Four roles for the Multilateral System – how well will it perform any of them?
Along with a bunch of Oxfam’s specialist policy wonks, I recently helped Francoise Vanni, our new Director of Policy and Campaigns, put together a presentation on the multilateral system. Writing a new powerpoint is also a pretty good way to generate a blog post – key messages, simply transmitted (assuming you obey the ‘less than 20 words per slide’ rule, and avoid sticking up vast chunks of text or tables, like some academics I know). So here goes (and here’s the slides if you want to nick them Francoise Vanni powerpoint).
The Multilateral System (MLS) has huge potential to promote human rights and development, but it is a political construct and so can easily be turned into a tool of dominance by the powerful. There are (at least) four potential roles for the MLS:
- Solving Collective Action Problems
- Curbing the excesses of the powerful (states, corporations)
- Encourage democracy and inclusion
- Transfer resources from the richest to the poorest
Solving Collective Action Problems
The multilateral system is there to help humanity deal with problems that cannot be dealt with by nation states alone – problems like climate change, rising inequality, or Ebola.
Climate change is the biggest collective action problem ever faced by humanity. Crops are being parched then drenched. Competition for dwindling land and water is on the rise. Companies are polluting and profiting. So far the multilateral system hasn’t shown it can cope with it, nor has it shown it can secure action that is more than the sum of the national parts. This December’s climate summit in Paris might be the turning point we have waited for to secure agreement we need in the fight against climate change. We need it to lift ambition at a national level and send a vital signal to energy and other markets that the world’s political leaders are serious about tackling climate change. Paris is an absolutely pivotal moment.
Inequality is rising. Last year Oxfam calculated that 85 individuals had the same wealth as the bottom half of the world´s population 3.5 billion people. This year, we updated our numbers and found out that the number of individuals on the megarich bus had dropped to 80. With wealth comes power, and with power the ability to influence political processes and political outcomes, with the danger of rigging outcomes to serve the interests of the few.
Globally tax evasion deprives governments of trillions of dollars – a huge collective action problem, as the race to the bottom on tax means less and less money for governments to spend on vital public services like schools and hospitals. Developing countries may lose $100 billion a year from tax dodging and generous tax incentives – yet they aren’t given an equal voice in the negotiations under way to rewrite the tax rules. This means that current talks exclude more than a third of the world’s population.
That’s why Oxfam is calling for a World Tax Summit, where all countries are invited and where the rights and needs of citizens are prioritised over the profits of corporate giants.
Ebola exposed the systematic underfunding of the World Health Organisation, and the brutal health inequities that show that when it comes to dangerous pandemics, we are only as safe as the weakest link in the global chain. Again what better case for a stronger multilateral system?
Curbing the Excesses of the Powerful
On issues such as trade and investment rules and intellectual property rights, organizations like South Centre and UNCTAD (who organized the event Francoise was speaking at) played a vital role in defending policy space during the high water mark of neoliberalism. Although developing countries have so far fended off multilateral assaults at the WTO and before that in the Multilateral Agreement on Investment, as UNCTAD points out, serious encroachment is taking place through a host of Regional Trade Agreements and Bilateral Investment Treaties. Continued vigilance is needed to oppose efforts to ‘kick away the ladder’ of development, because, as Cambridge economist Ha-Joon Chang has shown, policy space and industrial policy have played vital roles in the take off of almost all now-successful economies.
Encourage democracy and inclusion
The MLS in general and the UN in particular, has played a huge role in encouraging the spread of human rights, not least for women and girls. As national governments become stronger, more capable and less dependent on aid, the MLS must continue to nudge them along the road to respecting human rights. An important part could be played by the Sustainable Development Goals, but only if they are designed in such a way as to influence national governments, not just the quality and quantity of aid. The SDG discussions this year will be crucial.
Transferring resources from the richest to the poorest
Keeping the global quantity of aid rising during a global recession is an achievement without historic precedent. But in relative terms, aid is of declining importance compared to other sources such as foreign investment and remittances, as well as domestic resource mobilization (from taxes and natural resources). The Addis Financing for Development summit in July is a crucial moment to move forward on all forms of development finance:
- In the face of rising inequality and political capture, donors and development partners need to collectively emphasize accountability, transparency, policy coherence, and gender mainstreaming across all financial flows for development.
- Donors need to provide assurances to developing countries that growing levels of climate finance are not at the expense of existing funding for development actions like health and education. Climate finance is essential to ensure that global efforts to tackle climate change are distributed fairly, and that poor countries who have done nothing to cause climate are financially supported to adapt to climate impacts and can develop in low carbon ways. However, it has been very difficult to come to an agreement between countries that climate finance should be additional to existing commitments to increase aid to 0.7% of gross national income.
- Even though aid is falling in relative importance overall, it remains a crucial contributor to ending poverty: in 43 countries that are home to 221m extremely poor people, aid remains larger than other flows. These 221m people represent one-third of the extremely poor living outside China and India.
Many feel that in recent years the multilateral system has been broken, that instead of a G20, or G8, what we have is a political black hole that looks more like a G zero – where nothing significant can be agreed. But while it is true that it is very difficult to get progress at the multilateral level, the success last year in getting a global Arms Trade Treaty shows that success is possible.
There is no substitute for a robust multilateral system, one that reflects the realities of today’s global politics and power, rather than those at the end of World War 2, and one that can respond to the huge collective problems that face us all.