UNIT 2 - Ch2 - lessons PDF

CHAP 2 – The Global Governance of International Organisations : Cooperation, tensions and regulations INTRO At the end of WW2, the allies, who considered that the crises of the 1930s led to war, seek to rebuild a new world economic order, capable of guaranteeing peace by avoiding economic crises. T...

CHAP 2 – The Global Governance of International Organisations : Cooperation, tensions and regulations INTRO At the end of WW2, the allies, who considered that the crises of the 1930s led to war, seek to rebuild a new world economic order, capable of guaranteeing peace by avoiding economic crises. They therefore wanted to put new economic collective rules in place in cooperation with all the States of the world. Thus, for greater efficiency, in 1945 the need for a global scale of government in a logic of multilateralism (= cooperation between States) was imposed. This global scale of government is known as Global Governance. Governance = set of means to ensure the functioning of a domain whatever it is: company, State, region... Global governance = an attempt to establish rules, institutions, modes of cooperation to deal with pbs on a global scale. It involves not only the intervention of States or groups of States but also the intervention of non-state actors. In the 1990s, the idea spread that to deal with global pbs, it was necessary to include not only States but also non-state actors. Since the end of the 1990’s and the collapse of the Eastern Bloc, a new global governance has been organized. We are going to examine the role of key international organisations in the global economy and explore the associated dynamics related to global governance as emerging countries continue to increase their power and influence. Despite cooperation, the global economy is in constant evolution bringing all sorts of regulations. Thus, tensions are growing, global governance is contested, and it leads to new regional cooperation. Paradoxically, while states continue to proliferate, the model of the state rooted in a particular circumscribed territory is tending to fade in a world where interdependency is intensifying. The state is increasingly powerless in the face of transnational actors that are becoming ever more numerous in economic, religious, social, and other spheres. I. A Typology of Cooperation Organisations A. International organisations or intergovernmental organizations (IGOs) * International institutions promote globalisation by encouraging trade facilitation. Since 1944 (The Bretton woods Conference), the International Monetary Fund (IMF) and the World Bank have been promoting a liberal economy. > The International Monetary Fund (IMF) - to enforce the Bretton Woods rules, that is to say ensure exchange rate stability In order to: avoid competitive devaluations... No devaluation could take place without his agreement to lend money on an ad hoc basis (as needed) if a country has problems (short term). The IMF is headed by a board of governors, each of whom represents one of the organization’s approximately 180 member states. It offers financial advice and support to countries hit by crises. New managing director of the IMF is Kristalina Georgieva, a Bulgarian economist, since 2019. She succeeds Christine Lagarde, now president of the European Bank. Before joining the IMF, Ms. Georgieva was CEO of the World Bank (2017–2019) and VP of the EU Commission (2014-2016). The IMF managing director is usually a European and—by tradition—not an American. ⮚ The World Bank (initially IBRD) IBRD = International Bank for Reconstruction and Development Purpose = to lend money but in the long term...that is to say, for development. It was therefore addressed: - to poor countries so that they can develop themselves (Asian /African countries) - and to the countries devastated by the war so that they can be rebuilt (Germany). *Similarly, the World Trade Organisation (WTO) can sanction any deviation from free trade. ⮚ WTO replaced the GATT (General Agreement on Tariffs and Trade) in 1995. Its role is to liberalize trade, putting on an equal footing MEDCs and LEDCs => Emerging countries are asserting themselves more and more. E.g.: China joined the WTO in 2001.  ⮚ In the WTO, each member state counts as one vote, which allows poor or emerging countries to make their voices heard. This institution also aims to resolve trade conflicts and tensions arising from globalization. * Groups of countries such as the G7 and G20 have been formed to try to solve global challenges and regulate globalization. These cooperation groups sometimes challenge the order proposed by international institutions. The creation of the G20 or the BRICS reflects a desire to promote a more multipolar world. ⮚ G7: the Group of Seven (G7) is an inter-governmental political forum consisting of Canada, France, Germany, Italy, Japan, the United Kingdom and the United States. They had existed since before the 1990s: G6 (and now G7) 1974: birth of the G6: US+ Japan+ All+ F + RU + Italy 1975: G 7 (+ Canada) 1998: G 8 (+ Russia) and G7 again since 2014 ⮚ Its members are the world's largest IMF advanced economies and wealthiest liberal democracies; the group is officially organized around shared values of pluralism and representative government. As of 2018, the G7 nations account for close to 60 percent of global net wealth ($317 trillion), 32 to 46 percent of global gross domestic product, and about 770 million people or 10 percent of the world's population. Most members are great powers in global affairs and maintain mutually close economic, military, and diplomatic relations. The richest countries intend to set the main orientations of the world economy. HOWEVER: ⮚ The G20 was founded in 1999 in response to several world economic crises. The G20 or Group of Twenty is an intergovernmental forum comprising 19 countries and the European Union (EU). It works to address major issues related to the global economy, such as international financial stability, climate change mitigation, and sustainable development. The G20 is composed of most of the world's largest economies, including both industrialized and developing nations, and accounts for around 90% of gross world product (GWP), 75–80% of international trade, two-thirds of the global population, and roughly half the world's land area. 2008: G 20 to consider the new equilibrium M (emerging countries). Since 2008, it has convened at least once a year, with summits involving each member's head of government or state, finance minister, foreign minister, and other high-ranking officials (the EU is represented by the European Commission and the European Central Bank). The G20 summits are now the most representative forums for discussion on economic governance. It reflects the multipolarity of today’s world. Ex: In February 2013, meeting in Moscow, the 20 heads of state of the G20 discussed about the big TNCs (GAFAM (Google –Apple – Facebook – Amazon – Microsoft), L’Oréal, IKEA...), which minimize taxes thanks to complicated financial arrangements but efficient. (They manage to pay only 5% taxes while a small or medium corporation paies about 30%). Originally limited to economic questions, their discussions were open to all themes: migration, illegal flows, environment, terrorism... *Last, today, the Triad (United States, EU, Japan) is competing with: - emerging powers: BRICS /BRICS+, which opened their economies, attracted FDI, became essential actors of the globalized world and intended to upset the hierarchy of powers. Thus, China opened its economy in 1980 and India since 1991. Russia is back on the economic scene since 1991. In 2006, Brazil, Russia, India and China created the "Bric" group. South Africa joined in 2010, making it "Brics". Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates are due to enter on 1 January 2024 ("Brics +"). Brics countries include major world powers, such as China and Russia, and countries which are major powers on their continent, such as South Africa and Brazil. However, Brics countries say that Western nations dominate important bodies such as the International Monetary Fund and the World Bank, which lend money to countries. They have called for a "greater voice and representation" for emerging economies. In 2014, the Brics nations set up the New Development Bank to lend money for development. - oil monarchies of the Middle East, which weigh in the world economy by the importance of their sovereign wealth funds and investments. => These new powers are gradually integrating international institutions, formerly reserved for MEDCs. (China in WTO in 2001) B. Regional Cooperation Organisations * Groupings of states aim to have an impact on globalization. These regional associations all have different functions and objectives: sometimes it is a simple free trade area (For e.g., USMCA also called CUSMA) or more advanced cooperation in economic, monetary, and political matters (Such as the EU). * Continental organization is particularly relevant for states and companies. All regional associations promote free trade by lifting customs barriers (ASEAN, MERCOSUR). They often bring together countries of different economic weight. (See case study # 5 on ASEAN) * This regional cooperation can also strengthen the economic power and attractiveness of the area concerned (See case study # 5 on ASEAN). Intra-regional trade is facilitated by development corridors (= A transport route that facilitates the passage of goods and people when territories are landlocked. They improve relations between different areas and open the economies of certain countries). Global trade is mainly organized between these large associations. II. Regulations and Tensions in Today’s World A. A World under Stress, What Regulations? How to explain and resolve tensions in globalization? 1. Global Management and Regulations are in Crisis In an increasingly integrated world, managing globalization is a crucial issue to respond collectively to the major challenges: respect for universal rights (war and peace, democracy, labor law), sustainable development, North/South solidarity, etc... Since 1945, the global system has been based on the major international political or economic organizations, largely dominated by the United States and Western countries. The request from emerging countries and LEDCs to reform this system to adapt it to today's multipolar world has been vetoed by the United States. The system is therefore largely paralyzed and bypassed by the emerging countries at the origin of alternative organizations such as the Asian Infrastructure Investment Bank (AIIB created in 2014 at the initiative of China), competing with the Asian Development Bank, the New Development Bank (an international financial institution established by BRICS in 2014), the IMF, and the World Bank. The refusal of these countries to be marginalized in decision-making processes also leads to the development of discourses and practices presented as alternatives to those of Northern and/or Western countries. South-South cooperation, for example, described as egalitarian, horizontal, and based on reciprocity, is designed to renew development aid procedures while enabling emerging countries to participate in debates on the global governance of aid. 2. The Rise of Divergent and Contradictory Interests The current multipolar world system is structured by the clash of divergent and contradictory interests between powers: the UN climate agreements are thus still blocked by big polluters (India, Brazil, Australia, United States). The rivalry between the United States and China is having an impact on international relations. The United States remains on the side-lines of many treaties (Agreement on the Iranian nuclear program, etc.) and is waging an aggressive struggle against its competitors: protectionism, control of technology, political and economic sanctions against Russia, China, and the EU. On the other hand, China is strengthening its positions everywhere and is attacking with "new silk routes", including in the Arctic.  This economic governance is contested: ⮚ By Alter-Globalization Movements Definition = nebula composed of many political and/or associative currents that have in common the will to fight against the disorders linked to globalization. The anti-globalization movement, or counter-globalization movement, is a social movement critical of economic globalization. The movement is also commonly referred to as the global justice movement, alter-globalization movement, anti-globalist movement, anti-corporate globalization movement, or movement against neoliberal globalization. Participants base their criticisms on several related ideas: - Participants oppose large, multinational corporations having unregulated political power, exercised through trade agreements and deregulated financial markets. - Specifically, corporations are accused of seeking to maximize profit at the expense of work safety conditions and standards, labor hiring and compensation standards, environmental conservation principles, and the integrity of national legislative authority, independence, and sovereignty. E.g.: Attac movement, founded in France in 1998. E.g.: OXFAM E.g.: "World Social Forums" are held in competition with the Davos Summit (World Economic Forum- business + political leaders of the world). The 1st World Social Forum took place in Porto Alegre in 2001: "another world is possible” was the slogan. Demonstrations have sometimes turned violent: Genoa in 2001, Seattle in 1999... Many anti-globalization activists do not oppose globalization in general and call for forms of global integration that better provide democratic representation, advancement of human rights, fair trade and sustainable development. They want a real global governance to be put in place. Therefore, we can talk of alter-globalists. ⮚ By those who consider that economic governance and global political governance are inseparable E.g.: the recent financial crisis since 2008 Because the economy is an important factor in elections in economic powers with a democratic system. ⮚ By others who think that this world economic governance is heading for failure. Because international or even regional agreements are too difficult to put in place because of the large number of actors and States involved. They believe that it would be preferable to focus on bilateral agreements for greater effectiveness. They are promoting alternative systems: local produce, recycling, organic farming... 3. An Over-Armed and Boiling World Rising tensions are resulting in an over-armed world. In ten years, world arms spending has increased by 20% to reach $2113 billion in 2021. The United States (36%), far ahead of China (14%), Saudi Arabia (3.8%), India, France, and Russia (3.5%). The rise of conflicts is particularly sensitive in East Asia, the Near and Middle East, South Asia, and the Sahel. There are 402 conflicts in the world, including 226 violent conflicts and 18 real wars, civil or internationalized, often in the poorest states (Syria, Afghanistan, Yemen, Libya, Pakistan, Ukraine, Nigeria, Somalia, Republic democratic of the Congo). The UN Department of Peacekeeping Operations manages 15 military or police actions with 110,000 blue helmets to stabilize conflict zones. B. Does the Future of Globalization lie in Regional Cooperation? What role for regional cooperation in globalization? 1. From Regional Cooperation to Globalization (See Case study #5 on ASEAN and see lesson on the EU)  The integration of territories into globalization requires the multiplicity of intergovernmental organizations (IGOs) at different scales. The objective is to create stability by promoting forums for debate and cooperation between neighboring states. These (more or less) extensive regional organizations thus participate in the management of major contemporary challenges. (More or less) flexible and integrated, these forty IGOs may be solely political (African Union, Council of Europe, Arab League, Nordic Council) or military (NATO); but also economic, monetary, or commercial (Mercosur, African FTAA, EU...). The many regional organizations are interlocking and form a complex international architecture, as many states often adhere to several systems of different nature and scale. Thus, even within the EU, the euro zone and the Schengen area do not overlap. 2. Regional Cooperation as a Power Issue The creation and functioning of regional organizations are often associated with the logic of powers seeking to control their regional space to assert themselves on the world scene. Thus, no EEC and then no European Union is possible without a Franco-German driving couple, no Mercosur without a geopolitical compromise in Latin America between Brazil and Argentina. In the Americas, the United States has succeeded in integrating its two very economically dependent neighbors into NAFTA, now USMCA. But the Americans’ will to create an all-America trade bloc (FTAA or Free Trade Area of the Americas) is not yet a reality. It failed due to Brazil and its allies. In Asia, the Association of Southeast Asian Nations (ASEAN) was a pro-Western organization when it was founded in 1967 during the Cold War. The easing of tensions led to the entry of five new countries between 1984 and 1999. Today it must deal with the ambitions of the new neighboring powers China and India. 3. Regional Cooperation and Integration; Major Issues The dynamics of regional organizations therefore reflect major geopolitical and geo-economic issues. While some structures are very advanced (EU), others are in crisis (Persian Gulf Cooperation Council), even broken down (Arab Maghreb Union) or in decline, such as the Union of South American Nations, which has lost half of its participants due to conflicts between its member states. On the other hand, Mercosur (“Mercado Común del Sur” or Southern Common Market) favors the creation of development corridors in Latin America. The rapprochement between Russia and China in Eurasia involves bilateral agreements and the creation of the Shanghai Cooperation Organization (SCO, including Russia, China, central Asian Republics, India and Pakistan) with an economic and security vocation. It also allows the creation of alliances with variable geometry on a world scale, such as the BRICS or the Chinese "New Silk Roads". CONCLUSION Thus, since 1944, global economic governance has seen the establishment of a highly regulated system, the one defined at Bretton Woods. It has not been able to resist the economic crisis and the emergence of new powers. The current governance of the world is therefore made up of complex balances and is marked by an increasing number of interdependent actors. Global governance is now multipolar. However, some contest this new global governance and even think that it is impossible and that bilateral agreements would be more effective.