Globalising - but fairly

António Guterres, President of the Socialist International, sets out his view of the way the planet must be globalised.

We live in a global world facing two major problems: ours is a world which remains politically unstructured and economically deregulated.

It is politically unstructured because there are no strong political world organisations and there is just one single hegemonic power. It is economically deregulated because the development of a global market was not complemented with the introduction of adequate forms and mechanisms of global regulation.

If you look at the way national markets function, you will realise that they are regulated or overseen by the State and by the law. Furthermore, it is constantly scrutinised by an organised civil society. On the contrary, if you look at the global market you will see that there is nothing comparable to a State structure intervening as a regulatory mechanism and, perhaps even worse, that the international organisations designed to monitor this market remain too fragile to do it effectively.

Moreover, there is not a "world civil society" equivalent to the ones we cherish in our own countries although some hint of a "global conscience" on subjects - like environment protection, for instance - seems to gradually emerge.

In other words: the world political structure as it stands is not, in my view, proving to be able to guarantee everywhere stability, democracy and the respect for human rights. These are the essential values that must be fully protected and enhanced.

The picture gets even more complex if you bear in mind that our economically deregulated world is set against a scenario of increasing wealth, productivity and trade but, simultaneously, of world spread poverty and the deepening of the dualism between rich and poor regions of the globe. This is also felt in several individual societies where some regions, sectors and even individuals face the risk of lagging behind. The fact that globalisation is taking place in a period of transition to the so-called knowledge based economy worsens the situation. It seems somewhat contradictory that, while knowledge has become the main factor for creating wealth, it is also mainly responsible for deepening the gap that separates the rich from the poor and creates a new form of exclusion.

In a process with some points in common with the eighteenth century industrial revolution, we are at a time when new communication and information technologies are speeding up an incredible amount of knowledge and injecting it in the productive and social processes in an unprecedented way. This is, I believe, the state of the world. I did not qualify it because we are dealing with concrete facts, and the reality of facts cannot be discussed. However, this does not necessarily mean you should not regulate globalisation. Quite the opposite, indeed. Let me submit some ideas in this regard.

I said before that our contemporary world is a politically unstructured one. This means that if we wish to set up some kind of structured regulation acceptable by all, one of the first things we need to do is to strengthen the role of the international organisations or, at least, of some of them.

We also need to build up a political architecture that, instead of being based on the existence of one single power, should rather rest on various and mutually balanced centres of power. I am convinced that a multi-polar world will greatly facilitate the introduction of a regulatory framework to the global economy. Let me tackle just the point related to the need to reinforce the role of the existing international organisations.

We all know that in what concerns the regulation of international relations the United Nations has a specific and particular responsibility. We all agree that since its foundation, the United Nations and its subsidiary agencies and organisations have played an irreplaceable role. Also it is no secret that the UN Security Council is now deemed unfit to fully accomplish its mandate according to the Charter. Therefore, many observers argue that the Security Council is now somewhat lacking in legitimacy to act or even speak on behalf of the international community. The vast majority of UN Member States - if not all - agree that a Security Council reform is urgently needed. The big issue is the debate on how far the reform should go, which path should follow, which new members should join in, should the veto power remain on the hands of the current five permanent members. I sincerely regret that it has not yet been possible to agree on a consistent reform that can be accepted by all. But I can assure you that I am among those defending that the Security Council should be expanded to better reflect the international reality of today. And that I also strongly advocate for Germany, alongside others, to become one of the new permanent members of this body.

It is not only the UN and the Security Council that need reform. I have already said several times in the past that the role of the Bretton Woods institutions should be reviewed. It is true that some progress towards adapting these institutions to meet the aspirations of developing and transitional economies has been achieved. However, there is still some way to go in this process. A new Bretton Woods framework, must help to sustain global growth and employment, reinforce social rights and welfare, protect and enhance the environment, and ensure regulation and accountability of financial markets at world level.

There is also a social and environment dimension on the World Trade Organisation that should be enhanced. We want both free trade and fair trade. This does not mean introducing new protectionism measures or barriers, or to impose binding salary levels or working hours, rather to protect fundamental rights, namely in the labour markets, as a guarantee that conditions are in place for a fair trade. That is why I believe that the ILO also needs to be strengthened. This point seems to me of particular importance if you bear in mind the growing revenue gap between the rich and the poor of this world. However, reforming international organisations, despite its urgency, is still far from enough. It does not fully respond, by itself, to our main objective of building up a structured world. I believe that in order to completely attain the goal of a structured political order, we need to build up a multi-polar and balanced world through the strengthening of the existent or emergent regional blocs.

However, for these blocs to function properly as part of this multi-polar world, it is fundamental that they do not restrict themselves to act economically as simple free trade organisations. They should also aim to economic, political and social integration. This is why the European Union - as the only true organised regional space in the world - plays a fundamental role in the building up of the new political architecture and needs to be strengthened further. Indeed Europe, through its integration process, has been able to act, not only as an element of balance in the international relations, but also as an inducing factor leading to the strengthening of other regional blocs.

I hope that will be the case of Mercosur in South America, ASEAN in Asia or SADC in Africa - three specific experiences in three continents with very different political, economic and social conditions. This is why here in Europe we try to give attention and support to those fragile integration processes that are occurring in many regions of every continent, and why we like to actively participate in all debates taking place between Europe and those regions. We know, through our own experience, that an integration process is not without hurdles and even without competition among the different participants. But the fact is that only with strong regional organisations, preserving each of them their own social and political models, will we be able to build up a multi-polar world to avoid a savage and uncontrolled globalisation which, most probably, would open the way to a globalisation of poverty and to a decrease, at its lowest level, of economic and social rights all over the world.

Now let me say something more about how Europe can and should continue to play its role. First of all, I am firmly convinced that if we want that role to continue, further enlargement of the Union should not mean dilution of the integration process. Until now, the resolution of the equation between enlargement and integration has been achieved by giving priority to the economic side of our integration process. We started with a customs union, then we moved on to a single market and, more recently, to a single currency. As a result, the political side of this process was seen as a product of the economic side or simply as reminiscent of it. In other words, the logic of the integration process was, even if progressively less so, what has been called a functional logic. However, at this stage, to follow this functional logic does not seem to be possible any more.

I think that for the first time in our integration history it is politics that must take the lead and confront us with problems that must be overcome if our integration process is to continue successfully. In my view the main problem that confronts us is a problem of democratic deficit. However, it would be naive to think that this deficit can easily be diluted by a mere institutional reform. That is not so.

The problem has deeper roots and goes straight to the notion of a European public realm. The essence of modern democracy does not lay in the formal methods that make institutions work and on the democratic vote of the people, rather in an interactive communication flow between the political power and an organised civil society. If this is what occurs at national level, the same cannot yet be said at the Union level. Because, quite simply there is no such a thing as a European public opinion or a European civil society. The interactive link between institutions and public opinion that we experience at national level simply does not exist or may just have a rudimentary expression at European level. What is sometimes interpreted as the views of a wrongly called European public opinion is not, after all, more than the addition of I5 national views.

This is why the direct election of the European Parliament does not solve by itself the problem of the degree of legitimacy of the institutions. We should commit ourselves to the progressive building of a European civil society and a European public opinion. This is not an easy and short-term task. Should we succeed, we can then be sure that the right conditions are in place for governments not to feel constrained by what their respective national public opinion thinks or wishes, when they debate Europe. Governments and European institutions would then tend to act in accordance with the wishes of the Europeans.

A kind of nationalism still tends to prevail and Governments know that, first of all, when they go home, they have to answer for what they were or were not able to achieve. This was clearly demonstrated by the debates that took place You will recall that in the European Council in Nice we not only had to defer a decision on the final status of the "Charter of Fundamental Rights" but we also had to confront heated debates on the number of votes in the Council and the number of members in the European Parliament.

I must say that my main objective in Nice was not the protection of Portuguese specific interests, but rather an acceptable balance of power among member states in the framework of efficient European institutions.

On a positive note, we can undoubtedly claim the process of introducing the Euro as a highly successful one, with understandable fears felt here and there. In general, the process is going on without any major troubles and in Portugal it is generating hope and contributing, I think, to strengthen our European identity. In my view, the Euro will indeed be a success precisely because it answers to the needs and aspirations of the Europeans in face of the realities of the contemporary world. But now we have to face the post-Nice period, which raises very clear and important questions that need to be tackled. In my view, there are two main ways to address the problems of the post-Nice period: a big leap forward, which would imply the move in the direction of a federal structure of government. the second way would be to follow a gradual approach combining the progressive development and deepening of the federal pillar - with the strengthening of the Commission and the European Parliament - together with the enlargement, as wide as possible, of structured areas of inter-governmental cooperation supported by the European institution, what we have called in the Lisbon Summit an open method of coordination.

In fact, in the Lisbon European Council we were able to experience the potentialities of this formula. We agreed in a number of European objectives, correspondent national targets and methods of evaluation based on "benchmarking" to be applied to a large number of areas: education, science, fight against exclusion, employment, innovation, information society. The progressive reinforcement of the open method of coordination should add to the normal exercise of the competences by the Union's institutions, not replace it. This second formula has obviously the disadvantage of being politically weaker and more confusing from the institutional point of view. But it has two important advantages: it allows an easier deepening of the integration process and a working system better adapted to the heterogeneity of an enlarged Union. The same reasons that made us in Nice smooth the conditions to implement enhanced co-operation. The creation and the process of gradual introduction of the Euro process is also a good example of this kind of concept.

It should also be pointed out that both formulas must acknowledge that Europe has, or is, a civilisation, but not a culture. The culture is at the very core of our national identities which are not to be subdued in other dimensions of the integration process. This is the main factor of legitimacy of the principle of subsidiarity.

All this said, and whatever the way we may choose, there is an underlying question which, in my opinion, is of a decisive importance: the question of credibility. The Union will only attain credibility if this exercise encompasses the Common Foreign and Defence Policy, where we are still at the beginning of the road.

I can assure you that Portugal faces all these questions with an absolute peace of mind. We are a very old nation and State, our borders remain now as they have been since the thirteenth century. The President of Brazil, and my close friend, said recently that Portugal, by the way of her maritime expeditions, was the inventor of globalisation. We are geographically and demographically small. But we have a strong national identity and unbreakable unity. So you may understand that our mood is one of confidence and tranquillity when addressing the "federal" debate. In any case, a special remark can not be avoided.

Large States have a greater responsibility because for whichever the way we choose to move forward, we are deemed to fail if we try to conduct the process under a Directory logic. The problem of Directories does not lay only in a lack of political legitimacy. It is also a problem of efficiency. Indeed, experience tells us, including in the European Union that throughout European history the interests which proved to be less compatible are precisely those of the large States. In our view, the decision is already taken. We are ready for the debate. Whatever the way, Portugal will always be on the forefront of those willing to build a more united, prosperous and democratic Europe. And, of course, a more balanced, peaceful and progressive world.

Signed articles represent the views of the authors only, not necessarily those of Socialist Affairs or the Socialist International

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