HTLS 2021: Order or disorder in new world?

ByNK Singh
Nov 24, 2021 11:50 AM IST

Consider four dominant transformational changes: The pandemic; the multiple dimensions of the climate crisis; far reaching technological challenges; and geopolitical conflicts that threaten the whole world.

It has been said that two dangers constantly threaten the world order: order and disorder. We are at the cusp of rapid global transformation. The new world order will not be an act of choice, but an inevitable fait accompli.

NK Singh, chairman of the 15th finance commission and president of the Institute of Economic Growth.(File photo)
NK Singh, chairman of the 15th finance commission and president of the Institute of Economic Growth.(File photo)

Consider four dominant transformational changes: The pandemic; the multiple dimensions of the climate crisis; far reaching technological challenges; and geopolitical conflicts that threaten the whole world. While the first three are not acts of choice but inevitable consequences of both anthropogenic behaviours and technological breakthroughs, the fourth, of recent origin, is the result of behavioural changes contrary to expectations.

It is now increasingly evident that this is not the first pandemic that mankind has faced. It would be naive to believe it would be the last. While the origins of the pandemic remain opaque, there is now increasing evidence based on declassified US intelligence reports on Covid-19 that while both natural transmission and lab leak theories remain plausible, it may have also involved the handling of animals that could be coronavirus carriers. The debate on the issue of did the virus jump from bats arises because “75% of new infectious diseases over time have come to us from animals”.

Apart from this, the recently concluded COP26 has accepted that anthropogenic behaviour is an important contributor to multiple aspects of climate change. The sceptics have either accepted defeat or receded in the background. Prime Minister Narendra Modi presented a laudable five-point agenda for the climate crisis entitled “panchamrit” at the conference. These are to raise India’s non-fossil fuel-based energy capacity to 500 GW by 2030, to meet 50% of power requirements using renewable energy, and to reduce the carbon intensity to less than 45%, with India achieving net-zero emissions by 2070.

What is undoubtedly extraordinary is the speed with which the global scientific community responded to the pandemic in harnessing technology for the production of vaccines in record time. Innovation driven by scientific excellence that mankind has achieved is a harbinger of the new global order.

Institutions of global governance were created in good faith. Over time, the virus of dominance by the few creators corroded their credibility. What is worse is that the entry of China promoted and fostered by the developed powers in the belief of a peaceful rise has impaired the objectivity of many of these institutions. However, the global society cannot overlook these developments.

What binds these four aspects overriding change is to reinvent a new architecture of global governance. It entails a fundamental restructuring of the institutions of global governance that is contemporary.

Consider the following. First and foremost, the most overarching institution of global governance is the United Nations. The UN has undoubtedly undergone phases of reforms since its foundation in 1945. It has sought to respond to peacekeeping measures and developmental challenges, even as the organisation in the post-decolonisation era has become more broad-based.

The existential question of empowering the UN remains divided between those who recognise that this is no more than a high-level interactive forum and others who would like to make this into a full-fledged world body.

One of the under-addressed challenges is Asia’s inadequate representation in the UN Security Council, which many have argued seriously threatens its legitimacies. The only way it can play an increasingly important role is to recognise that both political and economic power structures have undergone fundamental changes since its inception. To this end, Jeffrey Sachs suggested to add four Asian seats, namely, one permanent seat for India, one shared by Japan and South Korea, one for the Asean countries, and the fourth to rotate among other Asian countries. It is somewhat ironic that India, which would soon become the world’s most populous country, does not have a permanent seat in this key decision-making body. Whatever be the decision, the current situation is untenable by permitting veto rights to the new dominant power in Asia.

While going beyond COP26, we certainly need a new entity like the UN Environmental Organisation (UNEO), which was suggested in the Fourth Assessment Report of the Intergovernmental Panel of Climate Change as early as February 2007. We also need an international convention on technology, its opportunities and minimizing misuse by aberrant member states.

Secondly, the Bretton-Woods institutions created in 1944 – the World Bank Group and the International Monetary Fund – need reinvigoration and a new focus based on current needs. These inter alia would include a review of quotas based on financial contribution through obscurantist practices like Single Country Borrower Limit or the limited use of Article IV Consultation with the IMF both in anticipating and addressing international crises as they emerge. These institutions as well as other regional banks must mainstream the need for climate finance in innovative ways both by way of direct lending and mitigating risks to incentivise and garner necessary capital flows. It seems to me that a new Bretton-Woods conference could also be convened with a new nomenclature to review the intellectual basis of these institutions through fundamental reforms of institutional governance.

Third, the IMF itself as the principal arbitrator in the management of global monetary systems must have a coherent response to the emerging challenges of cryptocurrency. Many believe this would create multiplicity of banking systems and security exchanges as well as uncertainties for nations to manage their monetary and fiscal policy with coherence. The possibility of misusing the inevitable technological changes arising from cryptocurrencies needs to be addressed in a responsible manner.

The fourth issue is the emergence of newer technologies, particularly 5G and artificial intelligence. The recent details on what AI can do by way of allowing nations to use hypersonic means to assert their technological prowess is only one example. How do we harness unthinkable changes in technology and equally rein them in? We must respect the sovereignty of nations, privacy to individual rights and the nature of international arrangements.

Finally, the Old World Order through which we are transiting accommodated the aspirations of Asia and dealt with the period of decolonisation but remained a cosy compact of North Atlantic powers of the US and Europe. The emergence of China has serious geopolitical implications, not only for Asia, but, given its technological and financial prowess, for the stability of the overall system of social order.

The New World Order will not be based on philanthropy. Enlightened self-interest is difficult to harness, but modalities not only of consensus in which there would be, hopefully, a willing relinquishment of individual and national sovereignties for overall global good. The task is daunting but inescapable.

(NK Singh is chairman of the 15th finance commission and president of the Institute of Economic Growth)

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