This is an onsite, slightly edited republication of the complete G|O Briefing newsletter
Today in The Geneva Observer, an achievement is an achievement, and it should not be obscured by the convoluted title of the communiqué announcing it. Greeted by a standing ovation, yesterday’s (December 1) decision by the World Health Assembly Special Session (WHASS) “to launch a process to develop [a] historic global accord on pandemic prevention, preparedness, and response” is to be saluted, while the COVID-19 pandemic is still gripping the world and, for some, multilateralism is all but moribund. But if the first hurdle has been passed, the real test still lies ahead, for the beauty of multilateralism lies more and more in the eye of the beholder, and, as Jamil Chade reports, this could be one of its biggest challenges.
THE ILO'S GUY RYDER TO THE FINANCIAL SECTOR: " ARE YOU LEADERS OR ARE YOU FOLLOWERS?"
“Are you followers or are you leaders in bringing private finance to bear in achieving the SDGs?” the DG of the International Labour Organization (ILO) asked the audience gathered at la Maison de la Paix for the opening of Building Bridges on Monday (November 29). The moment didn’t go unnoticed. But by speaking (social) truth to (financial) power, Ryder actually helped to highlight the very value of the event for International Geneva and green finance in general.
HOW INTERNATIONAL ORGANIZATIONS DIE
Multilateral institutions may die—a deplorable prospect, argues former Spanish Foreign Minister Ana Palacio, in another piece in today’s G|O Briefing. Her main point is a simple and, we think, compelling one: "While the COVID-19 pandemic has highlighted international institutions’ shortcomings, it has also made plain, yet again, that the biggest challenges today are global in nature. In this context, defending multilateral institutions is not a display of 'nostalgia,' but an act of realism."
More below. As always, it’s just a scroll away.
Will the pandemic treaty help to save the multilateral system?
By Jamil Chade
“At its heart, the pandemic is a crisis of solidarity and sharing. The lack of sharing of information and data by many countries in the early days of the pandemic hindered our collective ability to get a clear picture of its profile and trajectory. The lack of sharing of biological samples hindered our collective ability to understand how the virus was evolving.
“The lack of sharing of PPE, tests, vaccines, technology, know-how, intellectual property, and other tools hindered our collective ability to prevent infections and save lives. And the lack of a consistent and coherent global approach has resulted in a splintered and disjointed response, breeding misunderstanding, misinformation, and mistrust.”
Echoing his op-ed in The G|O, this was the diagnosis with which the Director-General of the World Health Organization (WHO), Tedros Ghebreyesus, opened the special session of the World Health Assembly (WHASS) this week. In short, the multilateral system failed us just when it was needed most.
The response to the COVID-19 pandemic naturally gave this gathering unprecedented weight and scope. Its aim was to agree on a pathway to negotiating a pandemic treaty—a set of principles, rules, measures, and mechanisms to prevent a repetition of the tragic chaos that prevailed at the outset of COVID-19—as well as to address the central issue of accessibility and equity in vaccine distribution. The proposed treaty is an instrument that should, for many, be the inaugural agreement of a post-covid era.
To widespread praise, a consensus was indeed reached on the creation of an international negotiating body (INB) tasked with delivering a plan to “strengthen pandemic prevention, preparedness, and response.”
AN HISTORIC MOMENT
“I think it's a historic moment,” reacted Thiru Balasubramaniam, Geneva representative of Knowledge Economy International (KEI), in a briefing before the UN press in Geneva.
But here, diplomats and WHO officials are under no illusion that the path to a pact will be long and arduous. “There is still a long road ahead,” said Tedros, in his closing remarks. “There are still differences of opinion about what a new accord could or should contain.” For the reality is that today different governments have different (and sometimes divergent) ideas about the multilateral system and what role its institutions should play over the coming decades.
The idea of a treaty (in other words, a legally binding instrument) is at this point unacceptable for some of the major powers. Russia has warned that it will not support any agreement that goes beyond the existing remit of the International Health Regulations—a catalogue of measures that member states must abide by, but that many consider to be weak and without teeth, as violators suffer no sanctions. And for China, any attempt to create international inspection missions to monitor outbreaks—along the lines of UN nuclear inspectors—will represent a thick red line.
The US favors stronger International Health Regulations, and has misgivings about a treaty. WHO watchers, however, admit that the US played a decisive role during the discussions, and that this created a new dynamic, motivating many member states and leading to the creation of the INB.
For KEI’s director James Love, often critical of the US position, “Colin McIff, the American co-chair of the working group, paid a very constructive role in moving [this] forward. There was some concern earlier that the US would be holding back on the idea of a full treaty. I think that as the report was put together over the last six months, many countries felt more comfortable with the fact that issues of equity [and] transparency would be front and center. That broadened the support from the initial sponsors and ended up creating a much more inclusive group,” he told The G|O, during a virtual meeting with the Association of the UN correspondents (ACANU).
“I think it shows how important it is for countries to talk to each other because it's been a very intense interaction amongst the many member states under the leadership of Colin McIff and the Ambassador from Indonesia. But it is key, these days, that countries talk to each other to sort these problems out,” added medical expert and activist Ellen ‘t Hoen during the same meeting.
Optimistic voices claim that health can overcome many of the geopolitical stalemates and worries, and therefore a strong treaty may arise as a hope for a new pattern of cooperation amongst countries. An oft-cited example is the agreement reached between the Soviets and the Americans at the height of the Cold War to defeat a common enemy: smallpox.
That vaccine had first been developed in 1796, but it took another 184 years and millions of deaths for smallpox to be eradicated. Today, meanwhile, it remains unclear how the new legal instrument might succeed in solving the central issue of the current crisis: access to vaccines and treatments. The process, which must be completed by 2024, will deal with issues such equity and transparency—all in very short supply in response to COVID-19 in 2020 and 2021.
OMICRON AS AN EARLY WARNING
If governments and global health activists alike were encouraged by the creation of the INB and by the breadth of its mandate, the sudden irruption of the omicron variant served as an early warning on the ability or willingness of the international community to learn the lessons of the recent past, as well as revealing the deep mistrust prevalent in Geneva.
While welcoming the creation of the international body, African countries such as Ghana, Botswana, and South Africa also immediately denounced what they consider their unfair ostracization, a situation they found galling and difficult to understand given that they were exemplary in sharing all the information available on the new variant of concern. The transparency was applauded by the US and the EU. “I am personally grateful to the leadership of President Cyril Ramaphosa,” said Ursula von der Leyen, head of the European Commission. “South Africa’s analytic work and transparency in sharing its results was indispensable in allowing a swift global response.”
Xavier Becerra, the US Secretary of the Department of Health, had similar remarks. “We express our gratitude and support to the government of South Africa for moving so swiftly and transparently in alerting the world [to] this latest development,” he said. The kudos, however, was of no consolation to the South African government. Speeches may have been full of praise, but on the ground, at the very same moment, the reality was markedly different: 42 countries were closing their borders and air connection with the continent. “We appreciate the message of support,” declared South African Health Minister Joe Phaahla, bitterly, “but the actions of your government do not say that to our people. The travel bans are just making things more difficult, and [are] in contradiction to what you are saying.”
This contradiction was immediately exploited by China and India, as both countries rushed to announce they were donating additional doses of vaccines to the African continent, where the situation is bleak, with less than 10% of countries having met their vaccination targets.
It is under this shadow, and with the multilateral system under stress, that the negotiations for the treaty will start. The lack of vaccine in South Africa (and across most of the Global South), coupled with the omicron surge, may lead to increased pressure on the contentious issue of IP rights, the subject of heated debate both at the WHO and at the WTO.
As the North is hoarding vaccines and even starting to offer booster shots to segments of the population who might not be at a high risk of being contaminated, the anger is now palpable among global health actors and activists, who have pushed for a speedy transfer of technology and a temporary waiver on COVID-19 vaccines and equipment.
“The recent emergence of another new, more transmissible variant is a telling example of how this virus continues to mutate, particularly in the absence of equitable access to the right COVID-19 medical tools to deal with it,” said Candice Sehoma, South Africa Advocacy Officer for the MSF Access Campaign. “With millions of lives at stake, the world can’t afford to waste any more time.” (See boxed text below about the waiver question.)
In his speech, Tedros also issued a warning: “The fabric of multilateralism has been frayed. The big question that remains is whether this multilateralism will be rescued through a new treaty, or whether it will expose its vulnerability.”
ELSEWHERE IN THE ECOSYSTEM
BUILDING BRIDGES, TAKE TWO: THE ILO'S GUY RYDER'S POINTED QUESTIONS
Once the first opening speeches at the Building Bridges Summit had been given—after Swiss banker Patrick Odier (the summit’s initiator) had shared his deeply held conviction that it was time for finance to transform itself and abandon a system that has damaged the planet to one that will help save it; after Swiss finance minister Ueli Maurer had dropped the stunning fact that 27% of the world’s private wealth is managed in Switzerland; after UN Deputy Secretary-General Amina Mohammed had told how COVID-19 has dramatically reversed progress towards the UN Sustainable Developments Goals (SDGs)—Guy Ryder went to the heart of the matter. Sitting on the first panel of the day, in the largest auditorium of Geneva’s Maison de la Paix, the International Labour Organization’s DG skipped the niceties: “Here is my big question to the finance sector: Are you leaders or are you followers in bringing private finance to bear in achieving the SDGs? […] Have you recanted the Milton Friedman of fifty years ago; just making money? Have you had your epiphany, have you had your animal spirits tamed in that regard?” he asked.
A few minutes earlier, having commended the vision of the event’s creators—saying, “this is perhaps the most crucial conversation we can have in Geneva”—he had offered his unvarnished appraisal of the SDGs’ status: “From the very beginning, the UN 2030 Agenda factored in the finance dimension. It understood that we needed to mobilize the finance [sector] to meet the ambitions of the 17 SDGs. And so, ten years out from the deadline, how are we doing?” Ryder asked. “Not so great,” he said, in answer to his own question, adding, “Don’t put it down to bumps in the road or unforeseen circumstances, we simply haven’t got it right.”
But in reality, with his “provocative” statement, as the panel’s moderator qualified it, Ryder helped give full meaning and value to the Summit, and the week-long work that concluded today (December 2). We have now arrived at a moment when there is a growing consensus on what “getting it right” entails, and that is moving from shareholders to stakeholders capitalism. The greening of the financial sector as a response to the climate crisis is urgent, but the absence of a clear, agreed framework for reporting the climate impact of corporate activity is a major impediment to that shift. “We are now at a historic crossroads,” Sir Ronald Cohen, Chairman of the Global Steering Group for impact investment, told the audience by video. “In the thirties (following the Great Depression of 1929), we introduced the ‘generally accepted accounting principles’ (GAAP), to bring transparency to profit. So, every company uses the same accounting principles, and the numbers are audited. Now, the time has come for us to introduce transparency to impact.”
The climate crisis is our ultimate and most pressing challenge. One of the virtues of the Building Bridges Summit and its associated events, however, was to remind us of the importance of the holistic nature of the SDGs. To quote Guy Ryder again, “the SDGs cover social goals of many dimensions. If we miss them out, we’ll miss a large part of the point.”
HOW INTERNATIONAL INSTITUTIONS DIE
By Ana Palacio*
In the aftermath of World War II, the victors established a set of institutions that have underpinned the world order ever since. While those institutions have often been contested, they have proved to be highly resilient. But this does not mean they are invulnerable. On the contrary, their effectiveness may be gradually eroded – especially when they are used as geopolitical pawns.
Academic research offers abundant analysis of the factors that boost institutional hardiness, and those that tend to hasten institutional failure. One key message – which my own experience at the World Bank and in the European Union confirms – is that institutions thrive when there is trust. Small wonder, then, that the international order’s institutional arrangements are at risk.
Former US President Donald Trump’s administration threw the institutional-trust deficit into sharp relief. In just four years, Trump either defunded or disengaged from several United Nations agencies and multilateral agreements, paralyzed the World Trade Organization, and withdrew the United States from the World Health Organization.
The multilateral system passed the stress tests of Trump’s attacks – but just barely. Moreover, Trump’s departure from the White House did not bring the reprieve, let alone revival, for which some hoped. Instead, according to the 2021 Edelman Trust Barometer, global trust in institutions has continued to decline.
The COVID-19 pandemic is largely to blame. Despite some successes, multilateral institutions failed to bring about the collaboration needed to address the crisis effectively. The highly uneven distribution of vaccine doses is a case in point.
Some have already written off the post-WWII institutions, arguing that they have outlived their usefulness. For these critics, talk of reforming bodies like the UN Security Council or the International Monetary Fund merely distracts from the more important task of “figuring out what a new order should look like.” Should it, for example, rely more on ad hocformations, like those that have proliferated in recent years?
The answer to that question is plainly no. After all, those formations have so far failed to produce anything close to the kinds of multilateral cooperation the world needs.
To be sure, traditional governance frameworks have indeed fallen short. For example, as Mark Leonard of the European Council on Foreign Relations recently observed, UN Climate Change Conferences have “failed to produce a model of global governance that can tame power politics, let alone forge a sense of shared destiny among countries.” The just-concluded COP26 in Glasgow lent further support to this conclusion.
But while post-WWII international institutions are far from perfect, their collective record suggests that they remain the world’s best hope for coping with the complex challenges ahead. As Harvard University’s Joseph S. Nye recently pointed out, established institutions entrench “valuable patterns of behavior,” as they underpin a “regime of rules, norms, networks, and expectations that create social roles, which entail moral obligations.”
Of course, the mere existence of institutions is not enough to deliver solutions to the world’s problems. As Nye put it, they must be used in ways that “bind others to support global public goods” that advance shared long-term interests.
That is not what the EU did last week, when the debate over the taxonomy of green investment devolved into an acerbic exchange between the bloc’s renewable heavyweights and those who view gas and nuclear as integral to any green transition. This debate will surely dent the EU’s painstakingly built reputation as a global standard-bearer on sustainability.
If such division exists within the EU, it is difficult to imagine how consensus can be reached within global organizations, especially at a time of intensifying great-power competition. In fact, nowadays, international institutions are becoming a theater – and often collateral damage – of geopolitical confrontation.
In recent years, China has taken steps to expand its influence within multilateral institutions. It now heads four of the 15 UN agencies – a gain that has helped to protect it from international scrutiny.
China is also at the center of the recent data-rigging scandal at the World Bank. An independent investigation carried out by the US law firm WilmerHale found irregularities in the data used to determine China’s ranking in the 2018 and 2020 editions of the Doing Business index.
IMF Managing Director Kristalina Georgieva, who was serving as the World Bank’s Chief Executive Officer in 2018, was accused of playing a central role in the effort to boost China’s ranking. Within weeks, Doing Business was discontinued, and Georgieva’s IMF job was on the line.
Nonetheless, the Doing Business scandal could do lasting damage to an already beleaguered international system. Beyond eroding trust in the World Bank and the IMF, the debacle has highlighted how bilateral tensions can shape – and distort – the activities of multilateral institutions.
While the COVID-19 pandemic has highlighted international institutions’ shortcomings, it has also made plain, yet again, that the biggest challenges today are global in nature. In this context, defending multilateral institutions is hardly a display of “nostalgia.” Rather, it is an act of realism. Few would benefit from the unraveling of the existing order. The question is whether public trust can be restored before it is too late.
*Ana Palacio, a former minister of foreign affairs of Spain and former senior vice president and general counsel of the World Bank Group, is a visiting lecturer at Georgetown University.