Event Replay
Today, 1.2 billion people still don’t have access to electricity and close to 600 million people don’t have access to safe drinking water. Worse, in developing countries, 4 billion people – which is 60% of the global population, don’t have internet access – their voices are not being heard.
These are some of the global challenges we are facing today, as we found out during the Great Expectations: The Test of Multilateralism event. The event brought together several thought leaders including Shoalin Yang, World Bank Managing Director and Chief Administrative Officer, Joachim von Amsberg, Vice President Asian Infrastructure Investment Bank, Raymond Offenheiser, Oxfam America President, L-H Roller, Chief Economic Advisor to the Chancellor, Federal Chancellery of Germany, and Afsaneh M. Beschloss, Founder and CEO, Rock Creek Group. The event was moderated by Clare Short, Former Secretary of State for International Development, UK.
Disruptive technology and inequality
The speakers noted that as the world becomes more globalized, disruptive technology will continue to drive inequality as it’s often assumed that this disruption will produce new jobs and create more entrepreneurs. At the heart of this discussion was whether productivity gains have decreased and if the digital revolution will bring growth. And if it does, we need to make sure that the global community ensures that opportunities are shared by most people
Multilateralism and trust
As other players join the multilateralism field, a key issue that needs to be addressed is trust in e-institutions. To stay relevant, effective multilateral institutions will be those who can gain the trust of the people, not just governments’ but ordinary people’s trust and at the same time be able to have the answers to 21st century problems. World Bank’s Shaolin Yang added that the Bank focuses on investing in the future through education and health and providing a safety net that helps protect the poor and keeps them from slipping back into poverty.
Globalization vs. multilateralism
When it comes to global development, we need to tackle the difference between globalization and multilateralism. Asian Infrastructure Investment Bank’s Joachim von Amsberg, observed that globalization increased global gains but there were side effects especially environmental related ones which will require public policy intervention. He stressed that multilateralism centers at dealing with the consequences of globalization, such as climate change. It also focuses on mechanisms to compensate losers as a result of globalization. Additionally, without multilateral institutions, the world may have seen more conflict and less focus on reducing poverty.
But to be useful, multilateral institutions need to become multi-directional and include countries that have not originally been part of the setting up of the multilateral system. The 2015 Paris Agreement, around climate change was hailed as a good example of multilateral institutions coming together to rally behind a global issue.
Challenges ahead
Today is very different from when the World Bank was created – with new challenges and global public goods increasingly becoming the focus. Currently, multilateral institutions collectively have more than $160 billion to allocate but the need for countries is in the trillions. The biggest bottleneck for development is infrastructure investment. Each year, the infrastructure gap is $1.5 trillion. Multilateral institutions meet about 5-10% of this need. To offset the balance, we need to look to the private sector. The largest amount of assets is in the private sector so tap into this, we must engage millennials in both developing and developed countries in order to trigger impact investment.
Also, there is a clear need to address globalization but support from the people is important. In the civil society sector, there is radicalization happening and new ways to solve problems. We need to make this process more main stream.
Next steps:
The speakers agreed that we must continue to educate people on the role of multilaterals. At the same time, we need to ensure that our institutions are accountable, transparent and effective. Creating a positive multilateral environment can help us achieve this and also help build trust. Rock Creek Group’s Afsaneh Beschloss concluded that climate change needs to become a topic that all multilateral institutions rally behind. But also, we need to be result oriented and be able to measure what we do.
As we think about the benefits of multilateralism to the people, multilaterals needs to work together as opposed to competing against each other and work with the private sector.
As the pace of global development changes – we need to have leaders within multilateral institutions that constantly ask themselves: are we fit to tackle 21st century challenges, e.g globalization.
Lastly, we can all learn from smaller institutions and maybe shape the existing parts within our own institutions that are not working. And as Shaolin Yang said, “multilaterism really works: we owe it to the next generation to strengthen our commitment to it.”
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