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How globalisation’s discontents jeopardise multilateralism

Anis Chowdhury | November 12, 2018 00:00:00

October 24 was the United Nations Day. Seventy-three years ago, on this day in 1945, the world's most inclusive multilateral institution, the United Nations, was born with the determination to "save succeeding generations from the scourge of war, ... reaffirm faith in fundamental human rights, … establish conditions under which justice and respect for the obligations arising from treaties and other sources of international law can be maintained, and to promote social progress and better standards of life in larger freedom" (UN Charter; Preamble).

Thus, one of the main purposes of the UN is to achieve international cooperation in resolving socio-economic problems of the world and promoting of human rights and fundamental freedoms (UN Charter; Article 1.3).

Hence, all members are to "refrain in their international relations from the threat or use of force against the territorial integrity or political independence of any state" (Article 1.4), and give the UN "every assistance in any action it takes in accordance with [its] Charter" (Article 1.5).

This year, however, the UN Day was observed in a world, which looks increasingly at odds with the ideals set out in the United Nations Charter. Wars and conflicts in parts of the world are causing unprecedented humanitarian crises, made worse by the rise in intolerance and xenophobia.

Important international treaties -- recent and long-held ones -- are being threatened by unilateral withdrawals, non-payment of dues, virtual vetoes and threats of worse. Meanwhile, the US initiated tit-for-tat trade war against China may drag the whole world economy down.

Multilateralism under attack

The rule-based, cooperative international order that was the back-bone of stability and progress since World War II (WWII), despite its limitations and failings, seems in "freefall", when ironically the world has become more interdependent.

Thus, the UN Secretary-General, AntónioGuterres, before the opening of the annual meeting of the General Assembly said, "Multilateralism is under attack from many different directions precisely when we need it most."

Miroslav Lajcak, the departing President of the UN General Assembly (PGA), had the same concern a year ago when he began his tenure as the president. He nominated a pro bono group of 16 globally respected individuals to examine the challenges confronting multilateralism, and the UN in particular. On September 10 at an International Peace Institute event, Mr Lajcak said that the principles on which the UN were founded are "no longer universally accepted and cherished. We are seeing trends that go in the opposite direction... We see an erosion of the rules-based system." He warned that this "Me first" approach "puts us all in danger."

How did we come to this point?

Pundits have identified many causes such as proliferation of multilateral institutions often with overlapping mandates making them ineffective and deadlocked. These institutions' resistance to reform to reflect changing realities makes them unfit for purpose. Some point to the mismatch between power realities -- e.g., the emerging power of China and the relative decline of the US which led the post-WWII global architecture of multilateralism -- as the dominant cause. To the rising geo-political competition, others add surging domestic populism -- "Me first" -- as a grave threats to multilateralism.

However, even from the start, there was little incentive to cooperate. While designers of the post-WWII order at Bretton Woods, Yalta and San Francisco envisaged a rule-based post-colonial multilateral order, it was not long before new arrangements for hegemony, if not outright dominance prevailed.

Without Roosevelt, the WWII Allies were soon engaged in a bipolar 'Cold War' demanding the loyalty of others. By the 1960s, many 'emerging countries' sought national political and policy space through 'non-alignment' and the emerging bloc of developing countries called the Group of 77 (G77).

By the 1980s, the Thatcher-Reagan-led 'neo-liberal' counter-revolution against Keynesian and development economics seized upon Soviet economic stagnation under Brezhnev to strengthen private corporate power, by extending property rights, privatisation, liberalisation and globalisation. But neo-liberalism failed to deliver inclusive and shared prosperity fuelling globalisation's discontents.

In the wake of the worst financial crisis since the Great Depression of the 1930s, G7, the club of rich countries co-opted some emerging economies to form G20. In 'divide and rule', this not only weakened G77 solidarity, but also undermined the global economic co-ordination role of the UN's Economic and Social Commission (ECOSOC).

Globalisation failed shared prosperity

The new patterns of international economic specialisation saw significant industrialisation and growth where governments had pro-actively utilised the new opportunities available to them, especially in East Asia. But in most regions, especially in the North, much of the new prosperity was neither inclusive nor shared, resulting in new economic polarisation unseen since the 1920s.

The World Inequality Report 2018 found that the richest 1.0 per cent of humanity captured 27 per cent of world income between 1980 and 2016. By contrast, the bottom half got only 12 per cent. Even in Europe, the top 1.0 per cent got 18 per cent during this period, while the bottom half got 14 per cent.

OXFAM's Reward Work, Not Wealth reported that 82 per cent of the wealth created in 2016 went to the richest 1.0 per cent of the world population, while the 3.7 billion people who make up the poorer half of humanity got nothing. 2016 also saw the biggest increase in billionaires in history, with one new one every two days. The wealth of billionaires increased by $762 billion between March 2016 and March 2017.

OXFAM notes, "This huge increase could have ended global extreme poverty seven times over".

The World Inequality Report warns, "… if rising inequality is not properly monitored and addressed, it can lead to various sorts of political, economic, and social catastrophes".

The Global State of Democracy 2017: Exploring Democracy's Resilience had anticipated this concern: "Inequality undermines democratic resilience. Inequality increases political polarisation, disrupts social cohesion and undermines trust in and support for democracy".

This, in turn, threatens global solidarity.

Globalisation's discontents undermined international solidarity

Much of globalisation's discontents in the global North was easily blamed on the 'other', i.e., immigrants, refugees and Muslims, and also cheap foreign imports accused for stealing good jobs.

Meanwhile, a new generation of social democrats in the West embraced much of the neo-liberal agenda, even rejecting Keynesian counter-cyclical fiscal policies after failing to stem the tax-libertarian revolt. On the other hand, successful in achieving their political ambitions the 'new social democrats' offered a culturally alien, new 'identity politics' as ideological surrogate. This, in turn, later served to fuel the reactionary ascendance of 'ethno-populism' by the 'new right'.

Thus, neo-liberalism's triumph -- with enhanced corporate prerogatives, privatisation, economic liberalisation and globalisation -- in the face of widespread Western social democratic abandonment of its own purported class base, has led to corporatist populist reactions.

Narrow reactionary ethno-nationalisms do not lend themselves to international cooperation, often depicted as a variant of their ostensible enemy, globalism! This has not only weakened international solidarity, but also undermined the very bases for multilateral engagement, let alone cooperation.

Roosevelt's protracted leadership of the ascendant US and recognition of the urgent need to transcend the limited imperialist multilateralism of the League of Nations were crucial. Despite its limitations, the United Nations system appeared to meet the need for an inclusive post-colonial multilateralism after the Second World War.

Ironically, the ongoing undermining of multilateralism with the rise of US sovereigntism after the end of the Cold War has picked up a new momentum as the backlash to globalisation and its pitfalls have spread from developing countries to many transition economies and declining industrial powers.

American divided

The United States, which provided the leadership in designing the post-WWII global order, is now divided. The income share of the top 1.0 per cent is at its highest level since the eve of the Great Depression, and disparities are reaching levels not seen before in modern history.

The bottom half of Americans captured only 3.0 per cent of total growth since 1980. Thus, around 2013, the top 0.01 per cent, or 14,000 American families, owned 22.2 per cent of nation's wealth, while the bottom 90 per cent -- over 133 million families -- owned a meagre 4.0 per cent! The richest 1.0 n per cent tripled their share of US income within a generation, as 95 per cent of income gains since the 2008-2009 financial crisis went to the top 1.0 per cent!

Meanwhile, legislative and other reforms have stacked the legal system even more heavily against those with little power or influence. A recent survey found more than 70 per cent of low-income American households involved in civil legal disputes, such as eviction and employment law cases, in the preceding year. In more than 80 per cent of such cases, they lacked effective legal representation, as the Legal Services Corporation received only $385 million in 2017 compared to more than $860 million in 1981 (inflation adjusted), severely affecting its ability to provide legal support.

But the lack of attention by traditional political parties and technocrats to the plight of low-income households and declining 'rust belts' added to the sense of abandonment. It is not a surprise that many Americans, especially in depressed regions, have become disillusioned and have lost faith in their political and economic systems. Dangerously, they are being attracted to politicians promising protection of various kinds, including imports of goods and immigrants.

Thus, the US now has a president who questions, on a weekly basis, the value of rule-based multilateral institutions it helped create in the post-WWII era.

Anis Chowdhury, Adjunct Professor, Western Sydney University and the University of New South Wales (Australia); held senior United Nations positions in New York and Bangkok during 2008-2016.


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