Today's date:
Spring 2009

Economic Crisis Can Deepen Global Links

Kofi Annan was the seventh secretary-general of the United Nations, serving from 1997 to 2006, and is now chairman of the Kofi Annan Foundation.

Geneva, Switzerland—Every day the prospects for the global economy look bleaker. We don't know how deep or long-lasting the downturn will be. But we do know there is plenty of pain to come.

In every crisis, however, there is opportunity. If we have the courage to learn the lessons of the last year and put them into practice beyond the economic sphere, we can put in place new foundations to reshape our world for the better.

For the roots of this crisis go beyond an abject failure of financial governance and neglect of warnings of the risks being run. Connections between economies have been revealed which were not fully understood, let alone regulated. There may have been endless talk of globalization. But it is very clear there has been a lack of recognition of what this means for us all.

We have now learned decisively that no country, no matter how powerful or prosperous, can control the forces of globalization on its own. The lack of inclusive processes and institutions needed to manage the risks and ensure all gain from the benefits has also been exposed.

The present crisis has already led to unprecedented international cooperation. There has been coordinated action to protect the financial system from collapse, to try to stimulate the global economy and find new rules and structures to prevent this disaster being repeated. But while the G-20 is a better and more legitimate forum than the g-8, it does not go far enough to give the poor and excluded a voice. After all, they are the ones most affected by the decisions made.

The real lesson of the past year is the urgent need to build on and extend this multilateral approach. It means accepting that the rich and powerful alone can no longer rule the world.

It means, too, recognizing that the only lasting and effective solutions to the challenges we face will be those which have the security, opportunity and welfare of all at their heart. Fairness and equity can no longer be an afterthought. No one's stability, security and prosperity can be guaranteed unless we strive to tackle the gross inequality of wealth, opportunity and influence in our world.

What is needed is a fundamental change of mindset. Solutions to the financial crisis must look beyond the impact on the market, financial institutions and developed countries. They must also focus on jobs, family incomes and the effect of the slowdown on the poorest countries.

Market forces are the engine for economic growth. But they need to be well regulated to ensure fairness and equal opportunity for all.

The present crisis has underlined the importance of governments in effective regulation of the market. But they must also look beyond their borders and at the long-term picture. Richer countries cannot use the excuse of tighter finances to renege on their aid promises to the poorest on the planet. As global trade contracts and protectionist instincts are emboldened, the danger is that those least responsible for the present crisis will be hardest hit.

Africa's progress, in particular, is under threat. We need not just to continue but to increase support as promised to help the continent overcome its problems. Development aid must be targeted at encouraging long-term economic growth, good governance and human development as well as immediate crises. We need a uniquely green revolution in Africa, transforming every aspect of farming to ensure food security.

It is Africa—and the developing world as a whole—which will be hit hardest, too, by climate change. It will affect every country and society, with the damage dwarfing the serious problems caused by the financial crisis. But the most severe impact will directly fall on those who have done the least to change our atmosphere.

There must be a radical, effective and universal agreement at Copenhagen this year based on climate justice and the principle that the polluter pays.

The developed economies must take the lead in cutting their emissions. They must also fund the transfer of knowledge needed to help the rest of the world to grow their economies sustainably and to adapt to the inevitable change in our climate already under way. No other approach will work.

Breaking our addiction to fossil fuels and investing in green technologies will also help us deliver energy security, jobs, prosperity and sustainable economic growth.

This will, however, require robust and inclusive global economic, financial and political institutions. We need fundamental reform to involve a far wider range of countries and voices meaningfully in decision-making. Without this, the solutions reached will neither match the scale of the problems nor have the legitimacy to be effective. As the woeful international response to the conflicts in the Middle East and elsewhere highlights, our structures are at present incapable of meeting the challenges of today, let alone tomorrow.

The new American administration gives us hope that, in all of these areas, progress can be made. But other governments and actors must play their part in building on this momentum.