What needs to happen to get a new world order?
Alan Beattie has marked the latest World Trade Organisation (WTO) Ministerial in Geneva with a full page Financial Times article asking why the global economic crisis has not yet produced new global institutions. There are two things needed: time and leadership.
He says: “It was, after all, the crisis of the Depression and the second world war that created the forerunner of the WTO along with the Bretton Woods institutions: the IMF and the World Bank.” Putting the Depression and WW2 into the same sentence shouldn’t obscure the fact that they happened some time apart – the Bretton Woods conference started a full 15 years after the Wall Street Crash.
And if the Depression created the need for global institutions, it was the war that created the will. And provided the leadership necessary.
Arguably, things ARE moving much faster now. The G20, as a meeting of heads of government rather than finance ministers, has been the result of the global crisis. And whilst it isn’t moving as far or as fast as unions and others want it to, it’s clearly making progress.
It’s also the case that the reason the Depression required WW2 and new global architecture was because without them governments made some critically wrong decisions – such as deflation and protectionism. In this crisis, governments have, on balance, done better (they could have done a lot better, of course). But they have done well enough so far to have forestalled the demand for more radical change.
But we’re not out of the (Bretton?) woods yet. Unemployment continues to rise and may not be overcome for years. The EU is planning a decade-long economic strategy to replace the 2000 Lisbon strategy just as figures show that that ten-year strategy’s growth achievements have been completely wiped out by the crisis.
There will be more time before a new global architecture is established. Will there be the leadership required?