Last year in Québec City, the Interaction Council asked itself, “Is the world a better place today than it was last year?” Looking back, the world has made progress. But it must still be asked, will it be a better place tomorrow? What can the leaders of today do to pave the way for a better tomorrow? According to the Honorary Chairman of the Council, Chancellor Helmut Schmidt, “…an ideal statesman is someone who can develop a stirring vision of the future; but at the same time he is held responsible for turning the vision into reality.”
It is with this in mind that the InterAction Council assembled in Tianjin, China, in May 2012 for its 30th Annual Plenary Meeting to discuss global challenges and propose solutions to the leaders of today. The Council focused on: the present state of the world; the development of China and its current and potential contribution to the global system; the financial crisis; global security and nuclear disarmament; and the global water crisis.
Present State of the World
The geopolitical landscape is changing and the world is undergoing a profound shift in power and ideas. Growth among the so-called BRICS (Brazil, Russia, India, South Africa and most importantly China) will end an era largely shaped by the West. The G20 has replaced the G8 in managing global challenges, especially the financial crisis. There is no going back. As change is inevitable, so too is the need for new thinking.
The United States will continue to be a dominant global player for many decades to come. Its relationship with China is pivotal in defining the new international system. While some degree of competition between the two powers is to be expected, the world is large enough to accommodate both. The China-U.S. partnership is not only critical to the region, but is critical to a prosperous and stable world.
States cannot isolate themselves from the global economy or the transnational challenges represented by terrorism, pandemics, and climate change. It is only through regional integration and multilateralism that economic and political-security interests are protected. The Association of Southeast Asian Nations’ (ASEAN) relationship with Myanmar is a positive example of such engagement.
The global economy remains weak in the aftermath of the sub-prime mortgage crisis. While the U.S. economy is recovering, Europe continues to face severe difficulties amid political gridlock over how to resolve the financial crisis. The financial crisis is truly also a failure of the political system, which manifests itself in a lack of leadership and a failure to communicate the reasons behind the crisis to citizens. Voters are turning to anti-European and inward-looking nationalist movements. This is not only the wrong path but also a dangerous one, with the possibility to repeat the cataclysmic mistakes reminiscent of interwar Europe.
Governments have to learn from past mistakes and lead their people toward a better future. The European model of integration is the way forward for Europe; it was right when it was conceived, it is right today, and it will continue to be right in the future. ASEAN has adopted a different approach to regional integration, but it too has been effective and farsighted.
The democratic consolidation in Latin America over the past two decades deserves acknowledgment. The call for democracy in the Middle East and North Africa is evident in the so-called Arab Spring. Its aftermath has been dramatic, but its true legacy is still unknown, especially in Syria and Sub-Saharan Africa where the situation evolves daily, requiring the close attention of the international community. While change has swept many areas in the Middle East, tragically the Israeli-Palestine conflict remains unresolved.
The InterAction Council continues to express its support for the Japanese people as they endeavor to deal with the aftermath of last year's tsunami and the subsequent disaster at the Fukushima nuclear power plant and wish them strength in following the ancient Japanese proverb of "turning disaster into fortune."
While the world is a better place today than it was a year ago, it can be even better tomorrow. This can only be achieved with the conscious and concerted effort of all states to solve the financial crisis, address environmental issues, and avoid conflict. Such efforts must be underscored by a new thinking that: recognises shifts in global power; the diversity of religions and creeds; and concentrates on freedom and democracy, cooperation, and engagement rather than on military power.
Therefore the InterAction Council recommends that:
- The international system takes into account the reality of the shift of global power.
- The U.S. and China intensify their dialogue and cooperate to address global challenges.
- All states reject the policy of containment and instead seek solutions to transnational challenges through cooperation and engagement to promote global stability.
- Leaders announce their support for the European model of integration for Europe and work to have citizens do the same.
- The G20 continue to take the predominant leadership role that it took during the early days of the financial crisis.
- States foster mutual understanding of religion through a continued dialogue anchored in the equality of states and a respect for human rights. The notion put forward by some that democracy and Islam are incompatible should be rejected.
- True multilateral cooperation be the cornerstone of any approach towards solving regional hotspots such as the Korean Peninsula, Sudan and South Sudan, the Horn of Africa, and the Middle East.
- States encourage a peaceful and democratic reform process in the Middle East and North Africa, taking into account the Arab Spring movement.
- Syria implement UN Special Envoy Kofi Annan’s six-point plan and all states engage with and support the work of the Special Envoy.
- Israel conform to the 2004 Advisory Opinion by the International Court of Justice regarding the wall constructed on Occupied Palestinian Territories and comply with the 1949 Geneva Conventions.
- The international community no longer accept the construction and expansion of new settlements in Palestine. The blockade of Gaza that threatens water security, the health and lives of its people and impedes the reconstruction of this ravaged land must be lifted. Equally, the international community should not accept the current poverty and degradation in Gaza.
- States recognise that the questions with which the Japanese people are struggling concerning nuclear energy and safety are environmental and security issues of importance to the whole world.
Stabilizing markets and addressing unemployment
In its fifth year, the global financial crisis has lasted exceptionally long and volatility persists in financial markets. The core reason for the crisis was the lack of appropriate regulation, which led to the availability of easy money, irrational exuberance of financiers, and excessive leverage. A particular failure was the inadequate identification of risk by credit rating agencies.
Faced with a sovereign-debt crisis, the Euro currency area is in recession, while Asian economies are resilient. However, it is unclear whether the growing economies of China, India, and Southeast Asia can sustain their impressive growth by replacing exports to the EU and the U.S., where demand is weak, with domestic consumption. The Latin American economies have achieved growth and a reduction in public debt, but in an age of globalisation no region is immune to the effects of the European crisis.
Africa, for example, where the need for development is greatest, is particularly being impacted by global economic instability.
Millions of people fear another financial crisis. This reflects a loss in confidence in regulators. The EU must continue to implement recovery measures, including: the rescue fund; the leverage ratios and the requisite monitoring mechanisms; a common economic and fiscal policy; and tax, expenditure, social, and labour market reforms. It remains to be seen whether the proposed austerity measures will be effective or whether governments have the resolve to follow through on these painful policy decisions.
If the United Kingdom, other countries in Europe, and the United States can manage to come up with orderly market conditions and common cooperation it will be a more attractive market for all, characterised by rationality, accountability, and responsibility. While regulatory reforms are caught between good intentions and unintended consequences, financial institutions need a rules-based arrangement to position themselves in the new post-crisis financial landscape. Steadier growth is an acceptable trade-off against frequent crises.
Steps must be taken to prevent unemployment from rising. The situation amongst today’s youth is particularly dire with unemployment rates hovering around 50% in far too many countries. How long can unemployed youth carry on before losing hope? Will they eventually turn to radical action, including demagogic leadership?
Therefore, job creation must be at the centre of all recovery plans. While budgets must be balanced, austerity on its own is not enough. Economies cannot recover by making budgetary cuts alone. Austerity and job creation are not mutually exclusive. The economy must be stimulated by investment in growth-enhancing and job-creating projects, such as promoting low-capital intensive industries (including tourism), and infrastructure development. Investments should also be made in education; science and technology; and entrepreneurialism.
There is anger and apprehension amongst the many citizens who have been impacted by the global financial crisis, in part, because those responsible for the crisis have not had to bear responsibility for their actions. Excesses of the financial industry and the lack of regulation brought on the 2007-2008 financial crisis and this industry continues to experiment with processes (such as high frequency trading), which also have the potential to create instability. As the Interaction Council was meeting, for example, JP Morgan and Associates announced a loss at 2.5 billion because of its trading in exotic derivative products. The 1997 A Universal Declaration of Human Responsibilities, issued by the InterAction Council states that, "Every person has a responsibility to speak and act truthfully." This ethical principle should be reflected upon by those responsible for the global economic crisis.
Therefore the InterAction Council recommends that:
- States focus on introducing and financing growth-enhancing projects in order to create jobs, enhance consumer confidence, and healthy competition.
- Governments must take concrete, immediate, and comprehensive action to stimulate job creation for youth.
- States accept that too much austerity measures are detrimental to growth and job creation.
- The EU Member States, the Commission and decision-makers in the EU cooperate to realise the euro zone recovery measures and continue economic integration based on the principle of subsidiarity.
- States adopt regulations separating commercial and retail banks from investment banks: ban the short selling of securities on future trade, and trade in derivatives not regulated by supervisory bodies.
- Regulations on derivatives are implemented, such as those enshrined in the Frank-Dodd Act in the U.S., and coordinated with comparable rules in the EU.
- Regulations are adopted to ensure that publicly listed companies are not permitted to partake in off-balance-sheet financing and high frequency trading.
- Implement regulations to ensure the accountability of credit rating agencies.
- Regulators require tougher capital standards from financial institutions to raise the quality and quantity of capital to avoid another financial crisis.
- The financial problems of the Mediterranean states of the EU be addressed. Indebted countries have difficulty in creating jobs. The challenge is so great that beyond current actions, Europe may need a programme comparable to the Marshall Plan to assist Mediterranean states.
- Concrete steps be taken, such as enhanced access to developed markets, to address the impacts of the financial crisis in the developing world, far from the financial centres where the crisis was created.
A World Without Nuclear Weapons
The InterAction Council has called for the abolition of nuclear weapons in nearly every annual meeting since its establishment in 1983. No state should have nuclear weapons. This is the politically accepted norm in the international community. It is also a legal obligation enshrined in the Treaty on the Non-Proliferation of Nuclear Weapons (NPT) further confirmed by the International Court of Justice. The 2010 Treaty Review Conference reaffirmed unanimously the Treaty’s objective “to achieve the peace and security of a world without nuclear weapons.” In spite of these widely recognised facts, some states continue to seek or consider acquiring nuclear weapons in the belief that their security can only be achieved through having nuclear weapons. These views are mistaken; enduring security can only come from the abolition of nuclear weapons
The nuclear weapon states recognised in the NPT have failed to act, with consequence, in fulfilment of their legal obligation under the NPT to reduce and eventually eliminate their nuclear weapons. This failure is not only intrinsically alarming, but also weakens attempts to restrain proliferation and may well lead to the emergence of further nuclear weapon states.
In addition to adhering to the NPT, a new legal framework is needed to strengthen the imperative of a world without nuclear weapons. Governments have agreed that a new treaty should be negotiated: a Nuclear Weapons Convention to render the manufacture, possession, deployment, and use of nuclear weapons illegal.
Since the end of the Vietnam War, East Asia has enjoyed a period of peace and stability. The desire of North Korea to obtain nuclear weapons threatens this balance. North Korea should adhere to the UN Security Council resolutions and its international obligations.
The Council also took note of its Hiroshima Declaration of 2010, a plan for zero nuclear weapons, which starts with the leadership of Russia and the United States.
Therefore the InterAction Council recommends that:
- The Nuclear Weapon States end their continuing failure to comply with article VI of the NPT and move without further delay to negotiate and achieve the elimination of nuclear weapons.
- States initiate discussions on a Nuclear Weapons Convention, in order to develop without further delay a comprehensive treaty architecture for the elimination of nuclear weapons.
- The decisions of the 2010 Review Conference of the NPT be implemented effectively.
- All states possessing nuclear weapons should enter into a binding agreement never to be the first to use nuclear weapons, acknowledging that some states such as China have already made such a unilateral undertaking.
- Discussions commence on the new structures of global governance, which will be required to ensure the security of the world without nuclear weapons, including a reformed UN Security Council.
- States, individuals, and NGOs engage further and cooperate closely with the Global Zero movement.
- The six-party talks induce North Korea to abandon its nuclear weapons programme by economic incentives and disincentives, and security guarantees. North Korea should rejoin the NPT as a non nuclear weapon state.
- States adhere to a spirit of transparency when developing nuclear energy, so as not to raise concerns that such developments lead to new weapons.
- Support be given to countries with large uranium reserves to ensure that this material does not fall into the hands of terrorists.
- States respect the initiative of Latin America, which was the first region to declare a nuclear-weapon-free zone.
Regulating the destructive use and illicit trade of conventional, small arms and light weapons
Each year small arms claim the lives of 350,000 women, men, and children. Over the past two decades small arms have been used almost exclusively in some of the bloodiest civil wars, as well as ethnic and regional conflicts that humanity has ever witnessed. In Africa today, for example, the conflict in Sudan and South Sudan is fuelled by small arms. The illicit use of small arms is directly connected to stagnating economic development and a deterioration of human rights throughout the world, particularly in the developing world. Achieving control over the hitherto unrestricted proliferation and availability of small arms represents one of the most pressing challenges facing the international community in decades.
Although article 26 of the UN Charter orders the UN Security Council to establish systems to regulate armaments, it has been a dead letter in a vast cemetery of good intentions for world peace. Now more than ever, there is opportunity to change that as states convene to negotiate a global Arms Trade Treaty (ATT) this July to prohibit the use of conventional arms to violate human rights and the proliferation of illegal arms trade.
It must regulate all types of transfers relating to conventional arms, as well as all parts and ammunition of conventional weapons. It must hold governments accountable for ensuring that arms transfers are not approved to countries under a UN arms embargo, or to countries that present significant risk that the arms will be used to commit human rights violations. The ATT will also foster greater transparency with respect to the arms trade, military expenditures, and arms ownership. The intended result is increased trust and security among states.
The ATT would complement an already existing arms framework, including the Firearms Protocol; the UN Programme of Action to Prevent, Combat and Eradicate the Illicit Trade in Small Arms and Light Weapons in All its Aspects (PoA); the Register of Conventional Firearms; and the International Tracing Instrument. While these initiatives are important milestones in arms control, they all suffer from gaps and weaknesses, which allow illicit trafficking and human rights violations to persist.
A strong and universally binding ATT will be a step towards a safer global community. It has the potential to save lives, in particular if small arms are included within its scope. However, if small arms and light weapons (SALW) are not sufficiently addressed within the larger framework of the ATT, the Programme of Action should continue to be supported as it represents the only specific universal framework which deals exclusively with small arms and light weapons.
Therefore the InterAction Council recommends that:
- States adopt a strong, legally binding Arms Trade Treaty, which includes small arms and light weapons within its framework.
- States continue to implement the UN Programme of Action in an effective manner.
- Governments recognise the connection between the illicit use of small arms, stagnating development, and deterioration of human rights around the globe, particularly in the developing world.
- Governments mobilise resources and expertise to reinforce and strengthen existing laws that monitor and prevent the illegal trade in small arms across borders.
- Governments support national disarmament, demobilisation, and reintegration programs by working directly with the United Nations Office for Disarmament Affairs (UNODA).
- States recognise the importance of national reports and their role in strengthening the United Nations’ International Instrument to Enable States to Identify and Trace, in a Timely and Reliable Manner, Illicit Small Arms and Light Weapons.
Global Water Crisis
There has been a growing crisis of water resources around the globe. They have emerged one after another as a result of mankind's over-exploitation and serious pollution of water resources. Climate change exacerbates the unbalanced distribution of water both seasonally and geographically. If left unaddressed, water scarcity, and the deteriorating water environment will certainly undermine human health, hinder economic development, and even affect national and/or regional stability.
The demand for water resources continues to rise due to the growing world population, as well as economic and social development. China's water deficit, for example, will reach 25% by 2030; that is, demand will exceed supply by 25%. China has responded to this challenge with investment by multiple levels of government in water services (China is expected to spend $150 billion USD between 2009 and 2014). China’s attention to water infrastructure should be emulated. This demonstrates the intrinsic link between water scarcity and economics.
It must be realized that the world cannot continue to divert water indefinitely for consumptive purposes, including the production of food which accounts for 70% of water withdrawal globally and is only anticipated to rise as the world's population grows. Enough water must remain in the environment to support multiple uses. These are integral to prevent floods, pest infestations, and poor air quality, all of which have a devastating impact on human health.
The challenges of water scarcity facing the Middle East are particularly serious. The Jordan River, for example, has lost 95% of its natural flow to dams and diversions, impacting not only Jordan, but also its neighbours. The political tension and mistrust, which has governed the region in the past, must be resolved as they are interrelated with the water issue. This is particularly true in the case of Gaza where the unprecedented water shortage (the Gaza Coastal Municipal Water Utility anticipates that drinking-water supplies will be exhausted by 2015) and sanitation issues are exacerbated by the security situation. The blockade should be lifted.
No solution will be found to the immense challenges concerning water scarcity without an ongoing dialogue between decision-makers and water experts. As part of its ongoing commitment to the fair and equitable distribution of water the Interaction Council reaffirms its recommendations concerning water adopted in Québec City during its 29th Plenary Session. It will work to advance those recommendations by: communicating the central themes and content of The Global Water Crisis: Addressing and Urgent Security Issue, which summarizes the findings of the Interaction Council's High-Level Expert Panel on Global Water Issues; participating in the Rosenberg Forum on "Managing Water in the 21st Century: Challenges and Opportunities" to be convened in Aqaba, Jordan September 30-October 2, 2012; and reconvening during the 31st Plenary to review the policy outcomes emanating from the forum in Jordan.
Therefore the InterAction Council recommends that:
- A holistic approach involving economic, legal, and scientific means to improve water management is adopted.
- National water management policies be revised and updated to ensure that water costs are recovered by national governments without over-burdening the poor in developing countries.
- States should agree on satisfactory mechanisms of allocating water between nations, based on basin-wide reasonable, equitable utilisation, and a "water rights approach" as a step towards avoiding conflict over water.
- Investments are made to support the ongoing work of water scientists to determine the quality and quantity of water resources around the globe in order to better support policymaking, conservation, and economic development.
- Education and publicity efforts are initiated to increase awareness of conserving water resources, reducing pollution and waste, and protecting the environment be undertaken by governments, the UN and NGOs in order to achieve the sustainable use and conservation of water resources.