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TRAVEL IMPACT NEWSWIRE – Edition 24 (2010) – 22 April 2010
30 Years of Distinction in Travel Journalism. Executive Editor: Imtiaz Muqbil
Launched in August 1998, Travel Impact Newswire provides unmatched, thought-provoking coverage of big-picture issues and trends that impact global travel & tourism. Distributed every week to 45,000 senior industry readers worldwide, mainly in the Asia-Pacific and Middle East.
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| In this dispatch: Travel & Tourism In the New World Order 1. World Spending US$1 Trillion A Year On Weapons, Says U.N. Chief As He Calls For Diverting Defence Budgets To Economic Development 2. International Year for the Rapprochement of Cultures 2010 – U.N. Says Intercultural Dialogue Is A Must In Ever More Connected World 3. International Mother Earth Day 22 April 2010 – Humanity Is "Seeing The Results of Drawing on Nature's Capital Without Putting Back" 4. The End Of The "Third World"? Modernizing Multilateralism For A Multipolar World -- World Bank President Robert Zoellick Says "League of Networks" Now More Necessary than "League of Nations" 5. Huge Protests Planned on April 29 for Showdown on Wall St. and at Banks Across the U.S. to Demand Financial Reform Would You Like To Reward This Effort? This dispatch is the result of dozens of man-hours expended in research, compilation, editing, structuring and emailing.
| HOW TO RESTORE THE BALANCE, FROM A UNIQUE ASIAN PERSPECTIVE "The travel & tourism buzzword of the 21st century will be the search for balance." That forecast was made by Imtiaz Muqbil, Executive Editor, Travel Impact Newswire, in the monthly strategic intelligence publication of PATA, the Pacific Asia Travel Association, way back in February 1999. Today, it is proving spot-on as the word "balance" resonates across all industry sectors today. Travel industry conferences seeking a speaker who can offer some unique historical hindsight, unconventional foresight and thought-provoking insight on the past, present and future of the Asia Pacific travel & tourism industry can contact Imtiaz Muqbil at imtiaz@travel-impact-newswire.com To SUBSCRIBE, please hit the "reply" button and request inclusion on the mailing list, providing email address, company name and title. Please inform us of any changes in email address, and add imtiaz@travel-impact-newswire.com to your list of approved senders to ensure this dispatch is not blocked by spam filters and/or does not go into the "junk" folder. Unauthorised lifting of material by other commercial media for onward distribution is STRICTLY PROHIBITED under international copyright regulations. |
Travel & Tourism In the New World Order
By Imtiaz Muqbil, Executive Editor, Travel Impact Newswire
Over the next few weeks, a series of international meetings will determine the future directions of travel and tourism in the midst of the swirling forces of change. The first will start on April 23 in Kuching, Malaysia – the Board of Directors and Annual General Meeting of the Pacific Asia Travel Association (PATA). In May, the World Travel and Tourism Council will convene its annual summit in Beijing and the Asian Development Bank will hold its AGM in Tashkent, Uzbekistan, the first time an ADB AGM will be convening in a Central Asian country.
The theme of the first event on the PATA programme on April 23 aptly describes what lies ahead. A "Meeting of Minds" seminar bears the theme "Strategies, Realities and Charting the Course of Meeting Tourism Challenges." In pursuing strategies to deal with the challenges, the travel & tourism industry has to confront the most important reality, viz., the ongoing tectonic shift in the global world order. Changing power structures are always marked by unpredictability and instability. Natural disasters such as hurricanes, floods, earthquakes and now, volcanic eruptions, do not make things easier. Environmental problems such as global warming, and potential health pandemics such as SARS and bird flu, further complicate the scenario. Man-made disasters like geopolitical and financial terrorism make the future look even more grim.
There has probably never been such a lethal combination of "perfect storm" factors in history. The fact that travel & tourism invariably becomes one of the primary victims of these crises makes steering the ship exceedingly complex.
Today, Travel Impact Newswire, the Asia-Pacific's most crusading travel industry newsletter, begins a series that will seek to place these tectonic shifts in a broader context. Industry researchers and analysts will find them very useful in helping their policy- and decision-makers chart future paths.
This first dispatch in the series features a ground-breaking speech by the President of the World Bank in which he recognises the emergence of the new world order with an air of inevitability, using terminology that would have been unheard of five years ago. The next two dispatches will focus on the changes taking place in the ASEAN region, the rise of the BRIC (Brazil, Russia, India, China) countries and future directions of the Central Asian Republics.
Overall, there is reason for optimism. Our national leaders and policy-makers have learned the lessons of past mistakes and are becoming more vigilant in their attempts to restore stability on the global stage. The United Nations, too, is becoming more assertive. As U.N. Secretary General Ban Ki-moon points out in the dispatch below, the world is spending US$1 trillion a year on armaments. Clearly, someone is profiting hugely from the conflicts that generate demand for these weapons. If conflict is never good for tourism, what does the travel & tourism industry plan to do about it?
Policy changes and leadership changes are intertwined. This week, PATA will come under the chairmanship of Hiran Cooray, a 47-year-old Sri Lankan. His country has just emerged from the ravages of a 20-year civil war which decimated travel & tourism. In turn, PATA has emerged from years of suffering the consequences of entrenched cronyism and nepotism. Mr Cooray says he will be seeking to help the industry benefit from the lessons of both experiences.
The new world offers immense opportunities for travel & tourism to redesign, reinvent and most importantly reassert itself on the world stage. That process is about to start. These exclusive Travel Impact Newswire dispatches are intended to make a small contribution towards shaping and influencing those tectonic shifts.
1. World Spending US$1 Trillion A Year On Weapons, Says U.N. Chief As He Calls For Diverting Defence Budgets To Economic Development
New York, Apr 19 2010 - The U.N. General Assembly today held a day-long debate on disarmament with Secretary-General Ban Ki-moon calling on the world to reverse its spending on weapons as compared with development. "The world is over-armed, and development is under-funded," he told the 192-member Assembly at the start of the thematic debate on disarmament and world security, and both the role of the United Nations and challenges for the international community. "Spending on weapons worldwide is now well above $1 trillion a year – and rising.
"These priorities should be reversed. By accelerating disarmament, we can liberate the resources we need to combat climate change, address food insecurity and achieve the Millennium Development Goals (http://www.un.org/millenniumgoals)," he added, referring to the ambitious targets set by the UN Summit of 2000 to slash a host of social ills by 2015, including extreme hunger and poverty, maternal and infant mortality and lack of access to education and health care.
Mr. Ban cited several encouraging trends, including last week's Washington summit on nuclear security and the signing earlier this month by Russia and the United States of a nuclear weapons reduction treaty, stressing "now is the moment to build on that momentum."
But he also underscored the need to tackle both weapons of mass destruction and the regulation of conventional armaments. "Small arms in the wrong hands destroy lives and livelihoods, impede peace efforts, hinder humanitarian aid, facilitate the illicit trade in narcotics and obstruct investment and development," he said.
"I encourage the General Assembly to continue to strengthen the implementation of the UN Programme of Action on Small Arms and Light Weapons, and make progress towards an Arms Trade Treaty," he added, referring to initiatives to prevent, combat and eradicate illicit trade in by focusing on practical solutions, such as collecting and destroying illegal weapons, strengthening import and export controls and improving the security and safety of weapons storage facilities.
General Assembly President Ali Treki also cited the recent momentum, calling for a successful outcome at next month's five-yearly review conference of the 40-year-old Nuclear Non-Proliferation Treaty (NPT) concrete steps towards the prompt entry into force of the Comprehensive Nuclear-Test-Ban Treaty (CTBT). He stressed the need to deal with possible threats from the proliferation of chemical and biological materials.
"It is also fundamental for the international community to seriously address the production, use, export and import of conventional weapons, including small arms and light weapons," he said. "If on the one hand, nuclear weapons have only been used once in the history of mankind, indeed with catastrophic effects, on the other hand, conventional weapons fuel conflicts every day around the world and constantly threaten international peace and security. Moreover, the imbalance in conventional weapons capabilities leads to threat perceptions and arms races, which in turn imperil regional and international peace and security."
2. International Year for the Rapprochement of Cultures 2010 – U.N. Says Intercultural Dialogue Is A Must In Ever More Connected World
New York, Apr 21 2010 - With the implosion of financial markets on Wall Street and the explosion of a volcano in Iceland highlighting in just two ways how the world is ever more interconnected, enhancing dialogue and understanding among peoples and faiths is more vital than ever, Secretary-General Ban Ki-moon said today.
"It is the case whether the subject is melting icecaps in one part of the world or rising unemployment in another," he told a ceremony at United Nations Headquarters in New York marking 2010 as the International Year for the Rapprochement of Cultures in accordance with a General Assembly resolution passed in 2007. "Like never before, global challenges have local impacts. Local events can have global impacts. This compels us to strengthen cooperation – expand the space for dialogue – and replace barriers of distrust with bridges of understanding."
Mr. Ban stressed that this fundamental reality is also the raison d'être of the UN. "Quite simply, we are in this together," he said. "Dialogue among cultures, civilizations and religions is crucial to fulfilling the central objectives of the United Nations Charter, upholding human rights and advancing development."
Greater cultural understanding can help provide the commitment, focus and cooperation required to achieve the Millennium Development Goals (MDGs), the ambitious targets set by the UN Summit of 2000 to slash a host of social ills by 2015, including extreme hunger and poverty, maternal and infant mortality and lack of access to education and health care, he said.
"Far too often, distrust and ignorance among cultures and faiths have been obstacles to peace and progress. So in a very real sense, promoting the rapprochement of cultures will promote the reaching of the MDGs," he declared, citing strengthened education systems, increased exposure to information, and the commitment of local governments, civil society and the media as essential planks in the effort.
Mr. Ban noted that the UN Educational, Scientific and Cultural Organization (UNESCO), designated the world body's lead agency for the Year, champions the promotion of cultural diversity and knowledge, while the Alliance of Civilizations, set up under UN auspices in 2005 at the initiative of Spain and Turkey, is striving to overcome prejudice among nations, cultures and religions.
Other UN agencies, funds and programmes are working to adapt activities to the cultural context in which they operate, while a recent Non-Aligned Movement (NAM) meeting on interfaith dialogue for peace and development in Manila, Philippines, highlighted efforts for intercultural conciliation. "It is our common responsibility to ensure that our efforts reinforce each other and lead to a greater understanding and support for the rapprochement of cultures," he concluded.
3. International Mother Earth Day 22 April 2010 – Humanity Is "Seeing The Results of Drawing on Nature's Capital Without Putting Back"
Message on International Mother Earth Day from U.N. Secretary General Ban Ki-Moon
Mother Earth – our only home – is under pressure. We are making progressively unreasonable demands on her, and she is showing the strain.
For all of human history we have depended on nature's bounty for sustenance, well-being and development. Too often we have drawn on nature's capital without putting back. We are now beginning to see the consequences of failing to safeguard our investment.
Climate change and the depleted ozone layer are among the starkest examples. Biological diversity -- the incredible variety of life on Earth that sustains us -- is in rapid decline. Freshwater and marine resources are increasingly polluted; soils and once-prolific fisheries are growing barren.
The impact of our neglectful stewardship is being felt most by the world's most vulnerable people: those who live on the desert margins; indigenous communities; the rural poor; the inhabitants of the squalid slums of the world's expanding megacities. If they are to break out of the poverty trap and prosper, they need – at the very minimum – fertile land, clean water and adequate sanitation.
Environmental sustainability – the wise management of Mother Earth's bounty – is one of eight Millennium Development Goals adopted a decade ago by United Nations Member States. The deadline for achieving the goals is 2015. This September, I will convene a summit in New York to review progress towards the MDGs and develop an agenda for action – a practical, results-oriented plan, with concrete steps and timelines. Protecting Mother Earth must be an integral component of our strategy.
Without a sustainable environmental base, we will have little hope of attaining our objectives for reducing poverty and hunger and improving health and human well-being. For these reasons and more, the General Assembly has proclaimed that each year on 22 April we will observe International Mother Earth Day. I call on all governments, businesses and citizens of the world to give our Mother Earth the respect and care she deserves.
4.The End Of The "Third World"? Modernizing Multilateralism For A Multipolar World
Speech By Robert B. Zoellick, President, The World Bank Group at the Woodrow Wilson Center for International Scholars, April 14, 2010
| Editor's Note & Executive Summary: You know that times they are a-changing when august and hugely-maligned institutions such as the World Bank begin talking a different language. In this remarkable, game-changing speech, World Bank President Robert Zoellick discussed the geopolitical and economic challenges of a new world order. Although he sought to maintain the focus on the "solutions" required in the days ahead, the speech is an indirect admission of the problems created in the past by the many policies of the World Bank itself – e.g. "the G-20…must be careful not to impose a new, inflexible hierarchy on the world"; "the danger is that we take a rule book from developed countries to impose a one-size-fits-all model on developing countries"; "avoiding geo-politics as usual means looking at issues differently"; "how will we manage a new geopolitics for a multipolar economy where all are fairly represented in Associations for the Many, not Clubs for the Few"; the new world order "requires institutions that are fast, flexible, and accountable, that can give voice to the voiceless with resources at the ready"; "modern multilateralism will not be a constricted club with more left outside the room than seated within"; and "Woodrow Wilson wished for a League of Nations. We need a League of Networks". When the winds of change begin to blow through the World Bank, the after-effects will have a downstream impact on many sectors of the global economy, travel & tourism included. The full text of this speech is being reproduced below and deserves close analysis by industry researchers and planners. |
Introduction: The End of the Third World?
For decades, students of security and international politics have debated the emergence of a multipolar system. It's time we recognize the new economic parallel.
If 1989 saw the end of the "Second World" with Communism's demise, then 2009 saw the end of what was known as the "Third World": We are now in a new, fast-evolving multipolar world economy – in which some developing countries are emerging as economic powers; others are moving towards becoming additional poles of growth; and some are struggling to attain their potential within this new system – where North and South, East and West, are now points on a compass, not economic destinies.
Poverty remains and must be addressed. Failed states remain and must be addressed. Global challenges are intensifying and must be addressed. But the manner in which we must address these issues is shifting. The outdated categorizations of First and Third Worlds, donor and supplicant, leader and led, no longer fit.
The implications are profound: For multilateralism, for global cooperative action, for power relationships, for development, and for international institutions.
Multilateralism Matters
The global economic crisis has shown that multilateralism matters. Staring into the abyss, countries pulled together to save the global economy. The modern G-20 was borne out of crisis. It showed its potential by quickly acting to shore up confidence. The question now is whether this was an aberration, a blip?
Will historians look back on 2009 and see it as a singular case of international cooperation or the start of something new? Some now view Woodrow Wilson's attempt to create a new international system after World War One as an opportunity lost that left the world adrift amidst dangers. Will this be a similar moment?
The danger now is that as the fear of the crisis recedes, the willingness to cooperate will too. Already we feel gravitational forces pulling a world of nation-states back to the pursuit of narrower interests.
This would be a mistake. Economic and political tectonic plates are shifting. We can shift with them, or we can continue to see a new world through the prism of the old. We must recognize new realities. And act on them.
What is different?
The developing world was not the cause of the crisis, but it could be an important part of the solution. Our world will look very different in 10 years, with demand coming not just from the United States but from around the globe.
Already we see the shifts. Asia's share of the global economy in purchasing power parity terms has risen steadily from 7 percent in 1980 to 21 percent in 2008. Asia's stock markets now account for 32 percent of global market capitalization, ahead of the United States at 30 percent and Europe at 25 percent. Last year, China overtook Germany to become the world's biggest exporter. It also overtook the United States to become the world's largest market for cars.
Import numbers tell a revealing story: the developing world is becoming a driver of the global economy. Much of the recovery in world trade has been due to strong demand for imports among developing countries. Developing country imports are already 2 percent higher than their pre-crisis peak in April 2008. In contrast, the imports of high-income countries are still 19 percent below that earlier high. Even though developing world imports are about half of the imports of high-income countries, they are growing at a much faster rate. As a result, they accounted for more than half of the increase in world import demand since 2000.
New Poles of Growth
The world economy is rebalancing. Some of this is new. Some represents a restoration. According to Angus Maddison, Asia accounted for over half of world output for 18 of the last 20 centuries. We are witnessing a move towards multiple poles of growth as middle classes grow in developing countries, billions of people join the world economy, and new patterns of integration combine regional intensification with global openness.
This change is not just about China or India. The developing world's share of global GDP in purchasing power parity terms has increased from 33.7 percent in 1980 to 43.4 percent in 2010. Developing countries are likely to show robust growth rates over the next five years and beyond. Sub-Saharan Africa could grow by an average of over 6 percent to 2015 while South Asia, where half the world's poor live, could grow by as much as 7 percent a year over the same period.
Southeast Asia has become a middle income region of almost 600 million people, with growing ties to India and China, deepening ties with Japan, Korea, and Australia, and continuing links through global sourcing to North America and Europe.
The Middle East region is an important source of capital for the rest of the world, and increasingly a business-service hub between Asia – East and South – and Euro-Africa. Gross official reserves of the Gulf Cooperation Council countries were over $500 billion at the end of 2008, with estimates of sovereign wealth fund assets of as much as $1 trillion. If the Maghreb can move beyond historical fault lines, it can be part of a Euro-Med integration linked to both the Mideast and Africa.
In the Latin American and Caribbean region, 60 million people were lifted from poverty between 2002-2008 and a growing middle class boosted import volumes at an annual rate of 15 percent.
Africa as a Potential Pole of Growth
Tectonic plates could shift further. Africa missed out on the manufacturing revolution that lifted East Asia's economies out of poverty and into prosperity. But Africa no longer needs to be left behind.
Today, in many African countries even small, inexpensive items, such as soap or slippers, or basic tools or consumer goods, are imported. If Africans remove the barriers to producing these goods domestically and to local entrepreneurship, while creating conditions for outside investors to shift production to Africa, then African development could begin to look very different. Unlike past failed efforts to favor import-substitution interests behind protectionism, this approach can capture benefits from regional integration within global markets.
What would it take? As a first step, the 80 percent of Africans earning $2 a day or less need to earn enough income so they will be able to buy basic consumer goods. Agriculture is the main source of jobs and an early opportunity to boost productivity and income. To do so, investment is needed all across the agricultural value chain: property rights; seeds; irrigation; fertilizer; finance; basic technologies; storage and getting product to market. Since about two-thirds of African farmers are women, we need to help them get legal and property rights, and access to services.
With slightly higher incomes and living standards, local manufacturers can target or customize for the local market, and eventually for export.
To grow further, Africans need the things that Europe and Japan needed after World War Two: infrastructure; energy; integrated markets linked to a global economy; and the conditions for a vibrant private sector. These public goods will foster much more than local manufacturing.
Today's shifts open new opportunities. As the global crisis hit, some Chinese recognized that it was time to move beyond toys and footwear; China could move up the value chain, increase wages and consumption, and expand its "harmonious society." Chinese companies, in turn, could move lower value-added manufacturing elsewhere, including to Africa, following China's resource developers and construction enterprises.
Chinese companies can be encouraged to relocate manufacturing for both domestic production and export. These manufacturers bring know-how, machinery, as well as access to marketing and distribution networks. The World Bank is working with Africans and Chinese to create industrial zones.
Early investors are sensing the promise in Africa and are not dissuaded by the risks – after Lehman Brothers and Greece, investors know developed markets can be risky, too.
Changes in government policies can create opportunities for private sector growth, which in turn offers services to other entrepreneurs. In the ten years to 2008, the private sector has invested more than $60 billion in information and communications technology in Africa; 65 percent of Africans are now within reach of wireless voice services, and there are 400 million mobile phones in use in Africa.
IFC, the World Bank Group's private sector arm, is helping catalyze this business revolution. A new IFC equity fund has attracted $800 million from sovereign wealth and pension funds to invest in companies in Africa, Latin America and the Caribbean.
Economic Shifts Mean Potential Power Shifts
Increased income and growth in the developing world means increasing influence. The old world of fireside chats among G-7 leaders is gone. Today's discussion requires a big table to accommodate the key participants, and developing countries must have seats at it.
Last year's G-20 Summit at Pittsburgh recognized that change. But it will take more than words on paper. Woodrow Wilson's words on paper did not realize their lofty ideals. Arranging a new sharing of responsibilities among mutual stakeholders in international systems will not be easy. But happen it must. The failure of 1919 led to countries that could not cooperate in 1929 and the start of a new war in Europe in 1939.
Today, we already see the strains. The Doha World Trade Organization round and the climate change talks in Copenhagen revealed how hard it will be to share mutual benefits and responsibilities between developed and developing countries. Those debates also exposed the diversity of challenges faced by different developing countries.
If it is no longer possible to solve big international issues without developing and transition country involvement, it is also no longer possible to presume that their biggest members, the so-called BRICs -- Brazil, Russia, India and China -- will represent all.
And this will be the case for a host of other looming challenges: water; diseases; migration; demographics; and fragile and post-conflict states.
In discovering a new forum in the G-20, we must be careful not to impose a new, inflexible hierarchy on the world. Instead, the G-20 should operate as a "Steering Group" across a network of countries and international institutions. It should recognize the interconnections among issues and foster points of mutual interest. This system cannot be hierarchical, and it should not be bureaucratic. It also must prove effective by getting things done.
The Danger of Geo-Politics as Usual
The danger of the political gravity dragging countries back to the pursuit of narrow interests is that we address this changing world through the prism of the old G-7; developed country interests, even if well-intentioned, cannot represent the perspective of the emerging economies. We cannot afford geo-politics as usual.
Nor can we retreat into an "Old Multilateralism" -- a 19th Century Metternichian Congress of Vienna solution -- that seeks to resist change. A "New Geopolitics of Multipolar Economy" needs to share responsibility while recognizing different perspectives and circumstances, so as to build more mutual interests.
Financial Reform
Take financial reform: the world has paid a big price for the breakdowns of the global financial system in lost jobs and ruined lives.
Of course we need better financial regulation, with stronger capital, liquidity, and supervisory standards. A new supervisory framework should consider systemic risks, reverse regulation that reinforces the ups and downs of cycles, consolidates supervision to avoid gaps, and considers inflation in asset prices as well as in goods and services.
But beware unintended consequences. We should not compound costs by encouraging financial protectionism or unfairly constraining financial services to the poor. Regulations agreed in Brussels, London, Paris or Washington might work for big banks in the developed world. But what about the smaller ones, whether in developed or developing countries?
These regulations could choke off the financial sector, innovation, and risk management in developing countries. They could make it harder to invest across national borders.
"Lend local" requirements could have the same effects as "buy local." "Local physical presence" requirements could thwart services just as they can choke trade. "Local liquidity" requirements could fragment global liquidity management and add huge costs without strengthening safety.
Derivatives now have a bad name. This is understandable when one remembers AIG. But derivatives are used by farmers in the American Midwest to protect against volatility in grain prices. Mexico used energy options to lock in a price for the oil that pays for much of the government's budget.
The World Bank pioneered currency swaps, and uses swaps to protect against foreign exchange and interest rate risk. Our loans offer hedging opportunities to protect borrowers from foreign exchange or interest rate risk and even other risks such as droughts and catastrophes. By helping to develop local currency borrowing, linked to global markets, we helped shelter developing countries from the financial tidal waves of the recent crisis.
Financial innovation, when used and supervised prudently, has brought efficiency gains and protected against risk: the World Bank has pioneered livestock insurance for Mongolian herders; a Malawi weather derivative against drought; and the Caribbean catastrophe insurance pool. The latter gave Haiti an immediate $8 million in January when its earthquake struck – faster money than from any other outside source.
As former President Zedillo of Mexico has cautioned, the problem for poor people is not too many markets, but too few: We need markets for microfinance or small and medium-sized enterprises, especially if run by women; markets to move, store, and sell goods; markets to save, insure, and invest.
Wall Street has exposed the dangers of financial innovation, and we need to take heed and serious actions. But development has shown its benefits. A G-7 populist prism can undercut opportunities for billions.
Climate Change
Take climate change: The danger is that we take a rule book from developed countries to impose a one-size-fits-all model on developing countries. And they will say no.
Climate change policy can be linked to development and win support from developing countries for low carbon growth – but not if it is imposed as a straitjacket.
This is not about lack of commitment to a greener future. People in developing countries want a clean environment, too.
Developing countries need support and finance to invest in cleaner growth paths. 1.6 billion people lack access to electricity. The challenge is to support transitions to cleaner energy without sacrificing access, productivity, and growth that can pull hundreds of millions out of poverty.
Avoiding geo-politics as usual means looking at issues differently. We need to move away from the binary choice of either power or environment. We need to pursue policies that reflect the price of carbon, increase energy efficiency, develop clean energy technologies with applications in poorer countries, promote off-grid solar, innovate with geothermal, and secure win-win benefits from forest and land use policies. In the process, we can create jobs and strengthen energy security.
The developed world has prospered through hydro electricity from dams. Some do not think the developing world should have the same access to the power sources used by developed economies. For them, thinking this is as easy as flicking a switch and letting the lights burn in an empty room.
While we must take care of the environment, we cannot consign African children to homework by candlelight or deny African workers manufacturing jobs. The old developed country prism is the surest way to lose developing country support for global environment goals.
Managing for Crisis Response
Take crisis response: in a world in transition, the danger is that developed countries focus on summits for financial systems, or concentrate on the mismanagement of developed countries such as Greece.
Developing countries need summits for the poor. One lesson from this crisis is that effective safety nets prevented the loss of a generation – unlike the Asian crisis in the 1990s.
Hearing the developing country perspective is no longer just a matter of charity or solidarity: It is self-interest. These developing countries are now sources of growth and importers of capital goods and developed countries' services.
Developing countries do not just want to discuss high debt in developed countries; they want to focus on productive investments in infrastructure and early childhood development. They want to free markets to create jobs, higher productivity, and growth. Many are exploring how to use the innovation and efficiency of private markets to help provide and maintain public sector infrastructure and services.
New Role for Rising Powers
But modernizing multilateralism isn't all about developed countries learning to adapt to the needs of rising powers. With power comes responsibility.
Developing countries need to recognize that they are now part of the global architecture. They have an interest in healthy, dynamic, flexible international systems for finance, trade, movement of ideas and people, the environment -- and strong multilateral institutions.
We need to find points of mutual advantage, making reciprocal gain possible. At the same time, we must recognize domestic political constraints and local fears. We need accords that every leader can sell at home.
What does this changing world mean for development?
Development is no longer just North-South. It is South-South, even South-North, with lessons for all with open minds. It is conditional cash transfer programs in Mexico being studied around the world. It's Indians in Africa explaining the so-called "white revolution" – that boosted milk production. It is a new world where developing countries are not only recipients but providers of aid and expertise. Nor is it about ideological panaceas, blue-prints, or one-size-fits all. In a multipolar economy, development is about pragmatism, learning from experience, recognizing how markets and business opportunities change, sharing ideas, and connecting knowledge, just as we connect markets, across innovative networks.
Nor is the future of development only about old concepts of aid: The sovereign and pension funds wanting to invest with the World Bank Group in Africa represent a new form of financial intermediation. This is not charity. This is investment looking for good returns. IFC is helping to lower information barriers and cut transaction costs. It is our aim to do nothing less than revolutionize financial flows to developing countries
Modernizing Multilateral Institutions
How will we manage a "new geopolitics for a multipolar economy" where all are fairly represented in Associations for the Many, not Clubs for the Few?
If the tectonic plates are shifting, multilateral institutions must shift too.
The crisis has shown the possibilities of international cooperation, but it has also underscored the need to modernize and strengthen multilateral institutions to reflect a different world.
The new world requires identifying mutual interests, negotiating common actions, and managing differences across a much wider spectrum of countries than ever before.
It requires institutions that are fast, flexible, and accountable, that can give voice to the voiceless with resources at the ready.
It requires institutions that reach out to partners, with humility and respect, ready to learn from others, that can act as global connectors pioneering a new world of South-South and South-North learning and exchange.
It requires institutions that can demonstrate real results and can be held accountable when they falter.
The World Bank Group must reform to help play this role. And it must do so continually at an ever quicker pace. Government and public institutions tend to be slower to change than private organizations facing competition. We recognize this risk. To address it, we have launched the most comprehensive reforms in the institution's history.
We are Reforming to Become More Representative and Legitimate
A modernized World Bank Group must represent the international economic realities of the 21st Century, recognizing the role and responsibility of growing stakeholders, but also their diversity and special needs, and provide a larger voice for Africa.
Reflecting these needs, we are urging our shareholders to keep their promise to move to 47 percent or more ownership by developing countries this month.
But we are not stopping there. In a model unique among International Financial Institutions, shareholdings will be reviewed every five years to allow for changes based on the continuing economic growth and evolution of our shareholders, with the goal of achieving equity over time. For the first time, shareholdings would be based on a formula specifically developed to reflect the needs and mandates of the World Bank Group: they will not only reflect economic power but also contributions to our fund for the world's poorest countries.
Senior management now includes a record number of executives from developing countries as well as women. And we need to do even more.
We need to work with developing countries as clients, not as objects of development models from textbooks. We need to help them solve problems, not test theories.
Yet problems need resources to fix them.
We are Reforming by Adding Resources
Since the full force of the crisis hit in mid-2008, the World Bank Group has committed more than $100 billion to support developing countries.
This broke all historical records. And I want to especially thank the World Bank Group staff who have risen to this challenge.
We got money where it is needed – fast. Even though the World Bank Group has traditionally been a lender on long-term projects, our development disbursements have exceeded the IMF's crisis payments.
When the World Bank Group stepped up to confront dangers, we depended on the effective and efficient use of resources on hand.
We will need more resources to support renewed growth and to make a modernized multilateralism work in this new multi-polar world economy. Should the recovery falter, we would have to stand on the sidelines.
The World Bank is therefore seeking its first capital increase in more than 20 years. Shareholders face a decision to strengthen the Bank Group, or allow it to wane in influence, losing an effective multilateral institution and leaving it poorly resourced to cope with whatever comes next.
In addition to providing critical financial resources, we have been demonstrating just how modernized multilateralism can work. We are building cooperation among 186 countries that are our members.
Over half the resources raised to strengthen our capital will come from developing countries, through price increases and greater capital investments. Agreement on this package of measures, if successful, would represent a multilateral success story that contrasts with recent stumbles in climate change and trade.
We are Reforming to Become More Effective, Innovative, and Accountable
Representation and resources alone are not enough. We must also be more effective, responsive, innovative, flexible, and accountable.
We are reforming to sharpen our strategic focus where we can add most value -- focusing on the poor and vulnerable, especially in Sub-Saharan Africa; on creating opportunities for growth; on promoting global collective action – such as in climate change, agriculture, water and health; strengthening governance; and preparing for crises.
We are reforming to modernize our products and services, fostering opportunities for innovation, and considering a new decentralization model that will enable us to apply cutting-edge skills closer to clients, while gathering, customizing and sharing knowledge and experience globally. We need global reach, but also local touch.
We are reforming to focus on results, strengthening our governance and anti-corruption efforts, including strong prevention, and leading other international institutions in becoming more transparent and accountable. We have a New Access to Information policy, based on the Indian and U.S. freedom of information laws, which will be the first – but we hope not last – of its kind among international institutions. We are launching a new open access policy for World Bank data. Just last week, we concluded an agreement with other multilateral development banks on the cross-debarment of corrupt individuals and companies.
And we are launching a corporate scorecard so we can be held more accountable.
We know we make mistakes; if overcoming poverty were easy, it would have been eliminated long ago. By opening the shades for others to see what we are doing, how we are doing it, and with what results, we will catch errors more quickly and improve faster.
Taken together, these reforms are transformational. This will no longer be your grandparents' World Bank. It won't even be your parents'.
Conclusion
Reform cannot be a one-time effort. It must be a constant --adaptation and re-adaptation, with continuous feedback loops to meet changing realities.
We cannot predict the future with assurance. But we can anticipate directions –and one is that the age of a multipolar global economy is coming into view.
This is no aberration, no blip. We still live in a world of nation-states. But there are now more states wielding influence on our common destiny. They are both developed and developing, spanning all regions of the globe. This can be all to the good. But the contours of this new multipolar economy are still forming. It needs to be shaped.
The modern multilateral system needs to fit these changes.
Modern multilateralism must be practical. It must recognize that most governmental authority still resides with nation-states. But many decisions and sources of influence flow around, through, and beyond governments.
Modern multilateralism must bring in new players, build cooperation among actors old and new, and harness global and regional institutions to help address threats and seize opportunities that surpass the capacities of individual states.
Modern multilateralism will not be a constricted club with more left outside the room than seated within. It will look more like the global sprawl of the Internet, interconnecting more and more countries, companies, individuals, and NGOs through a flexible network. Legitimate and effective multilateral institutions, backed by resources and capable of delivering results, can form an interconnecting tissue, reaching across the skeletal architecture of this dynamic, multipolar system.
Woodrow Wilson wished for a League of Nations. We need a League of Networks.
It is time we put old concepts of First and Third Worlds, leader and led, donor and supplicant, behind us.
We must support the rise of multiple poles of growth that can benefit all.
5. Huge Protests Planned on April 29 for Showdown on Wall St. and at Banks Across the U.S. to Demand Financial Reform
"People are angry and frustrated with how the big banks drove our economy into the ditch, took billions in taxpayer funded bail-outs, and are now doing nothing to help fix the mess they created," said Liz Ryan Murray, senior policy analyst at National People's Action, which is marshaling thousands with the help of the AFL-CIO, PICO National Network and more to launch the "Showdown on Wall Street!" protest on April 29.
"While we struggle with the foreclosures and unemployment their reckless and greedy behavior caused, they're back to huge profits and obscene bonuses," Murray said. "We're sending a message to these banks that enough is enough. The American people aren't going to stand for it anymore, and we will continue to keep the pressure on until they change their behaviour. We're also sending a message to Congress that we've had enough of them putting the profits of Wall Street ahead of the needs of Main Street. We know the Senate will be listening and watching as thousands of American voters take to the streets to demand real reform."
Read the rest here.
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