The World and the Dark Clouds

(Baonghean) - Another week has passed with not-so-optimistic signals on the political stage and the global economic future picture. And to dispel the dark clouds covering the global "super agency" or the development prospects of countries is not simple, not something that can be rushed in a day or two...

United Nations powerless?

The recent bombing of an aid convoy in Syria has cast a pall of pessimism over the world, leading many to believe that all the political wrangling and negotiations have been for naught. It also raises questions about whether the United Nations still has an effective strategy for helping the unfortunate in war-torn parts of the world.

The bombing of an aid convoy in Syria has raised questions about the role of the United Nations. Photo: AFP.

Even in an article in DW, author Ines Pohl asserted that the United Nations is now powerless, its structures are outdated, inactive and do not know how to save the Syrian people.

When the UN was founded in 1945, the world was very different. The legacy of World War II was still evident, and global political institutions were created to avoid a repeat of that tragic event. The five permanent members of the Security Council were given the power to decide, preventing any superpower from becoming too powerful. Today’s major economic powers, such as Brazil and India, had little say in the matter. Even postwar Germany did not join the UN until 1973.

Meanwhile, the central structure of this “super-agency” is largely the same. Russia, China, or the United States still have the power to veto any resolution they don’t like. Of course, this also affects the selection process for the Secretary-General, preventing candidates from having a clear and strong vision for leadership, and ultimately choosing someone who is willing to take a middle path, play it safe, and avoid taking a stand on difficult issues.

In a world where terrorism is on the rise and states and political structures are disintegrating, the United Nations should be more important than ever. Yet it often lacks the courage or the strength to reinvent itself to meet these challenges.

Partly because the victorious powers of World War II refused to admit that they alone could not resolve conflicts such as the one in Syria, they had to relinquish some of their power to make the UN General Assembly truly a powerful tool for promoting greater understanding between nations.

As US-Russian relations grow frostier, any broad reform of the United Nations is unlikely to be on the agenda. Ironically, this is happening under a US President like Barack Obama, who has long recognized that the current ideological struggles cannot be put to rest without accepting a new world order.

Amidst this deadlock, Germany has announced its candidacy for a non-permanent seat on the Security Council for a two-year term from 2019. Whether the leading European country can help remains a question for the future to answer, but there is hope, because Berlin has more or less proven itself to be a good mediator between opposing sides, such as in the Ukraine crisis.

And yet, it is argued that it is better for politicians to yell at each other than for them to refuse dialogue and turn to “talking” with force.

Global Economy: Gloomy Outlook

Many will remember the Wall Street crash eight years ago, followed by a severe global economic crisis. Trillions of dollars in lost output, millions of jobs lost, and thousands of promises to turn things around from politicians and policymakers – from Barack Obama and Gordon Brown to David Cameron and Christine Lagarde.

Yet, nearly a decade on, little has changed. In the United States, Britain, and other developed countries, policymakers are talking about sluggish, “bland” economic growth. In the developing world, the situation is even more dire!

This is also the information given by the world's two leading economic research agencies, the Organization for Economic Cooperation and Development (OECD) and the United Nations Conference on Trade and Development (UNCTAD), in the middle of last week.

The economic outlook for the coming period is not very bright in both developed and developing countries. Photo: EPA.

According to the Guardian, both reports are cloudy and lack the light of hope. UNCTAD even warned that the world is on the brink of “entering the third phase of the financial crisis”.

Today, much of the low-interest lending from the US Federal Reserve, the Bank of England and the European Central Bank is being funnelled by financial speculators into lucrative markets in South Africa, Brazil, India and elsewhere.

An estimated $7 trillion was pumped into emerging markets in the form of bank loans and bonds in the five years following the collapse of Lehman Brothers, the largest US banking failure. The massive inflow of capital has left developing countries now saddled with a mountain of private debt.

The private, non-financial sector in many parts of the developing world now has debt obligations worth nearly 150 percent of its income. By contrast, the figure in developing countries is closer to 80 percent. So, in a context of falling commodity prices, it is no wonder that developing countries are now limping along rather than accelerating.

Not to mention that over the past decades, the share of GDP going to workers in rich countries has been falling. These countries have “perversely exploited” social benefits and public services to pay for tax deductions. A similar pattern is happening in poor countries, and the result is that everywhere people see “huge” debts accompanied by disappointing growth.

In the short term, the big players like the US and Europe will need to do more to stabilize the global economy, through fiscal stimulus and wage increases, even if they face resistance from those who hold the purse strings. In the long term, the flaws in globalization will need to be fixed, to build a more sustainable, inclusive model based on higher wages, stronger tax systems and a stronger public safety net.

Phu Binh