Speeches by The Hon RJL Hawke AC
OECD International Forum for the Future
Hanover, 24-25 March 2000
The Hon R J L Hawke's concluding contribution to the OECD International Futures Programme's Forum for the Future in Hanover 24-25 March 2000
The conference has been a most useful exercise in attempting to come to
grips with understanding the issues and challenges of governance in the 21st
Century.
At the outset - I know I speak for all present - participants and observers
- in thanking those who prepared and spoke to the conference papers, the
various participants for their interventions, NORD/LB for their splendid
organisation, hospitality and support, and the OECD staff and yourself, Mr
Chairman, for the contribution that each has made.
I am not going to attempt to summarise the whole conference - for two
reasons:
It would require much greater time to consider and absorb the conference's
many messages;
Such a summary will undoubtedly be provided in due course by Wolfgang
Michalski and his staff.
Rather, I have been asked, and am happy to give, some personal comments and
reactions to the discussion, debate and subject matter that we have been
covering in the past one and a half days. I hope to be less than half an
hour.
While I am the product of several universities, I think that academia has
already been more than adequately represented, so I will tend to speak more
from the perspective of an old, i.e. experienced, politician who has had
some direct involvement in the problems and challenges of governance.
I deal with a number of points.
First, the discussion reinforced one's prior perception of the vital role of
capital in any consideration of governance in 21st Century.
How will we handle the increased global mobility of capital from one
jurisdiction to another? Will this lead to a "race to the bottom" in
environmental, social and other situations, to a widening of economic
inequalities, to a plutocracy rather than a democracy, as Martin Albrow
asked yesterday?
The indisputable fact is that this enhanced mobility can undermine the
capacity of governments to do their job of organising effective governance
either by themselves, by market forces, or by the civil society.
A loss of tax base diminishes the capacity of governments to provide
services reasonably expected to be provided by their citizens.
Income distribution is shifting towards capital and away from labour; the
distribution of capital is skewed and concentrated, so that the income tax
base is more unequally distributed nationally and globally - and the tax
rates that can be applied may be low, because of competition between
governments, and the capacity of those with wealth to organise their affairs
to minimise tax.
As a practical matter, the threat of loss or serious erosion of the tax base
is as difficult as it gets in terms of providing good governance; not just
the practical question of the capacity of the government to provide
services, but the very stability and workable cohesion of society can be put
in question.
How to handle this problem in an equitable and efficient way will be one of
the most important questions in the 21st Century.
We are all aware of proposals that have been advanced which go to or impinge
upon this question - for example, the Tobin tax on short-term movements of
capital, and the idea of a harmonised tax regime on profits levied in the
places where profits are made.
Of course, there are always arguments that can be raised about loopholes in
the tax net that may act as serious impediments to the introduction of such
proposals.
I am not arguing for any particular proposal. What I am saying is that what
is required is effective international co-operation - global governance - if
the crisis is to be properly dealt with.
It requires what Perri 6 described as "a coalition of the willing" covering
sufficient of the major economic players to make the regulation and
contribution of capital be effective.
If this is not done, good governance in the broadest sense will be severely
constrained.
The discussions have also been Eurocentric.
Issues of good governance in the 21st Century, particularly as they can
potentially affect the peace of the world, will require much more attention
to Asia, Africa and South America than has been given over the last one and
a half days.
In this context, and especially in the case of Asia, I would go to the
dangers of gratuitous intervention in the governance of others. The United
States presently suffers about 40,000 deaths annually from guns in large
measure attributable to the refusal of legislators to stand up to the gun
lobby. These same legislators preach at China about its denial of the
sanctity of human rights and threaten retaliatory action in the field of
trade. What would be the reaction if China were to propose an international
embargo on US exports until the laws in the United States were changed to
reduce the availability of guns to citizens, thereby calling a halt to this
slaughter?
Being less interventionist in the governance of foreign countries doesn't
mean abandoning the values that we regard as important - but it does raise
questions about the sensible handling of those issues in our international
relationships.
A new shape of power and population is likely to emerge in the 21st Century,
with China and India, Brazil, and later Indonesia, coming to the fore.
We cannot expect, in terms of global governance, a continued cosy
divvying-up of World Bank and IMF posts between the US and Europe. It is
gratifying and appropriate that the US and Europe have now had to let New
Zealand and Thailand split up the top position at the WTO. I hope this is a
situation that Europe and the US will become more used to.
This leads me into what I regard as a most surprising omission in the
discussion at the conference: population issues.
As background, in 1900 there were 1.7 billion people in the world; in 1962
there were 3.4 billion; and in 2000 there are 6.2 billion.
These population changes in the 20th Century, and further changes in the
21st Century are going to have a major impact on governance in the 21st
Century.
We can see this already in pressures on the global environment - inevitably
leading to pressures for more effective international co-operation in
governance on these issues.
But the population shifts will also put pressure on relations between N/S
countries as population-significant countries grow economically relative to
population poor and population-declining countries (which include the
European and European-derived countries - as well as Japan).
What immigration regimes are going to be adopted? What social policies to
increase fertility? Major issues such as these were given no consideration.
The relevant issues are not just those of aged care, but broader questions
of attitudes to immigrants, and - in considering the possibilities of higher
birthrates - much more consideration and attention to the life desires of
women relative to men.
Good governance in the 21st Century will require a greater role by business,
and corresponding adoption by business of responsible codes of conduct as
corporations and individuals.
Ted Turner was mentioned in the discussion. I would like to mention an
Australian, Jac Nasser, the head of the Ford motor Company in Detroit, a
company that employs 400,000 people worldwide. Nasser has ordered that a
personal computer be provided in the house of every employee. In this way,
Nasser clearly hopes that his employees will maximise their chances of full
participation in the 21st Century as citizens, and in particular that there
will be increased opportunity for the education of their children.
The question of politicians leading or following was raised during the
discussion. My own experience in 1983 was that tough decisions were needed
on macro-economic policy, tariff reductions, and the asset test on
government pensions.
As a government we were better placed to make those tough decisions by
sharing information with our citizens which we did at the outset by
convening a National Economic Summit where all major interest groups - all
levels of government, business, unions, welfare organisations and churches -
were represented.
There is also a discernible tendency for a mutually reinforcing hypocrisy to
develop between citizens and politicians, in which the citizens demand the
unachievable and the politicians promise to provide it.
There is also the danger of "decibel democracy", in which the loudest voices
drown out what may be much more reasoned, quieter voices. President Clinton
succumbed to this phenomenon in April last year when he foolishly humiliated
Chinese Premier Zhu Rongji's reasonable proposals regarding China's entry to
the WTO.
Finally, let me repeat what I said yesterday, that the ultimate aim of good
governance must be the provision of peace. This requires effective
international co-operation.
In the 20th Century we were not very good - in fact, we were abysmal - at
meeting this requirement. We must do better in 21st Century.
I will conclude by repeating my thanks to all involved in the conference,
particularly on behalf of the three Australians who participated as the only
representatives of all the people of the world South of the equator.