0.6 The end of the west  (Page 13/19)

Its definitive characteristics are the universal availability of information through the internet; the internationalisation of production, shifting the balance of power between corporations and all but the most powerful governments in favour of companies; the scale and speed of global financial flows (at least $1.5 trillion per day); and the dissemination of Anglo-Saxon perspectives and artefacts by global broadcasting, branding and advertising. The principles of market economics are its leitmotiv, though more atavistic tendencies have prevailed in trade. The commitment to markets has exacted costs: Liberalisation of capital account transactions caused exceptional currency volatility after the Asian financial crisis in 1997/98 and again after 9/11 in 2001. The emerging economies were badly hurt in 1998 and the prescriptions imposed on them were ill-considered. The collapse of the Argentinean economy was precipitated by the flight of global investors from emerging markets in the last quarter of 2001. States with weak institutions and poor internal cohesion are particularly vulnerable. The most flexible and adaptive states have benefited, but 'weak states' in Africa, Central Asia and elsewhere have taken exceptional strain. The configuration of these regions will continue to change, as that of Balkans and the former Soviet Union already has.

The global architecture and the institutional practices underpinning it are failing. The UN and its agencies were designed to address the needs of that era. Their inability to meet the demands of the present is evident in the debate on UN reform, still unresolved despite Kofi Annan’s best efforts, and that about the failure of the IMF in the Asian and Russian crises of 1998. Successive structural reforms of the World Bank and the tensions resonating through (and after) the WTO’s Doha Round, reinforce the point. Institutional crisis occurs when structures and systems cannot adapt to changes in the environments around them. This is all too evident today, not least in the US Administration’s preference for unilateral action.

Kofi Annan noted in 1999 that “... globalisation is a force for both integration and fragmentation ... which has brought ... obvious, though increasingly unequally distributed, benefits to the world's peoples.” A few challenges should be singled out: The need to manage the growing economic disparities between societies when access to information and a sense of relative deprivation is near universal; the need to address the changing nature of threats to regional and global security, including climate change, environmental degradation, refugee flows, and the pandemic spread of viral disease, as well as the proliferation of nuclear weapons technology and the risk of biological warfare by rogue states or non-state actors; the need to accommodate cultural diversity in a systemically connected world; and to learn how to apply the principles of individual freedom, popular sovereignty and the rule of law on a global scale. We have done poorly in all.