Report on the Conclusions and Recommendations
by a High-level Expert Group on

Petersberg, Germany

I. THE SEARCH FOR GLOBAL ORDER
II. NEW DANGERS IN THE POST-COLD WAR ERA
III. PEACE AND SECURITY
IV. THE NEXUS POPULATION-DEVELOPMENT-ENVIRONMENT-GLOBAL WARMING
V. THE CHALLENGES IN THE ECONOMIC AND FINANCIAL AREA
VI. THE NEED FOR EFFECTIVE INSTITUTIONS, MECHANISMS AND INSTRUMENTS
VII. LEADERSHIP IN A GLOBAL ORDER

I. THE SEARCH FOR GLOBAL ORDER

The world is at a crucial turning point. Behind us: almost half a century of stifling cold war and management of superpower confrontation. Before us: the historic chance to move towards a new era of peace, co-operation and dialogue. A few of the contours of a new and more complex world are already evident: the end of the East-West conflict, the demise of the Soviet Union as a sovereign state and strategic superpower, the emergence of new and competing political units, and the proliferation of acute global problems which jeopardize the very survival of the planet. But although the old order is gone; a coherently structured new order offering a predictable framework for international intercourse is not yet in place. Conflict management and international co-operation are vital in this period of transition. Moreover, the new era is inconceivable without a redefinition of the interrelationship between national and global interests, without new institutions, mechanisms and instruments. These will certainly not be created without effective political leadership.

From the Treaty of Westphalia of 1648 to the end of the cold war, the classical world order has been based on the pre-eminent concepts of the balance of power within a relatively stable constellation of states and blocs and the preservation of national sovereignty. Yet, encroachments on the doctrine of sovereignty have evolved and continue to evolve.

The cold war order with its inherent predictability has been superseded by a new constellation: the disintegration of the two-power world and a fragmentation of power centres into smaller political units. Paradoxically, the quest to assert their own identity reinforces the concept of

national sovereignty and interest. The immediate challenge is to establish common structures and a set of rules into which all the new state actors can be integrated and can manage their relations and conflicts. The creation of such a modernized world order may take some 10 to 20 years.

Beyond this, the world community is at present not equipped to deal efficiently with the new threats, which had so far been overshadowed by the cold war but which today are more and more understood as menaces to mankind: environmental degradation and biospheric depletion, climate change, the emission of greenhouse gases, the demographic explosion and transborder population movements, AIDS, drug trafficking, ethnic and regional conflicts, the callous disregard of human rights and the specter of nuclear proliferation and terrorism. A new cooperative global order must be devised to safeguard mankind from self-destruction. New notions and world governance instruments must be incorporated into international law. This task may well stretch over the next century.

Such an order - based on the realities of interdependence and a recognition of the multiplicity of global challenges - will not necessarily lead to greater cooperation or the absence of conflict. The transfer of sovereignty as a result of the process of deepening voluntary cooperation among states may also harbour the seeds of conflict and many of the new states may take an even narrower view of international requirements. Confrontation and tensions may be nurtured by diverging interests, disagreements, and clashes of ideologies or religions. To counter such dangers, new rules and mechanisms of conflict management must be devised and applied.

To grapple with the dichotomy between state sovereignty on the one hand and the new global problems (to be defined by universally accepted standards) on the other, existing mechanisms may have to be strengthened and new ones may have to be created. A central question will be whether in future, as hitherto, the non-violability of the borders of sovereign states will be observed or whether a right - or even a duty - to intervene exists and when it will begin once the agreed universal standards have been violated. There can be no legitimacy of any order in a world which has such extremes of poverty and wealth as exist at present between the North and the South. Unless a better balance can be achieved, there will be no lasting peace. Human rights and market forces have become the dominating features, although autocratic governments persist. Universal standards and principles of democracy exist, but there is no uniformity or commonality of democratic practice. Democracy is inconceivable without pluralism. The degree of economic, social and cultural development as well as the history of each state determine the democratic content and features of a country's political system. Yet, there is a universal dimension to values, first and foremost to the sanctity of human rights. It is the individual - and not the state or relations between states - who ought to be fully recognized as the subject of international law. To protect human rights, a right to intervene is indispensable in the case of massive and sustained violations. This would have been unthinkable under the classical principles of state sovereignty and the inviolability of borders.

II. NEW DANGERS IN THE POST-COLD WAR ERA

The demise of totalitarian regimes in Eastern Europe, the yet uncompleted break-up of the Soviet Union and the establishment of democracy in many parts of the world are being celebrated. But we should not let celebration, or its handmaiden complacency, blind us to the very real dangers inherent in the prevailing volatile situation. They must be addressed.

As political units disintegrate into yet smaller units, the national interest moves again to center stage. The quest by minorities for self-determination causes further complication, undercutting the sovereignty of a larger entity. In the process, a complex set of territorial disputes may arise, which the international community must help to resolve. Yugoslavia or Azerbaijan serve as unhappy reminders of the potency of nationalism and the drive towards political fragmentation.

The political and economic changes taking place in Eastern Europe are a particular source of instability. Democracy is by no means firmly established; there may very well be a resurgence of political extremism. The management of the economic transition process in many of these countries may imperil democratic stability if budgetary and monetary policies are not brought under strict control.

Ethnic conflict and border disputes demand rigorous application of the guidelines for recognition of new states (adopted by the European Community). But beyond such conditionality, the West must provide assistance.

In Europe, there is some concern about a possible tendency towards hegemony of Russia and of Germany. The former represents a danger not only for Eastern Europe but for the entire continent. As yet, Europe has no mechanism to counteract such possible developments, such as the creation of a European Security Council. As regards Germany, the European Community may develop into a remedy of the concerns.

We may also witness mass migrations across sovereign borders of a staggering magnitude. This is bound to lead to new types of conflict - from police-type interventions escalating into local and regional armed conflicts or wars. Such migratory processes will not be stemmed unless the main determining factors such as overpopulation, environmental degradation and economic and social underdevelopment are alleviated.

Worldwide, - in spite of their apparent demise - conflicts between ideologies persist. New types of religious conflict also lurk. It is possible that religions and their political interpretations may turn into the ideological instrument for carrying out conflicts which in reality originate from hunger, poverty or destitute economic conditions. There may very well arise new imperialisms in the guise of religious fundamentalism and other forms of religious ideological expansionism. This could happen in Central Asia, in Southern Asia, in South West Asia, in the Middle East and in parts of Africa. It is already happening on the Balkan peninsula. The re-emergence of ideological conflicts disguised as religious conflicts might be a prime source of future tensions.

Local violence may also escalate all over the world, mostly as mutual violence rather than one party indulging in violence against another party. In large parts of the world, handguns and weapons are readily available to individuals, exacerbating problems of local violence, crime and policing. Despite the existence of powerful lobbies in certain countries, efforts must be made to criminalise the possession of handguns and weapons and enforce legislation. This is above all a question of leadership and political will. Local activism may also be an effective way to tackle this problem, another - in persistent conditions - may be international intervention.

Whether a new order will emerge, hinges on the choice of policies, especially with respect to actual or potential threats to peace and security. The most daunting challenges are reviewed below. They range from the proliferation of all weapons of mass destruction to non-military sources of instability in the economic, social, humanitarian and ecological fields.

III. PEACE AND SECURITY

While the cold war period has expired, its ultimate instruments are far from being eliminated. Previously, weapons of mass destruction were in the domain of a few countries. Today, partly as a result of a disintegrating nuclear-armed superpower, a larger number of countries are within reach of their possession. This threatens to induce new type of conflicts. Collective efforts must be mounted to prevent the leakage and proliferation of nuclear weapons, hardware and technologies. Equally, the spread of chemical, biological weapons and ballistic missiles must be brought under control. The world will emerge either with much stronger and more trustworthy restraints on nuclear and other weapons or with no credible restraints at all.

1. Nuclear Non-proliferation and the Break-up of the Soviet Union

In the wake of the break up of the Soviet Union three distinct problems are endangering nuclear non-proliferation:

a) Loose nukes: There are some 15,000 tactical nuclear weapons and 12,000 strategic weapons on the territory of the former Soviet Union posing obvious risks per se. This demands urgently a new and secure chain of nuclear command. Furthermore, decisions on the transfer of tactical nuclear weapons to Russia and their eventual destruction must be fully implemented.

However, the successor states - the Commonwealth of Independent States (CIS) - are neither technically nor financially capable of dismantling such a large bulk of nuclear devices in short order. The cost of their dismantling and destruction is in the order of several billion US dollars per year. The international community assist the newly independent states in this awesome task. The Western countries must speedily provide technical and large-scale financial assistance for the indispensable facilities, control capabilities and storage technologies of fissile products.

b) White collar mercenaries: The know-how of nuclear weaponry might be spread by hundreds of thousands of now jobless engineers, scientists, technicians and specialists. Apart from a mere monitoring of such disquieting developments, the international community must create and fund appropriate employment programmes, in conjunction with the dismantling of nuclear weapons and civilian nuclear programmes to improve the safety standards of nuclear plants.

c) Nuclear aspirations of states: Especially in the Middle East and Asia, countries with clandestine nuclear weapons programmes and ambitions may attempt to attract nuclear mercenaries from CIS countries. This would exacerbate the problem of nuclear proliferation. Measures should therefore be taken in the CIS countries to prevent the brain drain of nuclear expertise.

2. The Future of the Non-Proliferation Treaty

The adherence to the nuclear non-proliferation treaty (NPT) must be broadened. France and China are finally willing to become signatories. The member states of the CIS must be urged to accede to the Treaty. A number of other non-signatory states already have developed or are in the process of developing nuclear weapons and have not yet undertaken to become signatories. The various states concerned should be approached both on a regional basis and through the United Nations. Several other states are thought to be engaging in nuclear weapons development programmes, but have not and are unlikely to acknowledge their intentions or capabilities.

Greater authority must be conferred to the International Atomic Energy Agency (IAEA). It should be empowered to carry out challenge inspection of all nuclear facilities to which hitherto it has not had access on the territory of signatory states.To this end, IAEA must be endowed with substantially increased funding.

More NPT signatories should adopt the policy of the G-7 countries - cooperation on civilian nuclear matters only with those countries who accept full-scope safeguards.

In North East Asia, a spiral danger of proliferation lingers since North Korea could become a nuclear weapon state by the beginning of 1993. If agreements are concluded and implemented putting all North Korean nuclear installations under international surveillance in accordance with the IAEA safeguard regime, the region may witness a comparable peaceful revolution as did Central Europe in 1989-90. If no agreements are concluded, a nuclear North Korea may emerge with major implications for South Korea's military ambitions and for the strategic choices of the United States, Japan, China and Russia.

In 1995, the nuclear non-proliferation treaty will have to be reviewed. As a minimum, the treaty should be extended for a further 25 years. This period must be used to strengthen non-proliferation, including provisions to prevent signatories from withdrawing. The five proclaimed nuclear powers must give credence that they are serious about their treaty obligations to seek a reduction of nuclear arms and that thus the NPT is not a treaty aimed at codifying inequality.

The nuclear powers ought to address publicly the question whether non-nuclear security is meant only for the non-nuclear states or whether non-nuclear security could also be an option for the current nuclear states. This would establish some sort of symmetry. Thus, irrespective of the time and cost factors involved, the elimination of all nuclear weapons should unambiguously be declared a long-term objective.

Towards this objective, the NPT review and extension process should yield certain trade-offs: all nuclear weapon states should voluntarily commit themselves to signing the total nuclear test ban treaty; subscribe to the principle of non first use of nuclear weapons; and pledge not to use or threaten to use nuclear weapons against non-nuclear states and nuclear weapon free zones.

A treaty should be concluded obliging all powers concerned to move towards the destruction of nuclear weapons. The elimination and destruction of all nuclear weapons - and related clean-up operations - will be extremely costly. For the USA and the CIS this effort might absorb about 10% of the defense budget or, for each country, more than US$20 billion a year. Some of the non-fissile parts can be destroyed, while the fissile material would have to be stored. The International Nuclear Fuel Cycle Evaluation explored the issue of international plutonium storage for energy related reasons. This should be re-examined from the security perspective. Securely guarded storage facilities are an essential pre-requisite. Until such a treaty can be concluded, negotiations should be continued aiming at a reduction of the former Soviet warheads to 1000 or 2000. British and French nuclear weapons should then also be brought into account.

The scientific community may have to determine whether deprocessing of fissile material - the opposite of reprocessing -is feasible. If realistic, it might be an avenue to transform weapons grade plutonium and highly enriched uranium to their original physical state.

Measures in the nuclear area must run hand in hand with reductions in conventional forces. Alert and readiness levels must also be reduced. The Conventional Forces in Europe (CFE) treaty, which provides for certain ceilings and for substantial reductions in conventional forces, must be applied. Unratified by the former Soviet Union, it is however now so out of date that negotiations will have to be resumed.

For developing countries, arms reduction is more likely to succeed if linked to an incentive. There should be clear rewards for reduction, e.g. by tying official development assistance (ODA) and the military expenditures of a country. The lower military expenditures would be, the higher the chance that it will receive substantial development assistance.

To curb the proliferation of biological weapons, incentives could equally be effective. The relationship between biological weapons development and human vaccination is so close that some vaccines have dual applicability. A fund could therefore be established to finance vaccination programmes for those countries who subscribe to a biological weapons convention and open their countries up to inspection.

The arms trade remains unregulated and beyond any effective governmental or international control. The industrialized countries should develop an agreed armaments export policy aimed at restraining the pernicious export of weapons, especially to developing countries.

IV. THE NEXUS POPULATION-DEVELOPMENT-ENVIRONMENT-GLOBAL WARMING

Population growth, underdevelopment and poverty are intimately linked. The global population explosion might end up suffocating one national economy after another, gradually forcing an ecological burnout on a global scale, accelerating the greenhouse effect with devastating sea level rise and loss of agricultural lands, and triggering considerable population movements which intensifies the spiral of ever more poverty, disease and conflicts.

1. The Population Explosion

Presently, the world population exceeds 5 billion and is doubling every 40 years. Different scenarios estimate that in the second half of the next century the world population may reach anywhere between 8 and 14 billion. Whether the low or the high estimates will materialize depends on policies and measures taken in the next few years.

20 years ago population growth was cast in terms of North-South antagonisms. Today, (contrary to the rest of the world including most of the Far East, South East Asia and Latin America) the African and Islamic countries are growing dramatically . This suggests that policies have to be devised in the regional rather than the global context.

If by the year 2040, 10 billion people are to enjoy the same opportunities as the present generation - without pushing the planet beyond critical thresholds -, agricultural production would have to quadruple, energy production multiply six-fold and incomes would have to rise eight fold. Can growth on such a scale be managed on a basis which is ecologically sustainable?

To achieve a stable global population at the end of the next century, the total fertility rate, i.e. the average number of children per woman, has to continue decreasing to 2.1 % as soon as possible. If this is done by 2025, the population might stabilize below 11 billions. If it is reached 25 years later, another 6 billion might be added. The overall goal can be achieved through a variety of measures:

- access to, and utilization of contraceptives (at present only about 50% of the fertile couples in the world have access to contraception);

- extended education of girls, preferably until the age of 14-16 years;

- enhancement of women's rights, their status and employment opportunities;

- improvement of basic health services.

The realization of these programmes will require considerable additional financial resources. In order to increase the rate of access to contraceptives from 50% to 70% of fertile couples by the year 2025, it is estimated that the current US$ 4.5 billion spent would have to rise to US$10 billion per year. In particular, international assistance, which is almost negligible now, must be mobilized.

To encourage movement in this direction, no official development assistance (ODA) should be given after 1995 to countries which do not demonstrably pursue any of the above measures aimed at mitigating population growth.

Church and political leaders must recognize that such measures are entirely unrelated to the issue of abortion and its attendant moral questions.

Poverty remains at frightening levels and constitutes an enormous danger to regional and global security. It also accelerated environmental degradation and depletion of natural resources. Poverty alleviation requires a significant increase in assistance to the developing countries. The rich countries must accept their grave responsibilities in this regard.

2. Environmental degradation and global warming

We are mismanaging our planet. Poverty and affluence equally cause environmental degradation. The rich countries utilize a disproportionate share of the world's resources and discharge their waste in quantities that exceed the ecosystem's absorptive capacity. A number of developing countries over-exploit their resources just to stay alive.

National policy in most countries drives unsustainable forms of development and encourages global warming, acid rain, air pollution and related syndromes, mainly as a result of the use of fossile fuels and hydrocarbon energy sources. These policies can be reversed and modified in ways that would not only encourage more sustainable forms of development but also improve economic productivity, industrial efficiency and international competitiveness. Social and political obstacles to such reforms are however enormous.

In its recent scientific assessment, the Intergovernmental Panel on Climate Change (IPCC) projected increases in all greenhouse gas emissions - CO₂ from fossil fuel burning, deforestation, CFCs and methane - over the next century assuming various scenarios. There was a consensus on the scientific reality of global warming and a consensus on its risks and potential impacts. Given the inertia in the world's climate system and the long lead times that are required for international agreement and national action, immediate action must be initiated. If no steps are taken to limit greenhouse gas emissions - if the world in its complacency and short-termism continues business as usual -, global mean temperatures will increase between 2.6 and 5.8 C over the next century.

70% of the world's population lives within 100 miles of the sea. Sea levels have risen by 4 to 6 inches in the last century. The median forecast is for a further rise of 8 inches by the year 2030 and 26 inches by the year 2100. Sea level rise can have disastrous consequences, especially when coupled with intensified hurricane and storm surges. Up to 37 island states are under very serious threat of disappearing if the world grows any warmer. Coastal areas which contain up to one third of the world's population and economic infrastructure could be devastated within the lifetime of our children and grandchildren. Massive flooding of coastal areas may moreover create millions of new environmental refugees, especially in the poorest countries. A three-foot rise in ocean levels would render 72 million people homeless in China, 11 million in Bangladesh and 8 million in Egypt.

In 1985, the highly industrialized countries, including the former Soviet Union, emitted nearly 60% of all greenhouse gases although they account for less than 25% of the world's population. Developing countries with over 75% of the population contributed 40% of all such gases.

The North's profligate use of fossil fuels has occupied virtually all of the global limits for CO2 emissions and the South is now demanding its share of the earth's capacity to absorb emissions from industrialization. As a first step, industrialized countries must commit themselves to realistic reduction targets in greenhouse gas emissions. These targets should provide sufficient "environmental space" for developing countries to increase their fossil fuel consumption over the next few decades.

Global warming is as much a manifestation of a conflict between the present and the future as it is a conflict between the rich and the poor. Any international action will lack legitimacy unless there is a recognition on the part of the rich countries that more must be done to improve the present staggering levels of poverty. Without support for the needs and aspirations of developing countries, a flareup of a serious North-South confrontation is inevitable.

The development of three international conventions is crucial to create a framework for effective international action if combined with enforceable commitments by signatories: conventions on global climate, biological diversity and global deforestation.

Additional financial transfers and an efficient international mechanism are prerequisites for action, principally to help developing countries reduce their dependence on energy sources that emit greenhouse gases, among others, by curbing deforestation, facilitating the transfer of environmentally benign technologies, introducing non-fossile renewable energies and inducing genetically designed plantations to reduce CO2. Part of the additional direct contributions by industrialized countries could be raised by tapping new sources of revenue. This may take the form of a small levy per barrel of oil to be paid by producers and consumers alike, a tax on international trade in environmentally destructive substances, charges for the use of the global commons or a levy on postal rates.

Subsidies tied to agricultural production encourage farmers to engage in practices which draw down the ecological capital, i.e. soil, water and wood. In OECD countries alone, such subsidies total about US$300 billion every year and virtually every country provides incentives to overcut forests. These subsidies have to be stopped and policies put in place to prevent environmental degradation and to encourage an increase in the net forest cover worldwide.

The scientifically confirmed acceleration of the ozone depletion makes it inevitable that Governments agree to bring forward to 1995 the worldwide production stop for CFCs.

3. The Choice of Sustainable Energy Policies

At present, no long-term risk of energy supply shortage exists provided the necessary investments are made. Two thirds of the world's oil reserves are in the Gulf, one third in the rest of the world. But only 28% of the world oil production stems from the Gulf while 72% is produced by the rest of the world. Thus, the rest of the world rapidly depletes its oil reserves, leaving the majority of the reserves in the Gulf.

Over the last 5 years, the identified oil reserves in the Gulf increased by 50% (92% of the world-wide increase in reserves), with a mere 6% of global drilling activities. The possibility of further increasing reserves in the Gulf is enormous. In other words, world dependence on oil coming from the Gulf is increasing rapidly and will grow further. By the year 2000, the United States will be importing 5-7 million barrels of oil a day from the Gulf. Europe, without any increase, will import from the Gulf 1.6 million barrels a day by the year 2000. Japan imports 68% from the Gulf and that percentage will rise if present levels of consumption are maintained.

Fluctuating prices are a reflection of different demand and supply situations and prices will undoubtedly fluctuate in the future. However, the world may face a very serious problem, even a disaster, if a few million barrels a day were to be withdrawn. This would lead to a dramatic increase in prices, ruining the world economy. Close cooperation among producers and consumers is essential.

The lack of resources, management and maintenance of facilities in the oil industry of the former Soviet Union may pose a special long-term risk. All Eastern European countries have been overly dependent on oil and gas supplies from the Soviet Union. Their desire to diversify supply sources should be encouraged.

As regards coal, there are abundant resources which are heavily subsidized especially in Europe and Japan. But even if all countries were to abolish all coal subsidies immediately, coal would not completely disappear as an energy source for electricity generation. In general, most governments subsidize the fossil fuel industry, e.g. the United States to the tune of about $40 billion a year and Canada to about US$4 billion a year.

Nuclear power generation has enhanced the diversity of supply and thus contributed to the flexibility of the energy sector, which smoothened the effects of the oil crisis of the 1970s and 1980s. Moreover, nuclear energy does not entail CO₂ emission and from that point of view is environmentally sound.

The main obstacles to a wider use of nuclear power are issues of safety and waste disposal. Symbolized by Chernobyl, the poor safety standards in Eastern Europe have given rise to a nightmarish scenario. Western countries urgently need to advise and assist in enhancing the safety of existing nuclear plants, their operations and eventual decommissioning. The cost of decommissioning will be staggering in the light of cost estimates for dismantling nuclear weapons.

The overriding issue of nuclear waste disposal remains unresolved. As yet, no country has advanced a technologically convincing solution for the final and secure storage of radiation material.

How can CO2 emissions be stabilized by the year 2000 and a further 20% reduction achieved by the year 2005? Energy policies cannot be reversed overnight but they can to some extent be modified, for example through an increase in the price of fossil fuels to discourage their use, to encourage energy efficiency measures and to stimulate the exploration of alternatives sources of energy. To that end, all countries, not only the European Community, should move to introduce a tax on the use of fossil fuels and should remove discrepancies in the taxation system among countries. The proceeds of such a carbon tax should be used to initiate a bold international - Apollo-type - programme to identify and produce technically and economically viable non-polluting energy sources. Politicians should however not give the impression that with a few higher taxes the CO₂ problem will be solved overnight.

For the time being there is no technology available to reduce CO₂. However, a lot of technologies exist to utilize energy more efficiently. Price has been a driving factor but not the only one in inducing the introduction of such technologies and efficiency measures. One should be careful not to mix the identification of a potential for energy efficiency with its actual realization. R&D must be boosted to accelerate technological development and commercialization of efficiency technologies and to improve their economic competitiveness. Such new technologies should be applied on as large a scale as possible.

While it would be an illusion to believe that far into the next century the world could do without coal, oil and gas, determined steps are required to make larger use of new and renewable sources of energy, especially wind, solar and biomass energy. Without such efforts, by the year 2000 a mere 7% of total primary energy would be generated by renewables of which 90% would be hydropower. All countries should be enjoined to increase efforts and devote financial resources for the development of renewables, both nationally and internationally.

Nuclear fusion holds the promise of satisfying both energy needs and environmental concerns. No single country however can afford to manage and finance a high-technology research project of such proportions. It requires contributions by the entire international community to realize any such a mega project benefitting the global economy as a whole and to speed its commercialization.

V. THE CHALLENGES IN THE ECONOMIC AND FINANCIAL AREA

Unlike the political and security issues, the international economic scene is fundamentally the same as it was before the fall of the Berlin Wall in 1989. The legacy of the communist states has proven to be, by and large, one of economic, social and ecological ruin. The global economic downturn is undermining public support for incumbent leaders, especially in industrialized countries, which are beset by

- sluggish economic growth well below capacity;

- high levels of persistent unemployment;

- abiding large imbalances at national and international levels;

- an unfavorable climate for more open trade and protectionist pressures;

- systemic instability of financial markets;

- ever more growing disparities between North and South.

The market mechanism has proved no panacea either for dealing adequately with these intractable problems or ensuring fundamental social goals. On the one hand, there is no better system than the market economy generally to achieve economic growth and welfare. On the other hand, the market does not by itself create a satisfactory income distribution and leads to the exclusion of the weak, the disorganized and the vulnerable. How does a society provide dignity and hope to those to whom it cannot provide meaningful work? Even in relatively prosperous countries of Western Europe greater disparities of income and wealth have arisen than existed ten years ago. Consequently, in these countries there is a danger of the formation of socio-economic blocs. The trickle down theory has equally failed. The world is going to have to do something about the disparities in living conditions and wealth, not just between the industrialized and the developing countries but also within nations themselves. The West should be gratified that the Eastern European countries and the former Soviet Union have opted for the market economy. But fairly substantial resource flows will be needed to help those countries advance over the next decades.

The market has proved itself to be unable to address the fundamental problem of the environment which it treats as an "externality". Neither do the global problems of poverty, hunger and population growth lend themselves to market solutions.

The industrialized countries will be confronted with substantial new claims for enormous financial resources, in particular related to environmental protection, development assistance, Eastern European reconstruction and decommissioning of nuclear weapons. Unless savings are increased - by private households, business and the government - none of these needs can be met from the aggregate savings available. If anything, the savings ratio of the industrialized countries is shrinking. It is a matter of grave concern, that the largest economy of the world has for several years engaged in a policy of dissaving financed by the rest of the world. Governments should without delay adopt measures to stimulate increased savings.

One new danger to the stability of the world economy has arisen as a result of the globalization of financial markets. Speculative activities are threatening widespread global financial collapse and endangering the required flow of credit and funds into the world economy. Financing has become an international business whereas supervision and regulation remain within the national realm. The supervision of financial behaviour is presently grossly insufficient in many countries, while international supervision is entirely absent. To guard against anticipated financial breakdowns, agreed rules, greater transparency and sound regulatory and supervisory authorities must be developed without delay.

The threat of further slippage towards protectionism and a relapse into trade bilateralism looms large. It will strangle trade - the world economy's primary source of growth. Thus, the multilateral trading system must be continuously strengthened and adapted, beyond the issues involved in the Uruguay Round of GATT, in order to remove the danger of conflict between the main industrialized nations. In this context, the economic folly of enormous subsidies for agriculture cannot be sustained.

VI. THE NEED FOR EFFECTIVE INSTITUTIONS, MECHANISMS AND INSTRUMENTS

Any order would remain abstract unless supported by practical and institutional arrangements to allow it to function. Goals must be commensurate with the tools and the political realities. The very complexity of international relations demands that existing or new institutions complement each other or act in conjunction with one another or in an interlocking constellation - without succumbing to institutional overcrowding. All institutions must, however, have conferred upon them the legitimacy of international rule. A positive byproduct of participation in international and regional organizations is that governments increasingly adhere to common values and standards.

No proper forum exists yet to discuss, coordinate and cope with the cluster of global issues of environmental degradation, poverty or overpopulation. Is there a need for a Security Council-type mechanism, as it is the security of the planet earth which is at stake? No definite blueprints exist as yet. We have not even started to fully identify the relevant questions. One approach may be to strengthen existing organizations. Another may be to strengthen existing international legal instruments.

The dangers at hand call for the evolution of new concepts, modalities and mechanisms, especially in the security area. There is no institution that could ensure mediation activities in case of a conflict, preventive intervention where there is a danger of conflict, and intervention if there is a hot conflict. Conflict management must come to grips with peace-making through the interposition of forces between combattant groups.

For more than four decades, the cold war had marginalized the United Nations. The last few years have been a little deceptive for the UN in the sense that they have been unusually favourable conditions where the Soviet Union and the United States have more or less agreed. But for all its weaknesses, faults and layers of bureaucracy, the United Nations is an indispensable instrument to engineer harmonious international action especially vis-a-vis the new challenges. But it needs to become more effective so as not to dash hopes.

A direct consequence of a reinforcement of the United Nations and its role in the security area would be that governments would need to shift their concept of diplomatic action and conduct of foreign affairs.

In the new order, the United Nations should be entrusted with two main tasks:

a) to establish and manage a reliable system of collective and universal security which comprises peace-making, peace-keeping and enforcement;

b) to work towards a system of collective economic security, including sustainable growth and development.

The proposed collective security structure would have to monitor developments permanently, preempt, prevent or contain conflicts, mediate disputes, assure the protection of small and weak states and deal authoritatively with aggressors. It will no longer acceptable that international action is only taken when a situation is a threat to the interest of the most powerful nations.

Beyond the traditional role of peacekeeping - at the request of parties to a conflict - and enforcement actions agreed by the Security Council (such as in Korea and the Kuwait-Iraq conflict), the United Nations must now involve itself in a new modality of conflict management. Its objective would be to put an end to random violence resulting from civil and inter-ethnic conflicts, to engineer political solutions to seemingly intractable conflicts, to create conditions where humanitarian relief work could proceed and to nudge conflict parties toward conciliation. All powers must realize that making peace is a lot cheaper than conducting war.

To that end, Article 43 of the United Nations Charter must be activated enabling the Security Council to call on stand-by international military or police forces and to deploy them quickly in order to break cycles of violence and the destruction of human societies through firm intervention. Troops earmarked for that purpose have to undergo specialized training and that different equipment would have to be designed for their use.

The United Nations must further be given the authority to monitor and publish data on world arms trade and to press for global norms, regulations and limits for both arms suppliers and purchasers. Talks among the five permanent members of the Security Council - the leading arms exporting countries - on restraints in arms sales have remained elusive. All efforts must be deployed to agree on an international moratorium on or criteria for arms sales.

Most, if not all of the conventions and treaties developed and ratified on subjects of military security, including the NPT, are outside the United Nations. Thus, the UN cannot deal with violations nor can it authoritatively intervene against a country which has not acceded to a particular treaty. If unchecked, the world's ever more complex non-system of treaties and conventions and the number of associated instruments and related bodies may simply become unmanageable. Thus, if at all possible, all international legal instruments should gradually be placed under the umbrella of the United Nations.

The creation of a system of collective economic security and development would be in consonance with the United Nations Charter which envisaged both a strategic-military and a socio-economic security track. The socio-economic security track, however, has performed inadequately over the past 45 years.

Unlike in the political and military area, no country or group of countries has sufficient power and resources to bring about and implement decisions in the economic and social field. While collective security measures are geographically limited and often also in terms of time, for economic and social issues such clearcut delineation does not exist, as these problems are constantly in a flux. This fact is reflected in the polycentric nature of the United Nations system where a plethora of independent organizations pursues largely uncoordinated economic and social policies and programmes. As economic and social problems are frequently a precursor to military conflicts, an effective arrangement governing economic and social aspects might in the long run very well be an effective deterrent to hostilities.

The very character of the new generation of global problems demands a substantial restructuring of the UN system, some of which may entail the transfer of sovereign rights to the world body. A number of remedies have been suggested to fill the present institutional lacunae. They range from the periodic convening of special sessions of the Security Council devoted to the new threats to peace and security, the creation of an Earth - or economic security - Council (along the lines of the Security Council but without the right of veto), to a revised mandate for the Trusteeship Council, converting it from a trustee of decolonization to a trustee of the planet's environment and commons.

A simpler solution might be to reform the nature and mandate of the Economic and Social Council (ECOSOC). In economic policy-making ECOSOC seemed to have been bypassed by the major powers in favour of the Bretton Woods institutions. An opportunity for change may be at hand now. ECOSOC must judiciously concentrate on issues that are at the same time vital, global and urgent and which lend themselves to monitoring and multilateral enforcement. The ECOSOC membership might also have to be trimmed to turn it into a more manageable and effective body than is feasible with its current 54 members. Its working methods will have to be adapted to the international realities, inter alia, by holding meetings whenever required, ministerial representation (similar to arrangements within OECD, the G-7 or the Bretton Woods institutions) and drawing in a systematic manner on the expertise of international non-governmental organizations, transnational corporations, trade unions, private banks and parliamentarians.

Should the complexities of a Charter revision process make it improbable that an adaptation of ECOSOC along these lines can be put in place, collective security in the economic and social field may have to be organized outside the United Nations framework. This may be the prize for attaining international peace in the long run.

Special attention must be paid to the restructuring of the decision-making and management of United Nations development assistance programmes. These activities have been fractured and scattered among various organizations such as UNDP, UNICEF, UNFPA and among a myriad of specialized agencies. There must be a unified direction to the development strategies that these N organs should follow and how they should be implemented at the level of developing countries. Those reforms will not necessitate a Charter revision and they should therefore be implemented without delay.

In general, the multitude of UN affiliated organizations which has grown unwieldy over a period of 45 years and which compete with each other must be pruned. Mergers of organizations may be one approach, another could be the adoption of cooperative mechanisms overarching the UN system (as was the case with the successful global reproductive research programme bringing together WHO, World Bank, UNFPA, UNDP and donor and recipient governments).

In the environment area, an international court of the environment could be established either within the present International Court of Justice or patterned along it to adjudicate environmental conflicts under the proposed conventions.

The Security Council reflects a bygone order with the pre-eminence of the five permanent members. It must be restructured so as to acquire the legitimacy, authority and political and financial support necessary for the discharge of its full responsibilities in the new global order. If there is a real desire to make the United Nations the centerpiece of a new order, legalistic arguments about the intricacies and difficulties of a Charter revision process cannot be allowed to prevail. Such efforts must be linked with measures efforts to bring about a more realistic financial burdensharing.

VII. LEADERSHIP IN A GLOBAL ORDER

History is witness that no new global order will emerge without leadership. The disappearance of the cold war has deprived the population of many nations of their major organizing principle. There is an enormous opportunity to provide leadership especially in the area of limiting nuclear proliferation, promoting and nurturing new democracies and responding to the new global threats. The first duties of leaders is to lead and not to follow popular sentiments alone. The population at large seems to be aware of the impending dangers. Many political leaders, however, appear to be incapable of dealing with them.

Political leadership must recognize that short-term national interests can no longer be segregated from the new global challenges which all humanity shares. For too long, political opportunism has substituted political meanderings for final destinations. The world's leaders must now acquire new roadmaps. It is no longer sufficient to manage change alone, it is imperative to change human behavior.

Altruism and morality alone will not work. Neither should we be so naive as to expect them to. What we need is enlightened self-interest. The countries which are being called upon to provide greater resources will only do so once they fully appreciate that their interests, livelihoods and electorates are affected. Latin America is nuclear-free today because of deliberate decisions by its leaders and not so much because of treaties and effective inspection techniques.

There are obvious bureaucratic problems - not least the compartmentalisation within governments of domestic and foreign policy; the tyranny of tomorrow rather than the challenges of the next decade or the next century; and the unfashionability of "planning" and all it brings with it.

But bureaucracies will ultimately follow where leaders lead and expose the real issues to the public. For it cannot be re-iterated too often that the key challenge for governments is to strike a balance between national interest and global security. That balance cannot be set in concrete and will vary from issue to issue. But the central danger of the accelerating proliferation of almost everything that has a destructive power or can be used for destructive purposes can no longer be ignored.

A leader's most noble duty is to safeguard the security and to provide a vision for the future of his or her people: it is time that leaders began to realize that ultimately no facet of national security can be protected any longer without the assurance of global security in the widest sense. This requires an attitudinal change of the first order.

PARTICIPANTS

I. MEMBERS OF THE INTERACTION COUNCIL

Helmut SCHMIDT, Chancellor of the Federal Republic of Germany, 1974-82; Chairman

Andries van AGT, Prime Minister of Netherlands, 1976-79

Lord CALLAGHAN OF CARDIFF, Prime Minister of the United Kingdom, 1976-79

Miguel DE LA MADRID HURTADO, President of Mexico, 1982-88

Daniel M. LISULO, Prime Minister of Zambia, 1978-81

Olusegun OBASANJO, Head of the Federal Military Government of Nigeria, 1976-79

Maria de Lourdes PINTASILGO, Prime Minister of Portugal, 1979-80

Pierre Elliot TRUDEAU, Prime Minister of Canada, 1969-1979 and 1980-1984

Sune BERGSTROM (Sweden), Professor, Karolinska Institute; Nobel Laureate

Takako DOI (Japan), Professor; Member of Diet; former Chairperson, Japanese Socialist Party

Bronislaw GEREMEK (Poland), Professor; Member of Sejm

Francois HEISBOURG (France), Director, Institute for International Strategic Studies, London

HUANG Hua (China), former Foreign Minister

Henry A. KISSINGER (United States of America), former Secretary of State

William P. LAUGHLIN (United States of America), Citizen Entrepreneur

Emile van LENNEP (Netherlands), former OECD Secretary General

Vladimir LUKIN (Russia), Chairman, Foreign Affairs Committee, Russian Parliament

Jim MACNEILL (Canada), Professor; former Secretary General, Brundtland Commission

Taro NAKAYAMA (Japan), Member of Diet; former Foreign Minister

I.G. PATEL (India), Professor; former Director, London School of Economics; former Central Bank Governor and former UNDP Deputy Administrator

Annemarie RENGER (Germany), former President, Deutscher Bundestag

Nafis SADIK (Pakistan), Executive Director, United Nations Population Fund (UNFPA)

Helga STEEG (Germany), Executive Director, International Energy Agency

Sheikh Ahmed Zaki YAMANI (Saudi Arabia), former Minister of Petroleum

III. INVITED JOURNALISTS

Robert LEICHT (Germany), Die Zeit

Flora LEWIS (United States of America), The New York Times

David MARSH (United Kingdom), Financial Times

Nagaharu NAYABUSA (Japan), Asahi Shimbun

Elizabeth POND (USA), John D. and Catherine T. MacArthur Fellow

Walter STUETZLE (Germany), Der Tagesspiegel

Dragoljub NAJMAN

Hans D'ORVILLE

Jens FISCHER

Keiko ATSUMI

Caroline ANSTEY

Petra ROSENBAUM

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The InterAction Council gratefully acknowledges generous contributions by Mr. William P. Laughlin and the Ford Foundation in support of this High-level Meeting.