Page 51 - BNE_magazine_11_2019

bne November 2019
Opinion 51
the world uncertain,” Martin Schulz, former president of the European Parliament from 2012 to 2017, said.
Schultz pointed to the decision by Trump to withdraw US support that was provided to the Kurds in Syria as they were comrades-in-arms who’d fought with the Americans to destroy Islamic State (IS). He observed that the move, even opposed by leading lights in the Republican party, was symptomatic
of what is going on. “This development could lead to war,” warned Schultz, adding that the events in Syria are only an example of the increasing unpredictability in the world.
“After the fall of the Iron Curtain we hoped that we would live in a more stable world and what is going on now, in my eyes, is without precedent,” said Schultz.
The panel concluded that these tensions are at root caused by failures of the model that was driving the world 30 years ago. Schultz argued that the consensus was that the political and economic model had been settled, that growing international trade was going to deliver all the goods needed for everyone, that markets should be open and that globalisation was an unstoppable force. Greta Thunberg referred to this problem in her controversial “How dare you” speech during September’s UN Climate Week, lambasting the “fairy tales of eternal economic growth.”
“Where we are now is that this growth model that just focused on just GDP and GDP per capita did not deliver. We have
a clear challenge of inequality – even in in the developed markets. The top 10% wealthiest people in OECD countries have 50% of the wealth. Almost half the population have not seen their situation improve and that is fuelling populism. We are not for dogmas. We are for results,” said Gabriella Ramos, a Mexican who lives in Paris where she is the OECD chief of staff and sherpa to the G20.
The rising inequality is a function of the failures of the economic model, and that same inequality is a corrosive agent on politics that is preventing solutions. Ramos went on to highlight the climate crisis, which is another aspect of the same problem and why the failure of the economic model is also on the agenda of activists like Thunberg.
“And we are not even growing, which was the basis of our model!” exclaimed Ramos. “We have this idea that markets will always balance themselves, but it is not working.”
“The inequalities of wealth and income have led to inequalities of access to politics. We are democratic? But who pays for elections? Where does the money come from? We need
to understand that even if the elections are based on
a democratic system, they are sometimes skewed towards economic interests,” said Ramos.
Ramos followed up by pointing to an OECD study that found economic mobility has rapidly declined in recent years:
a child born into a poor family has only a 15% chance of improving their social standing, whereas one born into a family where both parents have been to university has a 65% chance.
There is a stratification of society into haves and have-nots where average incomes have gradually sunk in real terms over the last 20 years. It has led to anger and frustration that are driving the rise of populism and the far-right.
Whose values count most?
The answer to all these problems is to return to our fundamental values, which have got lost in the fog along the way. What those values actually are and how they should be implemented is itself a fraught question.
Vyacheslav Nikonov, chairman of the Committee on Education of Russia’s State Duma and dean of Moscow State University School of Public Administration took a confrontational view, but voiced many of the complaints coming from Moscow about the way the world is run.
“Trump is a symptom of the problems and not a cause,” said Nikonov, who also is chairman of the Russian BRIC research institute. “He is doing exactly what he said he would do during the elections. In fact the world is getting more and more predictable. Since the fall of the Berlin Wall we have seen the relative decline of the West. On the day the Berlin Wall fell the West accounted for 80% of the global economy. Now it’s closer to 40%. The rise of the rest is clear. China and India account for 60% of growth.”
Ironically these countries adopted the very same economic model that the West has been using and have driven the
rise of the rest. Moreover, that rise has been aided by active investment and help from the West: the term BRIC, for Brazil, Russia, India and China, was itself coined by Goldman Sach’s chief economist Jim O’Neil to sell investments in emerging markets to its clients.
But Nikonov went on to criticise the West for its arrogance in trying to impose its values on Russia, which is a sovereign nation that will act in its own interests.
“You describe the Western values, but always as if they are superior. The values are fine. Who is against freedom of speech or democracy? But we in the East do not buy the superiority. We also know anti-Semitism, racism, colonialism, fascism, Nazism, communism – these are all Western ideas. They were not invented in India, Russia or China,” Nikonov said.
“If we are to write new rules they would have to reflect
the decline of the West, but I can’t image Trump or the EU negotiating anything. That means we are moving into a rule- less world where the old factors of power matter. And we are moving into a world there is a new bipolarity emerging. And
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