Global governance: a new dynamic

Global Governance is about the mechanisms and institutions by which we seek to manage our world.
We are not talking about a world government and black helicopters, but something real and current. This is an array of supra-national institutions created by the world’s dominant economic actors to shape and constrain the actions of individual nations and their citizens.
Important shifts are happening now: maybe most critically leadership is moving from a dated G7 to a more inclusive G20, with a strong presence of ‘emerging’ developing countries.
The acronyms if not the precise roles are often familiar. The UN and its dozens of specialized agencies such as UNICEF is the big daddy, but often weak, under-resourced and divided. The giant financial institutions, the World Bank and IMF, are often seen as too powerful. Over the years many bodies have been added such as the WTO for trade, the OECD for policy co-ordination of the developed economies and ASEAN bringing together nations in S.E. Asia.
Impatient with these too ‘democratic’ multilateral bodies and panicked by the 1973 energy blackmail of OPEC countries, the rich and powerful created their own exclusive club, the G7. This club of economic giants dominated the world scene for years; it pressed for global rules to suit its members’ interests. For many developing countries, the G7 used its voting dominance of global governance instruments such as the IMF and the WTO to father debt crises, the pains of structural adjustment and the frequently adverse impact of globalization, whilst ignoring issues of poverty and human rights. However, this elitist club has steadily declined in effectiveness, even relevance, into a rambling set of sub-committees and an annual high profile photo-op.
We are now living in turbulent times. After over a decade of fat days, at least for the West and amongst a few privileged emerging nations, we are confronting a global economy that is still on life-support – hit by a global financial crisis, just months after a global food crisis and the ongoing threat of climate change. Democratisation as a positive force is also shaking up many countries.
Surprisingly to some, many stronger developing countries survived the financial crisis of 2009 better than the old G7 elite. The Yuan not the US$ is now seemingly the stronger currency. The group we now call the emerging economies, notably the new economic giants, China, India and Brazil, did not falter much and are now actually still pulling many enfeebled northern economies, even the mighty USA, out of their self-dug economic ditch.
A new approach to Global Governance, one still taking shape and far from perfect, is being built around a more inclusive G20, bringing together leaders of major economies from both the developing south and the north. The old elitist model of the G7 has been largely repudiated. It was the G20 that led the process of pulling the world out of the US/UK bankers-created global financial crisis. Over the next few years it will become the global policy forum of choice. and one where the voice of the poor, of developing countries, will come to be much better heard.
Where is Canada?
We were lucky to get into the G7; today we are struggling to even be #15 globally inside the G20. We did not get re-elected to the UNSC and now it is a G20 debate that will likely help shape the consensus on reforming that critical UN body, as well as a reformed ownership of the World Bank and IMF, with increased shares for the emerging economies leading towards a majority voice for the south.
Canada can find a creative role in this new order. However, it undermines its once substantial credibility, in part by being the most insistent in holding onto its old status, saying the G7 should remain the club of choice. Canada, especially its Finance officials, almost alone object to the G20 talking about world peace or environment, when at the same time the new leading voices (now more important than our own) in global affairs, notably the BRIC countries, are in the G20, not the G7. CIDA increasingly underfunds the UN and its specialized agencies.
We could rebuild our once strong credibility as a friend of developing countries. The McLeod Group believes that Canada could start by taking (constructively) a lead in pressing for even greater inclusivity in the G20 – there is a real need for a voice of the fragile states inside the G20 and an important opportunity to turn the G20 into a more regional representative body, in a manner matching the reform in ‘voice’ that is now being slowly operationalised in the World Bank and IMF Boards. Another opportunity that is well-suited to a ‘neutral’ Canada is to press for an end to over-representation of smaller European nations and for the US to cede its veto in the IMF and birth-right to always hold the World Bank Presidency.
We need to get that more positive Canadian act together soon. France now holds the chairs of both G7 and G20 for this year. Unlike Canada in 2010 it is determined to be an energetic reformer. Conservative Canada is still seen as an important spoiler on several global governance issues that conservative France will be pressing. They want more global action to ensure there cannot be a repeat of the irresponsible behavior of the runaway giant banks that triggered our present crisis. They, with other Europeans, some developing countries and even the IMF, not exactly a radical voice, want to use the new mood to create a global transaction tax. This could help mobilise new ‘additional’ funding to counter any new banking crisis, but also to mobilise incremental resources for action on climate change mitigation, food security and other development issues.
Will we remain the laggards, the spoilers? Canada can do much better. But we may need however to first re-learn a little more humility, to stop boasting so much about how (if to be honest as much due to inertia as superior wisdom!), we avoided the global economic crisis. We should go back to being the quiet but not disengaged Canadians, folks who work with others, a country that share its good fortune and work diligently to ‘fix’ things internationally.