Global Trends by Martin Khor

Monday, 18 April 2011

New challenges 20 years after Earth Summit

The United Nations is preparing for a new sustainable development summit in 2012, two decades after the Earth Summit.  It must take action on new and emerging challenges facing the world.

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In 1992, the United Nations held a summit on the environment and development crises, known as the Earth Summit at Rio, Brazil. When the 100 over political leaders adopted the Rio Principles and the action plan called Agenda 21, there was euphoria.

At last, the world leaders had pledged to take action on a wide range of environmental, economic and social problems.

Almost two decades have gone by. Most of the environment problems (like global warming, water scarcity, biodiversity loss, deforestation) have worsened.

In addition, there have been new and emerging challenges.  These are to be examined in a new Summit on Sustainable Development at Rio next year, to mark the 20th anniversary of the Earth Summit.

The first major problem since 1992 was the emergence of a global policy framework contrary to the cooperative sustainable development paradigm.

The 1992 framework was holistic (having three pillars of economy, social development and environment).  It also has an international cooperation dimension, with the developed countries agreeing to help developing countries with finance, technology and global economic reform. 

However a competitive market-driven globalization paradigm emerged with greater force since the mid-1990s, with WTO at its centre.  Its strong compliance mechanism gave it an advantage over other international organizations and frameworks, and led countries to give greater priority to this framework.   The bilateral and regional free trade agreements also have strong compliance mechanisms.

Many provisions of these trade agreements can hinder sustainable development policies.  The Washington Consensus policies tied to IMF and World Bank loans have also been contrary to sustainable development.

However, there is a silver lining.  The de-regulation and liberalization assumptions that drove these policy frameworks have been put into question by the financial crisis.  Many developed countries are re-regulating their financial sector, and are themselves reluctant to liberalise their

trade (agricultural subsidies and tariffs; inflow of foreign workers) though they are pressing developing countries to do so.

It is thus time to review the trade agreements as well as the IMF-type policies and align them to sustainable development goals.

A new and stronger sustainable development framework should be established, which has equal or superior weight to the orthodox globalization framework and institutions.

A second new development was the global financial crisis and economic slowdown.  The effects include reduction of export earnings for many developing countries, and uncertainty on future export prospects.  This makes it more difficult to implement sustainable development policies. The 2012 summit should usher in a reform of the global economic system.

A third challenges is that developed countries failed to meet their commitments to transfer funds and technology to developing countries.   While the aid target of 0.7% of GNP has not been met, there are ominous signs that some developed countries facing budget constraints are sharply reducing aid budgets.

Moreover, there has been little technology transfer because a new global regime on intellectual property, set up after Rio 1992, has made it difficult for developing countries to access technology at affordable cost.

The new Rio Summit should reaffirm the 0.7% aid target, and state that developed countries agree to maintain and increase their aid budgets even if their overall budget is reduced.   It should set up a new sustainable development fund and a technology transfer agency.

A fourth problem is the tremendous jump in world food prices.  Many developing countries had been food self sufficient or even exporters, but government withdrawal from agriculture and drastic lowering of tariffs, caused food imports to surge, damaging  local production.

The entrance of speculators in the commodity markets also contributed to the spike in food prices.

Thus action is needed to enable local food production in developing countries and to curb speculation in commodity markets.

A fifth challenge is the rapid depletion of natural resources and the emissions of Greenhouse Gases.  Thus, the developing countries’ fair access to the remaining resources, and to technologies to enable sustainable development utilizing less and less natural resources becomes a major challenge.

Thus the issue of equity in the sharing of environmental and developmental space has become a very acute challenge.  To resolve this in a fair manner requires a major change in mindset and the operationalising of equity and development principles.

The sixth major new challenge is that the number, intensity and effects of natural disasters have increased very significantly.

If 2010 was the worst year in recent history, 2011 will be worse, because of the Japanese tsunami.  In future the problem will worsen as climate change effects intensify.

At present, Countries affected by floods, earthquakes, forest fires etc have to appeal for aid mainly on a case by case basis.  Too little money is available and it comes after a delay.

Thus, UN agencies dealing with natural disasters should be strengthened.  And a new  mechanism should be set up to deal with damage and loss resulting from natural disasters .  Developing countries should obtain funds to cope with the disasters and to rebuild their damaged infrastructure and societies.