The Current Situation of the World
1. As we look at the political and economic world today,
it is becoming increasingly clear that globalization and the whirlwind of change that are
accompanying it, is fast becoming the dominant forces framing political debate within and
across whole continents. It is equally clear, however, that governmental responses to date
are neither adequate nor coherent.
2. In its annual review of world issues that influence the well-being of humankind, the
InterAction Council noted with considerable concern, for example, the continuing presence
of circumstances that the Council has addressed for more than a decade: the still
diminishing quality of the natural environment; the broad incidence of poverty in so many
of the developing countries; the disturbing phenomenon of population growth in the
developing countries, coincident with increasing material consumption in the
industrialized countries; the proliferation of weaponry, including weapons of mass
destruction; the uneven impact of economic change; the inadequate protection of human
dignity, most particularly with respect to the participation of women and minorities.
Singly, and in combination, these circumstances threaten the stability of societies
worldwide.
The sustained and concerted attention of the entire international community is necessary
if widespread turbulence is to be avoided. In particular, the Council recommends the
reduction of military expenditures in all countries, as well as the limitation of arms
exports to those countries that are non-democratic or that condone with the violation of
internationally recognized human rights.
3. As this century draws to a close, the tenacity and ferocity of civil strife and ethnic
conflict in three continents is evidence that the human species has not yet eliminated
savage behavior. In regions of Africa, Asia and Europe, treasured concepts of civil
behavior have been abandoned. Violence, destruction, and human suffering in these
instances are so excessive and so offensive as to prompt disgust and recoil on the part of
outsiders. A withdrawal of international concern and assistance is increasingly evident, a
trend that dismays the Council.
4. Nowhere is the changing nature of states and international behavior more evident than
in those countries and regions that are not yet fully engaged or adequately represented in
many of the major councils of the world. The vitality and complexity of such major states
as Brazil, China, India and Russia demand much more than mere curiosity or critical
detachment on the part of the industrialized countries. The Council strongly recommends
that the G-7 without delay organize at the Heads of State level systematic consultations
with the leaders of China and Russia. Not to do so will risk dangerous discontinuity and
tragic disjunctures.
5. Poverty remains acute today. Over a billion people struggle to live on less than $1 a
day. Two hundred million children die each year from poverty-related causes. Despite
burgeoning private capital flows to developing countries over the last five years,
reaching over $167 billion in 1995, 80 percent of private capital is going to just 12
countries. Private capital is not flowing into Sub-Saharan Africa where a child today is
still more likely to go hungry than to go to school. Moreover, Official Development
Assistance (ODA) has fallen to its lowest figure in real terms in 23 years. The council
calls for the reversal of this downward trend and in order to maximize the effectiveness
of aid, urges that ODA be focused on the poorest countries which cannot attract private
capital and be made conditional on policies related to family planning and military
spending.
6. A salient feature of the human race at this moment is the commonality of human
interests and human needs. Only common responses will be successful in restoring human
confidence and offering opportunity for widespread human accomplishment. Those societies
that will flourish in decades to come will be those whose governments exhibit the insight
and the dedication demanded by these new realities. In these respects an issue of deepest
concern to the Council is the inability to date of governments, international
institutions, and private sector actors to design their economic policies and activities
to overcome the current high levels of unemployment, social disparity and political
instability so evident in countries both industrialized and developing. A most disturbing
consequences of the present trends toward globalization and privatization are the
increasing disparities in income and economic well-being among countries and within
countries. These must be contained.
7. Globalization of the world economy is matched by globalization of many of the world’s problems already referred to. But globalization applies equally
to a sphere that normally does not command the attention it deserves ? the necessity for
global ethical standards.
8. Because global interdependence demands that we must live with each other in harmony,
human beings need rules and constraints. Ethics are the minimum standards that make a
collective life possible. Without ethics and the self-restraint that are their result,
humankind world revert to the jungle. The world is in need of an ethical base on which to
stand. The Council is therefore grateful to the Parliament to the World’s Religions which proclaimed in 1993 a declaration encouraging a “global ethic.” This
declaration the Council supports in principle.
9. Recognizing this need, the InterAction Council requested a report (attached) by a
high-level experts group on the subject of global ethical standards. The InterAction
Council welcomed the report of this Group, one that consisted of religious leaders from
several faiths and experts drawn from across the globe. The Council accepted the findings
of this Group that the world’s faiths have much
in common. The Council commends to the international community for reflection and
appropriate action the various concrete measures suggested by this report. It invites the
world media to reflect more fully in all publications these common values.
(Go to the High-level Experts Group Meeting Report on "In Search of
Global Ethical Standards" chaired by Helmut Schmidt.)
Education at all levels has a crucial role to play inculcating global ethical values in
the minds of the younger generation. Curricula should include common global values and
encourage an understanding of all major religions in a fashion that promotes “affirmative tolerance” towards
other faiths. It is essential in these respects that the religions of the world cooperate
closely with each other. Within the United Nations, there should be established a World
Interfaith Academy that would bring together leaders, scholars and students from the world’s religions. The recent decision of the United Nations University
to create the World Leaders Academy is commended.
10. The Council was firm in its view that ethics must precede politics and even law
because political action is concerned with values and choices. Composed of former leaders
well versed in the reality of power, the InterAction Council calls on world’s institutions to re-dedicate themselves to the primacy of
normative ethical standards.
To Create a Stable
Financial System |
11. Many important developments have taken place in the
foreign exchange and international capital markets over the last decade, imposing new
constraints on the international economic system and providing new opportunities and
challenges: a dramatic increase and the changing composition of capital inflows into
developing areas; an explosion in the use of derivatives; and a continued increase in
foreign exchange turnover. These developments have increased the risk of financial
instability. Stability can be increased in three areas: developing countries, the
financial system and the exchange rate system. (See the attached report of the Council’s Group of Experts.)
12. The integration of capital markets allows a better allocations of resources and has
disciplinary effects. Yet, a major difficulty is to ensure that developing countries are
not destabilizied by capital inflows and capital flow reversals. Capital flows should be
met by accountable and sustainable monetary and fiscal policies, which target price
stability and balanced growth, as well as by timely dissemination of information. In this
regard, the IMF’s “early warning system” should
be supported.
13. Innovations in financial markets and expanded transactions increase the risk of
financial instability. Yet the development of new financial instruments allows investors
more adequately to identify, measure, segment, price and manage market risk, and hence
could counter such risks. The risk related financial market innovation could be alleviated
by addressing inadequate monitoring system, incomplete assessment of risk, compensation
systems biased toward excessive risk-taking, and insufficient coordination among
regulators.
14. Foreign exchange market developments continue to be among the most difficult to
anticipate and potentially the most disruptive. The need for change is broadly recognized.
Expectations directly influence exchange rates and should be based on appropriate and
sustainable economic policies, both domestic and international. Nevertheless, stable
policies would not be themselves guarantee exchange rate stability. For this reason the
Council recognizes the important contribution of the European Union’s decision to introduce on January 1st 1999 a single
European currency which will contribute a considerable measure of international monetary
stability. This decision will permit the introduction of a “reference range” linking
the U.S. dollar, the Japanese yen and the new European currency unit. This will, of
course, require a high degree of political will and commitment which the Council strongly
encourages.
PARTICIPANTS IN THE 14TH
SESSION |
Members
Andries A.M. van Agt, Prime Minister of the
Netherlands, 1976 - 1979
Oscar Arias Sanchez, President of Costa Rica,
1986 - 1990
Miguel de la Madrid Hurtado, President of Mexico,
1982 - 1988
Malcolm Fraser, Prime Minister of Australia, 1975
- 1983
Kurt Furgler, President of the Swiss
Confederation, 1977, 1981, 1985
Valéry Giscard d'Estaing, President of France,
1974 - 1981
Kenneth Kaunda, President of Zambia, 1964 - 1991
Kiichi Miyazawa, Prime Minister of Japan, 1991 -
1993
Abdel Salem Al-Majali, Prime Minister of Jordan,
1993 - 1995
Jose Sarney, President of Brazil, 1985 - 1990
Helmut Schmidt, Chancellor of the Federal
Republic of Germany, 1974 - 1982
Kalevi Sorsa, Prime Minister of Finland, 1972 -
75, 1977 - 79, 1982 - 87
Pierre Elliott Trudeau, Prime Minister of Canada,
1968 - 1979, 1980 - 1984
Ola Ullsten, Prime Minister of Sweden, 1978 -
1979
Special Guests
Thomas S.Axworthy, Executive Director, CRB
Foundation
Kenneth Courtis, Vice President, Deutshebank
Ivan L. Head, Professor, University of British
Columbia
Kim Kyong-Dong, Professor, Seoul University
Emile van Lennep, Former Secretary-General, OECD
and Minister of State of the Netherlands
Michael E. J. Phelps, Chairman and C.E.O.,
Westcoast Energy Inc.
Andrew Sarlos, Canadian Financial Executive
Maurice Strong, Senior Advisor to the President
of the World Bank
Wu Xuequian, Vice Premier and Foreign Minister of
the People's Republic of China 1982-88, 1988-93
Alexander Yakovlev, Former Advisor to the
President of the Soviet Union
Invited Journalists
David Crane, Economics Editor, "The Toronto
Star", Canada
Alain Dubuc, Editor, "La Presse",
Canada
Flora Lewis, International Herald Tribune
Nagaharu Hayabusa, The Asahi Shimbun
Secretariat
Jack Austin, Organizing Chairman and Senator of
Canada
Isamu Miyazaki, Former State Minister, Economic
Planning Agency of Japan
Tsuneo Fukuda, Treasurer |
