China serves as the most pressing example of a country that must embrace its growing power in the international arena. Beijing has been more active in its dealings with the international community in many positive ways. Yet, it has so far demurred from assuming the responsibilities incumbent on a global power, and nurturing the international system it hopes to help to lead.

In the UN Security Council chamber and other forums, China is increasingly willing to take the lead and behave more like a great power. On the other hand, it remains disengaged from issues that do not trespass directly on its core interests. It is largely preoccupied with protecting its interests and those of its allies rather than projecting its influence, or doing much to strengthen the international system.

The Iran nuclear issue is only one example. Beijing's interests on Iran are not, of course, identical to Western interests. Yet as a key player in the international political and economic system, it is giving insufficient weight to the great risk posed by an Iranian nuclear bomb.

China has changed the way it does business, but it continues to define its national interests narrowly and pursue them with an uncompromising resolve. China wants respect, but not responsibility. It is reluctant to bind its own freedom of movement and subsume it within international institutions in the way the United States did after the Second World War, even though Washington's relative power was far greater than Beijing's is now.

As China's wealth and power grow, so will its interests expand. A middle-power foreign policy is inadequate for a great power. If China is to help run the international system, then it has a stake in strengthening it. I suggest respectfully that China and other rising powers need to strike a new balance between their traditional economic and security concerns and the broader imperatives they must now satisfy, including stable great-power relations, non-proliferation, and developing their international prestige. The old principle applies: with great power comes great responsibility.

On the other hand, the West needs to be careful what it wishes for. Western countries want rising powers to be more responsible and active, but they don't necessarily like it when such powers are more assertive. U.S. officials often say that China should "step up," for instance. But China's vision of "stepping up" will not be the same as the United States'. How would the West feel about rising powers wading into the Middle East peace process, for example, or participating in "coalitions of the willing" that intervened in other countries?

In other words, the responsibilities--and the prerogatives--of stakeholders are open to interpretation.

Richard N. Haass, President, Council on Foreign Relations

There are a number of issues where the gap between existing global challenges and the arrangements meant to manage them remains considerable to say the least. On this score, 2012 was revealing: Syria suggested that international support for the principle of R2P was mostly rhetorical, while Iran's steady progress toward a viable nuclear weapons program underscored the many inadequacies of the nuclear non-proliferation regime. These issues will continue to pose major challenges in the new year. Here, though, are three additional tests for 2013:

Trade

The Doha Round is all but dead. This is troubling news both economically (trade being a major engine of growth and job creation) and strategically (trade being a major deterrent to reckless political-military behavior that would threaten the benefits that accrue from economic ties). Plus, certain issues like government subsidies should be tackled at the global as opposed to regional or bilateral level. What is needed then are consultations among select developed and developing states alike that could set the stage for global negotiations regarding services, agriculture, and subsidies, in addition to the more traditional trade agenda.

Cyber

This is, in some ways, the newest international frontier. Given the speed of technological change, it comes as little surprise that there is little in the way of governance. Indeed, this realm is reminiscent of the early years of the nuclear era before arms control policies introduced some rules of the road and limits. But there is also the danger that some forms of regulation could be worse than none. So the international challenge will be how best to maintain a free flow of information while limiting various forms of "cyber-aggression" without giving national governments license to curb the flow of information for political purposes.

Climate

It is becoming increasingly clear that efforts at mitigation are not just falling short but that the gap between what is needed and what is likely to happen is widening. Prospects for a grand bargain here look as remote as they do in the trade and cyber realms. This argues for developing a multi-pronged approach to deal with the problem (i.e., slowing deforestation, increasing reliance on nuclear power, sharing technology to promote cleaner coal, introducing a carbon tax, etc.), as well as increased international efforts to help vulnerable countries deal with the effects of climate change--that is, adaptation.

Robin Niblett, Director, Chatham House

Decision-makers around the world will face a complex international environment in 2013. The following will be among the top global governance challenges:

Avoiding a Lost Decade in Europe

Europe's leaders took important decisions in 2012 to create a banking union and financial back stops for deficit counties. While a euro collapse is even less likely in 2013 than it was in 2012, European leaders now confront the deeper challenge of closing the competitiveness gap between creditor and debtor countries. Although structural reforms are under way, reintegrating EU financial markets to provide the necessary pools of credit for future growth remains a major concern.

Responding to this challenge is vital to global governance for the simple reason that international stability today depends upon the proper functioning of a multipolar global economy. Europe, China, and the United States have emerged as the three critical hubs of economic growth. If European leaders fail to implement structural reform and drift into a lost economic decade, then the pressure on Chinese and U.S. leaders to succeed in their own economic and fiscal reforms will increase commensurately.

Troubled Transitions in the Middle East and North Africa (MENA)

The sequencing between political and economic reform will do much to determine whether the uprisings across the MENA region will develop along positive or negative trajectories in 2013. Egypt's President Morsi has gambled that by forcing through rapid constitutional reform so that his Islamist government can now concentrate on delivering economic growth. In contrast, the secular-Islamist coalition government in Tunisia has decided to focus its efforts on building consensus on broad political reform as the prerequisite for stable economic growth.

Both approaches carry significant risks, and Europe, the United States, the IMF, and World Bank will need to support these precarious transitions more actively during 2013 with financial assistance, market opening incentives, and support for foreign direct investment.

Multilateral Security in East Asia

Last year ended with Japan and China in a diplomatic standoff over the Senkaku/Diaoyu islands that is likely to persist into 2013. The Chinese leadership appears unwilling to countenance a return to the "status quo ante" of Japanese sovereign control of the islands. At the same time, the new Japanese Prime Minister Shinzo Abe has campaigned on taking a hard line toward China's new demands.

China's approach to the islands reflects a deeper strategic decision to strengthen the lines of communication in and out of the Chinese coastline for its ever-growing energy needs and robust maritime trade. These developments underscore the need for an inclusive, multilateral security architecture in East Asia. How to create such an architecture in a region that is in the midst of a fundamental rebalancing of economic and political power deserves to be at the heart of thinking about global governance in 2013.

Jiemian Yang, President, Shanghai Institutes for International Studies

Strengthening existing international institutions is essential to implementing true global governance. More often than not, institutions like the UN, WTO, IMF and G-20 appear too slow and ineffectual to tackle the world's most pressing problems. It is time that their guiding principles were earnestly implemented and existing frameworks properly exploited. Rather than issue more declarations, they must aim to produce more concrete results, especially in the areas of promoting a global economic recovery and helping to resolve the debt crises in the eurozone. In the coming years, the G-20 will have to show the world that it is capable of evolving into a more effective and accountable institution. Many are also watching to see if the UN can assume role in dealing with the flash-point issues around the world.

A related challenge is that the international community lacks the necessary consensus to work out concepts, norms, and approaches in addressing myriad issues ranging from nuclear security to the growing influence of social media. For one thing, major powers are often reluctant to engage less prominent stakeholders, making it difficult to forge common visions and joint efforts. In addition, the much-advocated "networked governance" among state actors and various non-state actors is making slow progress because most state bureaucracies, out of self consideration and systemic inertia, still prefer formal institutions centered on themselves. As a consequence, new mindsets and functioning mechanisms that are keys to global governance are hard to develop.

The third challenge involves harnessing regional efforts into common action on the global level. Discouraged by the stalemate of global governance building, many countries and regions are now turning to regional and sub-regional integration, which explains why we are seeing more regional and sub-regional free-trade agreements. If such a trend cannot be reversed in a timely fashion, then there will be no global governance in its real sense.

Despite the unprecedented challenges facing the global community in the second decade of the twenty-first century, the world should not be dispirited. The upcoming year promises fresh political and economic momentum as new leaders settle in and people around the world continue to seek more peace, development, and cooperation.

Igor Yurgens, Chairman, Institute of Contemporary Development

The international community must confront a complex set of security, ecological, and sociological challenges in the coming years. We are at a real crossroads, and must choose between sustainability and further decline with drastic consequences.

Security Risks

The continued deterioration in the Middle East challenges the principles of global governance and their efficacy in the near future. The region is wrestling with a number of issues, including the autonomous actions of emerging powers, the rise of non-state actors, and the proliferation of large-scale civil wars. The tactical interests of key players preclude common ground for decisions that are strategically vital for all sides and risk opening a Pandora's Box of nuclear proliferation problems with dramatic implications for global security.

The absence of adequate capabilities for resolving these problems threatens to unleash a "domino effect." Also, even with the progress being made in other parts of the world, the inability of the international community to cope with this region's challenges threaten to undermine global governance.

The course of events is precipitating. Next year will most likely be a turning point in the Syrian crisis. The further strain around a likelihood of conflict with Iran along with growing internal challenges in other regional countries will likely also heat up the international agenda.

Ecological Risks

Scientists have identified nine planetary boundaries that are essential for human life and should not be crossed. They estimate that we have already pushed past three, including climate change, nitrogen loadings, and the rate of biodiversity loss. The other six--ocean acidification, stratospheric ozone, aerosol loadings, freshwater use, land use changes, and chemical pollution--also appear to be approaching their tipping points.

Sociological Risks

High measures of income inequality around the world are strongly correlated with dangerous social trends in all societies. In turn, greater equality of income correlates with better social indicators across the range. These observations are based on analysis of U.S. and global developments [Note: From research by British academics R. Wilkinson and K. Pickett in The Spirit Level: Why More Equal Societies Almost Always Do Better, London, Allen Lane, 2009].

The data has covered physical and mental health, educational performance, child well-being, trust and community life and social mobility, teenage births, obesity, drug abuse, violence and imprisonment. Even the privileged in countries with income inequality suffer from higher societal problems than their peers in more equal societies.

These risks must be dealt with head on in the new year. They will continue to challenge global governance and its ability to provide stability in the world, but the nature of these risks also shows the limitations of national governments. Some of these issues should be discussed in the course of the preparation of the next summit of G-20 in Saint-Petersburg in September 2013.

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