Global Public Goods and development policy

We are living in a world that is growing together ever faster and yet disintegrating ever more. This may sound paradoxical, but it is a core feature of a globalisation process taking place in a hardly sustainable manner and – so far, at least – not to the benefit of all people. Growing international integration increases prosperity, but it fails to regulate its distribution. This process must be steered in order to become socially equitable and ecologically sound at the global and individual, in the sense of local, levels. Only if we achieve that we will be able to live in a world of peace and security for all. If we fail, we will prove unfit for the future.

The challenge of designing globalisation is closely linked to questions of participation and of sharing fairly. We must ask ourselves how to spread prosperity and opportunities in a more equitable way. It is unacceptable that one-fifth of humankind still lives below the absolute poverty line and that the gap between poor and rich is ever widening. We must ask ourselves how all people, all countries – including the poorest – can be empowered to play a greater part in shaping globalisation and contribute their concerns. In this respect, I rate quite positively the experience of the WTO ministerial conference in Cancún in 2003, when the so-called G 20 Group of rather different developing countries pooled their negotiating power. We must also ask ourselves what level of supply with public goods – goods, which are really accessible to everyone – we want to achieve for the sake of enabling people to participate in both the design and the benefits of globalisation.

The market, left to itself, has no answers for these questions. They relate to international developmental issues. Political responsibility must be assumed. Today’s development policy has to be understood and implemented in the context of these global questions.


The urgency of Global Public Goods

Fundamentally, the Global Public Goods concept provides us with an approach to address problems and challenges that affect all people, and particularly future generations, by collective efforts and in shared responsibility. The issue is wide access to goods, which are actually the first prerequisite for successful integration in global structures and which cannot be provided by nation states on their own because they transcend borders. Undisputedly, these goods include global peace and security, fair international trade regimes in tune with the interests of developing countries, stable international financial markets and protection from diseases prone to crossing borders.

No doubt, it is high time for such an approach. In the last ten to five years we have seen an unprecedented and substantial change in the international agenda. Among the reasons for this to happen were the end of the East-West conflict, growing interdependence stemming from globalisation, the increasingly obvious limits of designing politics nationally, and the realisation that new approaches to global governance are required. We all witnessed – and some of us served as trailblazers for – an enormous consolidation of international politics. The world conferences of the 1990s led to agreements by the international community on common goals in various policy sectors. This culminated in the Millennium assembly in 2000. The Millennium Declaration and the explicit Millennium Goals provide us with a programmatic common agenda for the 21st century! In spite of all remaining problems, the conference on Financing for Development in Monterrey and the World Summit on Sustainable Development in Johannesburg were further proof of the will to assume responsibility in order to cope with the challenges we are facing. Such elements contribute to a consolidated system of global governance, which is now forming. This can certainly be seen as progress towards the emergence of cooperative global domestic politics, which, given our growing interdependence, is also more necessary than ever. An important aspect of such cooperative global domestic politics will be the provision of Global Public Goods.


The national dimension

The debate on Global Public Goods, however, is not only important in international terms. It also has a national dimension. It is precisely with regard to the supply of public goods that national politics and global trends are closely intertwined. Since the late 1980s, there has been a trend in Germany of providing ever more opportunities to defer corporate taxes, which added up to a reduction of corporate tax rates. This was linked to an immense, globalisation-related international tax competition, which has resulted in a considerable drop of tax revenues for all OECD countries. Consequently, a real financing gap has arisen, especially with regard to coping with public tasks and the provision of public goods, which alarms us Germans too!

Therefore, welfare state structures in the industrialised nations – an achievement of western European countries in particular – are under enormous pressure. Despite tight funds, we must pay for important tasks. We need more investment in education. We want to make family and work compatible for both parents. This will not be possible without setting up child care facilities all over the country. In spite of great demographic change, we must preserve our social security system and make it sustainable. None of this can be done without a secure financial basis.

The debate on national and Global Public Goods enables us to get out of the dead-end street of a neoliberal discourse, which, in the wake of globalisation, questions social values and puts achievements under competitive pressure. That is why, in my view, the debate on Global Public Goods has a positive effect on the domestic debate in Germany and, probably, Europe – even in areas that do not directly relate to international affairs.


Participation of developing countries

For all these reasons, I welcome the setting up of the International Task Force on Global Public Goods, which started working last year under the joint chairpersonship of Ernesto Zedillo, the former president of Mexico, and Tidjane Thiam, the former planning minister of Cote D’Ivoire. Coming to grips with defining, prioritising and financing Global Public Goods is an urgent matter.
As the German Development Minister, I find it especially important that the views of the South decisively weigh in on the debate. I regard it as extremely positive that this demand is reflected in the composition of the Task Force. Equally, I welcome the fact that the Task Force's work will focus on goods, which are significant for industrialised nations and developing countries alike. The Global Public Goods approach must not remain a theoretical exercise of economists, mainly in the North, nor should it be abused as an instrument for pushing through particular interest. In my view, active participation of developing countries is a precondition for avoiding such deviations.
What is at stake beyond the work of the Task Force is how decisions are made at the global level: Which tasks are of priority? Which of them truly deal with Global Public Goods? Decisions on such matters must involve all participants ("publicness of decision“). We need a common understanding and, of course, representative, participatory and democratic decision-making. In this context, we should keep in mind the idea of establishing an international body to deal with global economic and social issues at the highest level on the basis of partnership. Even if this proposal musters little support at present, I am convinced that we need such a body in the sense of a "global council" or "UN Security Council for Economic and Social Policy", in which all the world's governments and all important international organisations would be represented – and I do hope that the Task Force will push this issue along with its other objectives.

Our Ministry actively supports the work of the Task Force and we have already taken initial steps in doing so. BMZ – in cooperation with the Federal Ministry for the Envi-ronment, Nature Conservation and Nuclear Safety and the Foreign Office – held an international conference on Global Public Goods in Berlin last November to contribute to the Task Force’s work. The event particularly focused on experiences with Global Public Goods in the environment sector and on innovative funding instruments for Global Public Goods in general.

As part of our direct support, BMZ will subsidise studies and consultants for the Task Force. Next to France and Sweden, the initiators of the Task Force, we are the biggest donor. BMZ will also, probably in November this year, host a mid-term review meeting of the Task Force and its supporters.


Core issues for the Task Force

In my view, the following cornerstones will be of central relevance for the Task Force over the next two years:

Global public goods and the development agenda: The debate on circumscribing and prioritising Global Public Goods must stay connected to the "overarching" international agenda, to the Millennium Declaration and the Millennium Goals. From the very beginning, moot points for the implementation of the Millennium Goals have been: What efforts must be made at the national level in the developing countries? How can we industrialised nations directly support our partner countries in the South? And, at the same time, what efforts are required at the international level? Quite clearly, the industrialised nations have to make their contributions.

National responsibility and international concerns: It would not make sense to rate all international problems as Global Public Goods or "bads" in undifferentiated terms. We must distinguish between national responsibilities on the one hand and international concerns on the other. The Global Public Goods concept is certainly not designed to shift ownership of national public goods into the international arena. Precisely in the spirit of the Monterrey conference, that must not be the case. Education and basic public health services, for instance, quite clearly are issues of national responsibility. Any other arrangement would be to the disadvantage of the populations affected. Nonetheless, it is obvious that some countries are not in a position to assume this responsibility. And it is exactly here that the international community and development cooperation are obliged to become active.

Principles and instruments: Feasible basic principles and instruments are needed for the implementation of the Global Public Goods concept. We should rely on what has been tried and tested, on what we have learned, for example, in the global environmental goods sector. Principles such as joint but differentiated responsibility and the need for additional funds have proved useful, for instance, in the context of the Global Environment Facility. The Task Force should consider to what extent these principles may sensibly be extended to other Global Public Goods. Even though each country is meant to assume basic responsibility for its own development, the industrialised nations are under a special obligation because they have a (history induced) development “lead” in terms of knowledge, technologies and capital.

Financing: It would be disastrous if the impression were to arise that Global Public Goods might be funded at the expense of global poverty reduction. Fundamentally, more money needs to be mobilised in all sectors that make a more peaceful and more equitable world possible. However, when we are dealing with tasks, in which the industrialised nations’ own interests are evidently pre-eminent, additional funds, on top of current ODA spending, are the order of the day. I would like to remind you of the so-called North-South Report of the Brandt Commission more than 20 years ago. It already had made proposals in this respect. Over the next few years, we will have to gain support for innovative approaches on funding in the industrialised nations. At the national level, it has largely been accepted that our governments impose taxes in order to provide public goods such as education, the rule of law and protection from violence. I think it must equally become a matter of course that new international financing mechanisms are necessary to secure and produce Global Public Goods. In this context, the Task Force would be well advised to discuss proposals concerning, for example, taxes on foreign currency transactions or payments for use of global environmental goods.

In many respects, development policy is playing its part for the provision of Global Public Goods, for example by co-designing the world trade system, by means of the debt relief initiative or the reform of global institutions like the World Bank. Development policy is also supporting developing countries implement international agreements on the provision of Global Public Goods in the environmental sector for instance. On the other hand, to be successful, development policy needs favourable conditions globally.

May the Task Force be very successful. After the conferences in Monterrey and Jo-hannesburg, it has picked an extremely good “time window”. I hope that the Task Force will influence public opinion in such a way that positive effects for a more peaceful and equitable world will be achieved.

The website of the Task Force on Global Public Goods is at
www.gpgtaskforce.org

Heidemarie Wieczorek-Zeul
is the Federal Minister for Economic
Cooperation and Development.