past few decades, regional institutions have become more common. The European
Union is proving to be a solid governance model with the African Union and the
Union of South American Nations taking shape close behind. The South Americans
have formed BancoSur, their alternative to the IMF. Regional trade pacts are
flourishing in an alphabet soup of NAFTA, ASEAN, APEC, Mecrosur, and SAARC. The
Shanghai Cooperation Organization (SCO), led by China and Russia, is a serious
alternative to the US security blanket in Central Asia.
Some may praise new regional institutions as a positive step in cooperation. However, the world should equally be cautious of the changing norms. Regional institutions may encourage cooperation among members, but they may concurrently increase competition across institutions or regions. The SCO's denial of the US's request to join as an observer is an example of regional separation instead of global cooperation. Many of the bilateral trade agreements act in the same way. Taken to an extreme, these regional institutions undermine wider global institutions.
Simultaneously, nation-states no longer have a monopoly on violence. From the attacks on the Twin Towers in New York City to the small, yet painful bombings in cafes and buses of Kunming, a quiet city in Southwestern China, terrorism is threatening the physical and psychological safety of citizens regardless of national borders or ideology. Financial and political poverty is turning the desperate to strengthen nonstate actors. Moreover, these nonstate actors are waging a war of ideas questioning not only the supposed success of the values promoted by liberal states and their institutions, but also their validity in establishing a peaceful and accommodating world. Non-state actors are threatening not only the stability of nation-states, but also the legitimacy of international organizations.
The international order is heading towards either multipolarity, where many states dominate decision-making, or, as noted by Haas of the Council on Foreign Relations, a state of non-polarity, where power is diffused among numerous state and non-state actors. In any case, global governance following the current trend will be chaotic, if not outright anarchic. To manage the coming challenges, the world must strengthen its only global governance organization-The United Nations.
To strengthen the UN requires leadership from the UN Security Council, particularly the US. While the US's power is declining, it still yields the greatest influence on the international arena. The US must take advantage of this shrinking window of opportunity to strengthen the UN, by transferring the role of the global sheriff to the UN, and, together with the other permanent members of the Security Council, establish and conform to a genuine check and balance governance system. The UN Parliamentary Assembly is one of the many proposed system. The world does not have a lack of proposals, but rather, a lack of leadership.
Beyond the UN, the international community must reform itself financially. Aside from broader capital regulation that will come after the current global financial crisis, the world community should move to a supranational reserve currency, weaning off its dependence on US dollar reserves. The dependence on US dollar reserves overexposes other economies to the US economy. Such a reserve was trumpeted first by Keynes and most recently by Nobel-laureate Joseph E. Stiglitz.
Not only does such a supranational reserve system help with long-term balance of payment challenges, a source of instability in itself, it forces even tighter cooperation due to increased interdependence. By allowing more voices to participate in the governing process and by providing a checks and balances system, the international institutions will be more legitimate.
The various new regional blocs are not acting in purposeful defiance of the UN. Rather, they offer a sobering signal that institutions, where governance is fair, are preferred to anarchy. The leaders of the global governance system, particularly the US, must recognize this signal and take advantage of the current opportunity. Coordination will be more difficult, if not impossible, when power is even more evenly distributed. This is a time when members of the UN Security Council can assume true leadership and provide the platform for long-term stability.
Yam Ki Chan is a Masters student at Columbia University's School of International and Public Affairs. He received his BA in Economics from Carleton College
This article has been shortlisted for the Atlantic Community's "Global Governance in 2020" student competition.
The Atlantic Community's World Economic Forum Focus Week (Jan 22 - Jan 28)
This article is part of the Atlantic Community's World Economic Forum Focus Week in a 5 day run-up to the WEF Davos Conference (conference begins Wed 28 January). We are focusing on two of the most pressing aspects of the conference: the Global Economy and Climate Change.
Other articles in our series on WEF:
- Jordan Levine: Socioecological Innovation: an Alternative Future
- Scott Edward Hartley: Political Liberalism at the Heart of International Trade
- Sam Vanderslott: Action on Climate Change Requires Global Technology Transfer
- Alyssa M. Ramsey: Human Rights: A Matter of Guiding the Invisible Hand
- Scott Michael Moore: A Multidimensional Approach for a Planet in Peril
- Dr. Luke Nichter: Redefining the IMF
From the discussion on the community page we will generate a special Atlantic Memo that will be distributed to WEF organizers and to decision makers worldwide at the start of the conference. Please share your comments on the recommendations and issues raised in this article. We want to know how you think the WEF Davos Conference should approach the long-term questions raised by the global financial situation.
- Is unilateralism on the way out?
- Is the UN in a position to lead the way in global governance?
-Should the WEF advocate a supranational reserve currency?