My scenario for the future governance in the global economy

The structures and the quality of governance are critical determinants of social cohesion or
social conflict, the success or failure of economic development, the preservation or
deterioration of the natural environment, as well as respecting or violation of human rights
and fundamental freedoms. These links are widely recognised throughout the international
community and show how governance matters for development. Good governance within
each country, good governance at international level and a transparency in the financial,
monetary and trading systems create an environment that leads to development and eliminates
poverty. The governments agreed that good governance at all levels is essential for sustainable
development, sustained economic growth, and poverty eradication.
The intensification of globalization represents the fundamental feature of the world economy
at the beginning of this century. Nowadays we live in a world characterised by ever-growing
interdependence and interconnectedness. The integration of emerging market economies into
the global economy, along with lower transportation costs and technological change has led to
unprecedented increases in the circulation of goods, labour, capital and information around
the world.
The evolutions that have occurred since the economic crisis began in 2007-2008 still leave
some key issues unresolved. These pertain to the leadership, coherence, efficiency and
legitimacy of global economic governance. The discrepancy between the reality of todays
interdependences, the challenges they create, and the capacity of sovereign governments to
agree on how to deal with them remains significant. It crucially depends on the ability of
sovereign nations to find consensual solutions to the common challenges they face and on
their willingness to stick to their agreements.
In my opinion there should be a positive scenario for the future of the global economy. When
written in Chinese the word crisis is composed of two characters. One represents danger, and
the other represents opportunity. On one hand, this crisis has accelerated the rise of the Rest
relative to the West, to paraphrase Samuel Huttington. Its impact was felt most strongly in
advanced economies, while emerging economies barring Central and Eastern Europe have
remained less affected. On the other hand, it has hastened the emergence of China, Brasil and
India as leading engines of global economic growth. It has given them greater legitimacy to

hold an important role in global policy making. There is no clear hegemon any more able to
centrally steer the process. Thus a country or countries could emerge stronger from the crisis
is blurring global leadership, insofar as a new global governance regime is the product of a
consensus of the winners, as once argued by former Brazil President Cardoso, pointing to
the case of the US and its allies after World War II (N. Berggruen, Intelligent Governance for
the 21st Century, p. 157).
Main evolutions that can infuence the future of global governance can be: firstly, a growing
demand for individual empowerment, including for women, and a growing sense of a single
global community; secondly, a reallocation of political and economic power across the world.
By 2025, for example, two-thirds of the worlds population will live in Asia. This can lead to
greater cooperation or to greater tension and competition; thirdly a seismic shift in
demographics, as the youth bulge in various emerging regions rubs up against the graying
populations elsewhere. Sixty percent of the population in the Middle East and North Africa is
under 30. It is 70 percent for sub-Saharan Africa. Again, either a great opportunity or a source
of instability; and lastbut not least, the increasing vulnerability from resource scarcity and
climate change, with the potential for major social and economic disruption.
The world economy should start to recover slightly by 2014. By then, states had poured
trillions of dollars into the financial and economic system without seriously addressing the
need for more regulation and surveillance. Governmental decision-makers did not confront
the real challenges. Thus, other speculation bubbles in the energy, food, raw materials and
biotechnology markets hit the world by 2015. Any hope for economic recovery was squashed
immediately. Henceforward, a broad social movement brought millions of people to the
streets. Their message was simple but unmistakable: Enough is enough!. Powerful
coalitions of trade unions, business and NGOs from North and South called adjustment
process takes place between the five key fields: investment, trade, labour, finances and
environment; and between these organizations and states, trade unions, business and NGOs.
In this manner, strategies and programs are coordinated closely. The multilateral system
cannot be blocked by vetoes. Decisions are generally taken by a dual voting system, which
demands a specified majority of the number of stakeholders voting and a specified majority of
votes weighted according to economic significance. This voting system ensures that smaller
stakeholders count, but the greater importance of more influential stakeholders is also
adequately reflected as they have to pay more of the bill. The main sources of funding for the
multilateral system are provided by states and business and to a smaller amount by trade

unions and NGOs. An independent evaluation and audit institutuion and policy review
mechanisms within each organization were put in place to ensure the efficiency of the new
system.
The world is still struggling with cleaning up the pile of shards from the last decades crises.
The inequality gap between rich and poor is decreasing and further priority is for responsible
global leadership. Finally, governments felt impelled to enable real changes and, at this
constitutional moment in 2016, met with trade unions, business and NGOs to shape a new
multilateral system.
In 2020, the multilateral system has changed radically. Neither the United Nations nor the
Bretton Woods nstitutions and the WTO exist anymore. Exclusive clubs like the G8/G20 have
disappeared. The aim in creating the new multilateral system was to make clear cut changes
and to take the opportunity to start anew. States are no longer the only decision-making power
at the international level. Trade unions, business and NGOs have the right to vote and the
states, trade unions, business and NGOs are equally represented.
Todays decision-makers in government, business and civil society believe in strong publicprivate relationships, in which a perfect market is not formed by an invisible hand but by
these visible stakeholders. The price structure has changed. It now reflects the real costs by
internalizing environmental costs and expenditures necessary to guarantee decent work
conditions. Simply spoken, shareholder value is replaced by sustainable value. Especially the
internalization of environmental costs has already led to stimulation in technological
innovation which has created a large number of qualified jobs. States are investing
tremendously in education systems to ensure that their citizens are capable of working in
qualified jobs.
In the future, an efficient and transparent multilateral system with forceful legal mechanisms
should exist. It should be based on the principles of global partnerships and shared power,
social welfare, sustainability and equality. I hopefully expect the future prospects of the global
economy to be sustainable. In order for this, the generations of the future should embrace the
values of a new eramore openness and cooperation between individuals and nations, more
inclusion and solidarity among peoples, and stronger accountability of those responsible for
the global economy.