The Berlin International Economics Congress

An Interdisciplinary Analysis of the Roles of Global Politics & Civil Society in International Economics

(Berlin; February 4th - 7th, 2010)

Congress Report

The Institute for Cultural Diplomacy hosted the Berlin International Economics Congress (BIEC) from 4th to 7th February 2010. The program brought together a group of speakers consisting of 36 leading figures from international politics, academia, and civil society, and more than 100 participants, to discuss salient issues surrounding the role of global politics and civil society in international economics.

Discussion ranged from the causes of the global economic crisis to international cooperation on climate change and the future of the world economic order. In addition to individual speeches, the BIEC included debates and moderated panel discussions, as well as social and cultural activities that provided an informal opportunity for further discussions and networking. 

Summary of Events

Thursday, 4th February:

The congress began with a series of lectures focused on climate change and sustainable energy policies. As the day progressed, the focus turned to the German economy in the wake of the economic crisis and the role of economics in fostering stability throughout Europe. The educational section of the day was drawn to a close with a panel discussion on the roles of cultural diplomacy and soft power in strengthening multilateral cooperation on the global economy. The first day concluded with a group dinner in a Mediterranean restaurant located on West Berlin’s fashionable Savignyplatz.

Friday, 5th February:

The financial crisis and solutions for recovery were the focus of the second day, during which the potential for global governance was widely discussed, tied in with regional perspectives from Estonia, Germany, and Denmark. The evening’s panel discussion began with a debate on the role of global governance organizations in monitoring and regulating the global economy, which was then discussed in further detail during an interactive panel discussion. Following the academic components, live music, food, and drink kept the group socializing and celebrating at the ICD House long into the evening.

Saturday, 6th February:

The penultimate day of the program saw the issue of climate change take centre stage once again during the morning. Throughout the afternoon the focal point moved to reflection and analysis on the causes and consequences of the financial crisis, with the evening’s panel discussion asking speakers to consider the lessons learned from the crisis and the challenges that lie ahead. The speakers and participants ended the day at a traditional German restaurant, which provided an ideal opportunity for further networking.

Sunday, 7th February:

The final day covered a wide range of topics, from sustainability and development to national reforms. The morning panel discussion looked at the major players in global politics and the challenges of interdependence. The final panel discussion of the program, later in the afternoon, provided a fitting conclusion to the event, with ICD Founder and Director, Mark Donfried, moderating an open dialogue between the participants and speakers as they looked to the future of the international economy and the role that global politics and civil society will play in the coming years. The congress ended with a farewell dinner at a traditional Greek restaurant in Charlottenburg, where attendees got a chance to share their experiences and final thoughts with one another.

BIEC Speakers

Gerassimos D. Arsenis
Former Minister of Defense of Greece, Former Minister of Economics and of Education

“The Challenges of National Reforms in the Context of the Economic Crisis”

Bendt Bendtsen
Former Danish Minister of Economic and Business Affairs, Former Deputy Prime Minister of Denmark

“State Aid - No Bridge over Troubled Water”

Niamh Bhreathnach
Former Minister of Education of Ireland

“Challenges for Education and Training in the Global Economy”

Dr. Erhard Busek
Former Vice-Chancellor of Austria, Former Minister of Science and Research, Former Minister for Education & Cultural Affairs

“The Impact of Economic Bridges and Economic Development in Fostering Peace and Stability”

François-Xavier de Donnea
Former Minister of Defense of Belgium, Former Mayor of the City of Brussels

“The Ethics of Aid and Trade and the Efficiency of North-South & South-South Cooperation”

Prof. Dr. Henrik Enderlein
Associate Dean and Professor of Political Economy, Hertie School of Governance

“German, European and Global Governance Models - and Possible Global Responses to the Financial Crisis”

Jan-Erik Enestam
Former Minister of Defense, Former Minister of the Environment of Finland

“Sustainable Development - A Nordic Perspective”

Rainer Eppelmann
Civil Rights Activist, Former Minister for Demobilization and Defense

“Germany’s Unification: Prospects, Problems, and Challenges of the German Unification in Economics and Society 20 Years after the Fall of the Berlin Wall”

Tom Ferris
Senior Economics and Transport Consultant

“The Role of Global Governance Organizations in the Contemporary International Economy”

Heiner Flassbeck
Former State Minister in the German Ministry of Finance, Director - Division on Globalization and Development Strategies UNCTAD, Geneva

“The Future of Economic Globalization: Interdependence, Monetary Systems and the Role of Global Markets”

Dr. Susan George
President of the Board of TNI and Honorary President of ATTAC-France

“Global Governance Priorities in an Interdependent World - Balancing the Economic and the Environmental Crisis”

Prof. Dr. Timo Goeschl
Professor and Chair of Environmental Economics, University of Heidelberg

“Salus ex machina? - The Economics of Green Technologies”

Prof. Dr. Helmut Haussmann
Former German Minister of Economics and Technology

“Moving Germany’s Economy out of Crisis: Medium-Sized Businesses and the Automobile Industry”

Hazel Henderson
Author and World-Renowned Columnist, Futurist, Consultant in SRI and Equitable Sustainable Human Development

“The Evolution of the Global Economy since 1989: Trends and Observations”

Prof. Dr. Géza Jeszenszky
Former Hungarian Foreign Minister, Former Hungarian Ambassador to the United States

“Losing Faith in Capitalism - Hungarian Perspectives”

Dan Jørgensen MEP
MEP for Denmark, Deputy Chairman of the Committee on the Environment, Public Health and Food Safety

“The Politics of Climate Change”

Prof. Dr. Inge Kaul
Former Director of UNDP’s Office of Development Studies, adjunct Professor at the Hertie School of Governance

“Meeting Global Challenges: Trends and Observation”

Prof. Dr. Claudia Kemfert
Head of the Department of Energy, Transportation and Environment at the German Institute for Economic Research in Berlin (DIW)

“Sustainable Energy and Climate Change: Why We Need a Global Governance”

Renate Künast
Former Minister for Food, Agriculture and Consumer Protection of Germany, Co-Leader of the German Green Party

“Green New Deal: For a New Concept of Development”

Davorin Kračun
Former Minister for Economic Relations and Development of Slovenia, Former Foreign Minister, Former Deputy Prime Minister

“Economic Recovery and Diplomacy”

Mart Laar
Former Prime Minister of Estonia

“Economic Issues Related to the Enlargement of the EU”

Dr. Katherine Marshall
Senior Advisor to the World Bank, Visiting Professor Georgetown University
“International Development Challenges for 2010: Where We Have Come, Practical and Ethical Challenges Ahead”

Amb. Dr. Makase Nyaphisi
Ambassador of Lesotho to Germany

“Moving Beyond Copenhagen: International Economics and the Future of International Cooperation on Climate Change”

Kristiina Ojuland
Former Minister of Foreign Affairs of Estonia

“The Economic Crisis from the Perspective of Estonia and the Baltic Sea Region”

Prof. Dr. Dipak R. Pant
Professor of Economics, Head of the Interdisciplinary Unit for Sustainable Economy at Carlo Cattaneo University
“Global Sustainability and ‘Extreme Lands’: Economic Policy and Planning at the Edge of the Anthroposphere”

Dr. Solomon Isaac Passy
Former Foreign Minister of Bulgaria and Former Chairman-in-Office of the OSCE

“Economic Walls in the International Economy”

Niels Helveg Petersen
Former Minister for Economic Affairs of Denmark, Former Minister for Foreign Affairs

“Creating Sustainable Economic and Environmental Strategies: A Danish Perspective in the Context of Europe”

Georgi Pirinski
Deputy Chairperson of the National Assembly and Former Chairman of the National Assembly

“The Crisis, Households - and Equity”

Dr. Jacques F. Poos
Former Deputy Prime Minister of Luxembourg, Former Minister of Finance and Minister of Foreign Affairs

“Global Foreign Policy and International Economics Today: An Unconventional Approach”

Dr. Vasile Puşcaş
Former Minister of European Affairs of Romania

“Managing the Post Crisis Global Economic Interdependence”

Erna Hennicot-Schoepges
Former Minister of Culture and Religious Affairs of Luxembourg
“EU Decision-Making after the Lisbon Treaty: Better for Europe’s Economies?”

Dr. Rupert Scholz
Former Minister of Defense of Germany

“Twenty Years after the German Reunification: New Global Challenges for Europe and the Transatlantic Relationship - Economic Challenges and Consequences”

Prof. Dr. Rick Van der Ploeg
Former State Minister of Education, Culture and Science of Holland; Professor of Economics, Oxford University

“Climate Change, Resource Wars and the Financial Crisis: A Global Perspective”

Prof. Dr. Ludger Volmer
Former State Minister in the German Ministry of Foreign Affairs

“The Ecological New Deal”

Heino von Meyer
Director, OECD Centre Berlin

“The Role of Global Governance Organizations in the Contemporary International Economy“

Dominique Voynet

Former Minister of Planning and Environment of France

“Moving Beyond Copenhagen: International Economics and the Future of International Cooperation on Climate Change”

Prof. Dr. Lufter Xhuveli
Former Albanian Minister of Environment, Forests and Water, Agriculture and Food

“Renewable Energy and the Challenges of its Implementation in Developing Countries”

Introduction to Speeches

With an aim to provide an interdisciplinary analysis of the roles of global politics and civil society in international economics, the BIEC explored the effects of the global financial crisis and reflected on the challenges that lie ahead for international politics and economics. By providing a platform for stakeholders from the public sector, private sector, civil society and academia, the event provided a forum for a diverse range of perspectives and stimulated interdisciplinary debate and discussion on the key issues surrounding the future of the global economy.

The following topics outline the views of the speakers on the relationship between economic interdependence and global peace and stability; the benefits and challenges of corporate social responsibility and socially responsible investment; and the role of cultural diplomacy and soft power policies in strengthening multilateral cooperation in the world economy. The conference also aimed to produce clear policy recommendations to decision makers based on inter-disciplinary approaches and perspectives.

Other issues addressed include the new economic world order and international relations; moving beyond Copenhagen by bridging the gap between international economics and climate change; traditional industries in the information age; and ethics in aid and trade, looking closely at the related incentives and impacts.

4th February 2010

Meeting Global Challenges: Trends and Observations

Prof. Dr. Inge Kaul
  • Studies show that the cost of inaction will be 400 times greater than the cost of taking immediate action on the impending dangers and implications of climate change.
  • Civil society needs to have a louder voice when it comes to formulating international agreements. Today there are forced agreements in international policy, leaving citizens feeling excluded.
  • A new approach to diplomacy is required. In an interdependent world that faces many challenges, we need to achieve results and effective cooperation through ‘win-win’ thinking.
  • A new discipline in the area of global public goods, which cuts across national borders, needs to be taught in the schools of political science.

Twenty Years after the German Reunification: New Global Challenges for Europe and the Transatlantic Relationship - Economic Challenges and Consequences

Dr. Rupert Scholz
  • The United States is the world’s only remaining military superpower; it is, however, unable to play the role of global policeman in new conflict areas. The world is therefore, in some ways, more unstable today than ever before.
  • In order to meet crises in the future there is a global need for new structures, new regulations, and a rethinking of behavior in the economy as well as in financial politics, but the resources and political will to act are lacking.
  • Asia and the Pacific govern the world today with their economic and demographic requirements. There is no longer a hegemony that determines the world order with their traditional structures of national sovereignty and mutual nationally defined interests.
  • Russia cannot become a part of the European Union, and much less a member of NATO, when one considers its size, strength, and connection to Asia. This conclusion can be drawn from both security and economic issues.
  • Europe alone cannot face the competition of the international sphere and nor can the US. Together, however, they can become an anchor of stability and a warrantor of safety for the globalized world. Here, ‘together’ refers to both an international security partnership and economic integration.

Sustainable Energy and Climate Change: Why We Need a Global Governance

Prof. Dr. Claudia Kemfert
  • We have witnessed a massive increase in the demand for energy, especially in developing countries, such as India and China. In order to substitute oil, we need at least thirty to forty years to find new technologies, generate substitutes, and improve energy efficiency.
  • There is not much we can do to alter the current effects of climate change. However after 2050 the effects will be irreversible. We have to find technological solutions in order to reduce emissions, and of course, we have to act now.
  • China is prepared to be the technological leader, but they do not want others monitor their actions; they do not want to be in a G20 position.
  • We should start with the G20 when searching for a solution for carbon emissions. Developing countries also have the right to put forward their requests, and we have the responsibility to do what we can to assist them.

The Ecological New Deal

Prof. Dr. Ludger Volmer
  • Ecological issues are not simply a political problem, but rather a fundamental question of survival on our only planet. Capitalism is not concerned with ecological cost, only financial returns. The benchmark of economic growth for progress and development is incompatible with ecological considerations. Global growth, therefore, cannot be the goal of global economics, because growth maximizes the exploitation of materials.
  • Business strategies are inherently disinclined to pay attention to environmental concerns as the need to be competitive limits the ability to be environmentally conscious. While car manufacturers may now have an interest in developing greener cars, for example, they still need to maximize the number sold. Quality may improve, but quantity will negate the potential environmental gains.
  • Developing countries must be able to solve the immediate issues relating to poverty before dealing with concerns about the future. To create a community of global economic and ecological responsibility, a negotiated balance of interests between North and South, including trade, finance and investment, is needed. This requires a mass consciousness and the social majority to push for political decision-making. The question remains as to whether change in behavior amongst the general public will be a cause or a consequence of ecological policy?
  • A new approach to consumption is needed that identifies excess consumption as anti-social. Downsizing, or the concept of “less is more”, is needed, in order to replace material values with non-material ones. The issue will be whether organizations and institutions which were created in a time of growth and industrialization will have the ability to organize fundamentally different economic reform.
  • A green new deal is needed: It must be funded by redistribution, as growth dividends are not a viable source for the future. Quantitative growth as an end goal measured in GDP is outdated and cannot solve future problems. Governments must work collaboratively toward a satisfactory quality of life for all, while respecting ecological capacities - a new Ecological Social Contract.

Challenges for Education and Training in the Global Economy

Niamh Bhreathnach
  • Western education has changed from being an ‘education of the elite’ to providing access to a large pool of knowledge for all sectors of society.
  • Governments recognize the wisdom of giving all students the capacity to drive economic processes, but the question remains as to whether enough resources are being allocated to education to give students the necessary skills to achieve this.
  • In order to be prepared for global competition in an uncertain world, students need critical thinking skills, the ability to communicate, teamwork skills, and the responsibility of a self-directed learner.
  • Many of the Pacific Rim economies (including Singapore, Taiwan, Malaysia and China) looked at the Western method of education and were able to implement it in a way that specifically looked at training a skilled workforce, focusing on adults rather than children. That which was once a low-skill workforce actually caught up with the Western world once the ruling elite targeted education budgets for the adult population.
  • There are around 600 million girls in the developing world who do not have access to education. Economic investigation has proven that girls who receive an education marry later, have fewer children, and earn an income, 90 per cent of which goes back to their families. Educating women has shown to provide the highest return in development investment.

The Future of Economic Globalization: Interdependence, Monetary Systems and the Role of Global Markets

Heiner Flassbeck
  • The economic crisis continues, and it is therefore difficult to judge how the world will be organized if and when we re-emerge. Its causes are simple to explain: Economists hyped the idea of freeing everything, with the explanation that everyone would benefit from increased capital and trade flows. This led to less investment in the real economy, because the return from the unreal economy was many times greater.
  • Speculation ultimately leads to a herd mentality, reinforcing the prediction of a certain outcome, thus driving the world in one direction and creating the resultant bubbles which led to collapse. Vital staple commodities became financial bubbles at the whim of speculators, threatening the access to food for the poor. In this large scale Ponzi scheme, financial speculators gained, while everyone else lost.
  • With such practices in place, the world's economy operated as a ‘casino’, where the unreal economy created substantial returns without any real net gain and occupied a disproportionate part of the aggregate economy.
  • The global shadow banking system, with its unbridled and unproductive speculation, needs to be tackled at a global level through efforts founded upon cooperation and mutual interest.


Moving Germany’s Economy out of Crisis: Medium-Sized Businesses and the Automobile Industry

Prof. Dr. Helmut Haussmann
  • The automotive industry will become a crucial issue with regard to green initiatives, and will allow German ingenuity to stand at the forefront of smarter and greener car manufacturing.
  • Germany has a strong industrial manufacturing base: It relies less on financial services, such as insurances or investment bankers, and more on the car industry and industries such as machine production, pharmaceutical industrial healthcare, chemistry, and aviation. This industrial production basis is a key issue for modern service industries such as consulting and engineering, and is also the real division between production and the service industry.
  • Eastern Germany has a particularly modern and productive infrastructure and is nationally renowned for leading research institutes and transfer facilities, such as the Max Planck Institute. These institutes are helping the German car industry make the transition from combustion engines to electric propulsion.

The Impact of Economic Bridges and Economic Development in Fostering Peace and Stability

Dr. Erhard Busek
  • The European Union as an agent for stabilization has been a real success story; while NATO also has an influence on peace and stability in Europe and within the EU.
  • The concept of a neighborhood for economic bridges and cultural relationships is an important one. Countries neighboring the western market system after the fall of the Berlin wall were, and still are, the key players. Estonia, for example, followed the methods of its Finnish neighbors.
  • After 1989 small western enterprises became regional players and branched out into former Soviet Europe. Companies such as the Austrian mineral oil authority, OMV, and the Bank of Austria are present in countries such as Hungary, Slovenia, and Slovakia. This ‘branching-out’ is a result of Europeanization and globalization.
  • To jump from a centralized government to a free market economy is impossible. Such was the case for Belarus, the Ukraine, Moldova, and in particular, for Russia. The Harvard-educated elite, including Yeltsin, forced Russia to rashly implement a market economy. A huge political crisis resulted, which ultimately prompted the return to a centralized government.
  • The discrepancy between per capita income in Western and Eastern Europe is a threat to stability.

EU Decision-Making after the Lisbon Treaty: Better For Europe’s Economies?

Erna Hennicot-Schoepges
  • We must act locally, but think globally.
  • The financial crisis would have been much more damaging had the European Union not had the single currency system.
  • The unification of several states is a demanding task, which requires patience. The contrasts between ‘new’ and ‘old’ nations in the EU are difficult to overcome. Efforts for Europe to speak with one voice should not undermine the needs of each individual nation.
  • If the economy is a necessity for our lives, then culture is what makes our lives worth living. As a result of the financial crisis, basic questions are being asked about values, but there is no platform to discuss this at the EU level; it is being left for each member state to discuss internally.
  • Each member of the EU, notably France and Germany, has adopted protectionist policies at the national level. With the recent crisis in the automotive industry, every country has backed their respective automotive industries, in part, due to the fact, that each prime minister strives to be re-elected. The EU needs more authority so that every state will think in broader terms and beyond their individual borders.
  • The EU needs to create a social policy to counter the unemployment that resulted from the current economic situation, which could be implemented in all member states.
  • Economies cannot disregard culture. The well-being and happiness of the European Union’s citizens should be a common concern and objective.

Germany’s Unification: Prospects, Problems, and Challenges of the German Unification in Economics and Society 20 Years after the Fall of the Berlin Wall

Rainer Eppelmann
  • The Berlin Wall did not fall by itself – it was brought down by the enduring resistance of the people against the German Democratic Republic. It was this legion of brave people who faced up to their fears in the autumn of 1989, who brought about the dissolution of the SED regime.
  • The euphoria that stemmed from Berlin’s unification has now subsided and been replaced by the hardships of everyday life: This in turn, has led to resentment between the East and the West.
  • The division of Germany into East and West should not be understated in terms of its effect on the German people. Re-unification forged together two entirely different worlds, which had encouraged and shaped entirely different experiences. Although Germans are further along than might be expected in their post-division learning process, there are still emotional consequences of division which are yet to be overcome.
  • The current economic crisis should be used as an opportunity for East and West Berlin to grow together.

The Role of Cultural Diplomacy in Soft Power Policies in Strengthening Multilateral Cooperation in the Global Economy (Panel Discussion)

Dr. Erhard Busek, Dr. Susan George, Davorin Kračun, Prof. Dr. Inge Kaul, Erna Hennicot-Schoepges, Prof. Dr. Lufter Xhuveli
  • It is not only necessary to learn about other cultures, one must also learn and understand one’s own culture. Economics can be a catalyst for cultural exchange, especially when one looks at regional development.
  • Politicians, educators and the media in Europe must be persuaded that placing blame on each other is unproductive. Instead, the focus needs to be on creating a common European identity.
  • It is essential to take into account the values and perspectives of other countries, as well as the importance of listening. Europeans need to look beyond their own nations, and beyond Europe. Tolerance is no longer enough; acceptance must also be taught.
  • Interdependence is an increasingly important trend, and there is a need to develop mutual trust and the consciousness that we all belong to the same world, despite different nationalities. Cooperation and trust are the only means to solve the problems stemming from the recent economic crisis, and to prevent further depression in today’s world.
  • Countries should promote their own culture abroad. Every country celebrates its own culture so that all can participate and share; a celebration of differences can lead to acceptance of others.
  • In economics, when one talks about protection he closes himself off from the other; with culture, one opens himself up for cooperation and promotion among other cultures.
  • A key consideration in aspiring to reach greater cultural acceptance is education. Cultural education should begin from a very young age, among children of many different nationalities.

5 February 2010

Economic Recovery and Diplomacy

Davorin Kračun
  • The economic crisis shook the world’s confidence in the Washington Consensus - the neoliberal, free market approach of deregulation, liberalization, and privatization. We now have a synthesis of the approaches of Friedman and Keynes.
  • To deal with this crisis, global coordination is needed to build a new system for global regulation of the financial markets.
  • Diplomacy must communicate the solutions and enable governments to act in accordance with mutual interests in an interdependent world.
  • Understanding and mutual trust among international actors in developing a global economic order will enable recovery from this crisis and prevent future possibilities of recurrence.
  • The relative power of governments is waning. Non-state actors need to be incorporated in order to spread the load of international communications and negotiations for new strategies of economic development.

Global Governance Priorities in an Interdependent World - Balancing the Economic and the Environmental Crisis

Dr. Susan George
  • The current situation is not a standalone crisis, but yet another upheaval in a series resulting from chronic inadequacies of the global system of governance. Wherever there is an opportunity for a bubble, one will be created.
  • The current form of global governance is inadequate. The world financial system no longer serves the real economy, only itself.
  • The environment remains the least significant factor on the world stage. Civil society groups consider this hierarchy to be inverted; because the environment is the real constraint on human economic activity. Finance is merely a tool among many instruments.
  • Among the measures that can be taken to rectify the current crisis, banks need to service the real economy, especially small and medium sized enterprises. Highly indebted developing countries should have their debt cancelled in return for reforestation. A Tobin tax could mine the massive financial transfers and use the funds to relieve poverty and help transfer green technology.
  • Civil societies have ideas for a new world order, but they need to be heeded over the traditional economic single-mindedness. This is not a technical problem, as the solutions are known, but rather a political and ideological issue.

German, European and Global Governance Models - and Possible Global Responses to the Financial Crisis

Prof. Dr. Henrik Enderlein
  • The root cause of the global economic crisis is the imbalance in the financial markets. The real opportunity of the crisis will have been missed if these issues are not rectified in the next one to three years.
  • The International Monetary Fund is not the institution that will repair the financial global landscape. It is a useful think tank, but should not play the role of a global financial watchdog. Instead, an independent secretariat on international financial and monetary matters is needed.
  • Financial reform is not useful at the national level, nor can much be expected on the global level. Agreement will need to be reached at the regional level, such as that which has been achieved in the EU.
  • The German economic model is no longer working: The increasing export reliance is hurting wages and killing domestic demand. The country needs to shift to a knowledge-based economy. 

Economic Issues Related to the Enlargement of the EU

Mart Laar
  • Does reform cost too much socially and economically? Looking at real figures, market-orientated and shock therapy reforms were the answer to the collapse of the Soviet Union. Reform is needed for the progression and revitalization of market economies.
  • Rule of law regulates a market. There would not be a market economy without rule of law or strong institutions, and investment is necessary in both areas, without which nothing can progress.
  • When focusing on economic reform, social reforms are overlooked and the growth of inequality, poverty, and lack of social protection becomes noticeable. Governments need to balance the needs of their countries and civil society in relation to the market economy.
  • Corrupt governments have no need for principles and no use for democracy. A government that thinks it can run the state with outdated policies and procedures will eventually fail.

The Economic Crisis from the Perspective of Estonia and the Baltic Sea Region

Kristiina Ojuland
  • Estonia, like many Baltic nations, has been experiencing a very high current account deficit, worsened by a heightened purchase pattern of imported goods into the country. With the reinforcement of export efforts and the free market system, however, things are beginning to look more optimistic.
  • Recently, there have been drastic changes in the local labor market. Unemployment may continue to rise this year, but the positive effect of the financial crisis has been that labor costs have diminished. Estonia also introduced a new labor law last year, which gives both employers and employees more flexibility, in the hope that this will positively affect the unemployment situation in the long term.
  • Estonia’s low public debt and fiscal deficit fare well for the country in view of the difficult fiscal situations in neighboring Baltic nations. To achieve this, the state reduced public sector salaries by 20 percent in two years and froze pensions, rather than reducing them, as was the case in Latvia.
  • Foreign and national investment in Estonia is bleak as a result of uncertainty and lack of confidence in the market. There is optimism, however, that the country’s commitment to joining the euro zone will rectify this situation and make Estonia more attractive to investors.

State Aid - No Bridge over Troubled Water

Bendt Bendtsen
  • China is not just a bystander, but rather a driving force in the new era of globalization, which directly affects the current political situation. Political actors need to think differently from how they previously thought and act accordingly.
  • Protectionist policies were executed to counteract the financial crisis, but as soon as a government supports an ineffective national industry this protectionism damages the country’s chance at development in that area.
  • State aid schemes, aimed at saving jobs in industries which are unstable or failing, are a drain on funds. Protectionist measures are not part of a coherent policy mix for economic recovery, and the opposite is necessary to maximize returns.
  • In order for Europe to add value to their products and stay competitive, more funds need to be allocated to education, research, and development: Europe needs to be the leader in a knowledge-based economy.

Green New Deal: For a New Concept of Development

Renate Künast
  • There is a need for rules that drive competition and innovation on a national and international level. To make the cycle of competition possible, research – particularly pertaining to small businesses – needs support. Heavy investment in small businesses can be used to tap into potential intellectual resources, while in turn creating jobs in this sector.
  • Environmentally friendly initiatives can be utilized to establish a green policy that focuses on Germany’s green potential and industrial background. Existing blue-collar workers need to be transformed into green-collar workers. This change can be brought about through the creation of a ‘blue-green alliance’.
  • Prosperity and growth need to be redefined and GDP should no longer be the critical indicator for economic thinking worldwide. What is needed is a new system of calculation that takes into account all factors involved, such as quality of development, system of education, and social cohesion.
  • A Green New Deal is required which focuses on quality in growth, not only to solve problems in the short-term, but also to find long-term solutions. The new deal needs to set new priorities to put an end to excessive styles of living, economic development at the expense of climate protection, and short-sighted, unregulated, globalised economics based on financial sector dominance.
  • The world is currently experiencing many crises; the financial crisis, the economic crisis, the climate crisis, and the food crisis. There is need for a strategy which tackles all of the different global crises together, not one which plays them off against each other.

The Ethics of Aid and Trade and the Efficiency of North-South & South-South Cooperation

François-Xavier de Donnea
  • Aid inefficiency is intimately linked with the lack of effective democratic institutions in the majority of beneficiary countries. Poor governance and the deficit of democratic ownership of national strategies are two traits that often reinforce one another.
  • When the middle class expands in China they will have to turn to a more democratic system of governance. China’s history has allowed it to develop without democratic governance and without proper democratic institutions. China must be seen as the exception, however, rather than the rule.
  • Countries who have not met the Millennium Development Goals have failed, in part, because they lack the vital democratic institutions.

Sustainability and Leadership

Dr. Volker Hauff
  • It may not be clear to everyone, but climate change and the financial crisis are closely connected. It is, therefore, not possible to solve one without taking the other into serious consideration.
  • Both crises are the result of a dramatic lack of sustainable development; both are the result of the dominance of short-term orientation. It is necessary to rethink the role of the economy for society. Indeed, we have to re-define our understanding of wealth and how it is generated.
  • In order to fight climate change, industrialized countries need to reduce their carbon emissions by 90 percent within the next 30 to 40 years.
  • Politics needs better leadership, more visibility, more effectiveness, and more action.
  • Sustainability strategies are an important instrument in developing new styles of policy-making and thinking. There are four points which lie at the heart of sustainable development strategies.
    • The first is very simple - quantitative indicators are needed as a means of orientation and of questioning whether or not progress has gone in the desired direction.
    • Measures and instruments are needed to determine further actions.
    • Socially agreed targets and reference values are needed to show the channeled direction of development that should be followed.
    • Last but not least, an ethical concept is necessary to guide this decision-making in the face of inevitable conflicts of interests.

Creating Sustainable Economic and Environmental Strategies: A Danish Perspective in the Context of Europe

Niels Helveg Petersen
  • It is important that nations integrate the notion of sustainability into their economic and environmental actions. There is brutal evidence today of the problems faced in maintaining economic sustainability. Greece, for example, is struggling to come to grips with decades of inefficiency and complacency and to build a sustainable Greek economy on this foundation is not an easy task. Spain, Portugal, and Ireland are also struggling to deal with the consequences of excessive debt, such as unemployment.
  • Decision-makers are left in post crises situations with very few pleasant options or solutions. Institutions at global and regional levels need to be re-evaluated and strengthened in order to deal with the current crisis. A strong global voice is required to battle the crisis, but what is needed and what can actually be achieved do not always correlate.
  • The Copenhagen Summit produced no viable solutions and illustrated how difficult it is to establish meaningful compromises on climate change at the global level. Waiting for global solutions is not a practical approach any longer – wise governments will not wait for new decisions from the next conference in Mexico, but will instead go ahead with sustainable environmental development and the promotion of green growth. The governments that do this will emerge in the best shape.
  • The arctic area is attracting a lot of attention and with all the ‘big players’ interested, and very much present, national security could be at risk: A framework is required to regulate the exploitation of minerals in this region.
  • Incentives need to be provided for industry, agriculture, public buildings, transportation, and private households to insulate their homes to a more effective degree. This will result in increased energy efficiency and employment. Such energy conservation policies are based on political consensus; however, they can have both positive and negative consequences.

The Role of Global Governance Organizations in the Contemporary International Economy (Panel Discussion)

Thomas Ferris, Dr. Susan George, Prof. Dr. Dipak R. Pant, Dr. Solomon Isaac Passy, Dr. Vasile Puşcaş, Heino von Meyer
  • Globalization may give rights to all global actors, but those actors must agree on common goals regarding how to design global systems, as well as ways in which to achieve their objectives. We need to vote for a system that can contribute to governance, and the EU can make that contribution.
  • Climate change is real and manmade. It has serious consequences for many who were not even responsible for it. An international agreement is needed on how to combat the issue.
  • It is wrong to focus only on discussing institutions and structures; global governance is much more than that. What matters most is how it operates and the methods in which we shape globalization. The time of the NGOs is upon us; they are setting new standards for the global economy. It is in this area in which we have found intelligent and innovative ways to involve civil society organizations.
  • NATO is the surprise rising star for globalization in the 21st century. It is the fastest growing organization and will remain so into the future. NATO will increasingly become a subcontractor of the United Nations, for everything that concerns global security.
  • We need global governance - a better world initiative. Let us think about the outcome of the new system, a post-crisis international system, which has to be meticulously planned and organized, as well as able to manage the global challenges that lie ahead. We need commitment and dependability from member states, as well as resources. Let us talk not only of soft and hard power, but also of smart global strategies and smart global management.
  • Global governance should include empowerment at the local level within a global framework. This global framework is different to a global government, and would allow the integration of grassroots activity into a larger process that would help to channel its progress.
  • When we talk about globalization we tend to focus on trade relations, but what shapes globalization more deeply is investment. The dramatic focus on foreign investment streams is something we have to come to grips with. This is an area in which we are ill-prepared. We need to find better multilateral trade agreements, because the bilateral agreements reflect the power relations in scope much more effectively than a multilateral agreement would.

6 February 2010

Salus ex machina? - The Economics of Green Technologies

Prof. Dr. Timo Goeschl
  • Continued growth with reduced pollution requires reduced emissions per unit. This change could come from changing what we do or how we do it, and is a question of technology.
  • Solving the dilemma between continued economic growth and pollution through innovation can be problematic. The fundamental driver of innovation is knowledge, but knowledge is considered to be a ‘non-rival good’. Everyone should have free access to available knowledge, which in turn saps innovators’ motivation to develop the expertise crucial to innovation.
  • Two principle archaic contenders exist in the arena of creating innovation: Patents and Manhattan projects. Patents can spur innovation through temporary legal custody of certain knowledge. The main drawbacks of patents are diffusion penalties. Manhattan projects refer to complete technological breakthroughs of large governmental programs. The government, however, is not always best-equipped to know exactly what breakthroughs are needed. Developing green technology today, therefore, requires new and creative ways of thinking.    

The Politics of Climate Change

Dan Jørgensen
  • The world does not have the luxury of time – it cannot wait any longer to take action on climate change. There is no argument on whether the greenhouse effect actually exists; if it didn’t, the earth’s temperature would be -17 degrees Celsius. The greenhouse effect itself is not such a problem, because it is part of the natural and biological system of the planet that controls the climate. The problem is that we have increased the level of CO2 in our atmosphere to the point of overheating.
  • The richest countries in the world need to invest 0.5 per cent of their GDP into tackling the issue of climate change every year. With an average growth rate of around 1.5 per cent the investment will not lower living standards – it will simply imply that countries will get richer at a slightly slower rate. The cost of complacency now may lead to a situation where nations are forced into spending around 20 per cent of their GDP to solve this problem in the future.
  • The International Panel on Climate Change stated in their last report, which is already outdated, that they can conclude with 90 per cent certainty that global warming is taking place as a result of human activity. Today, the degree of certainty has probably risen to around 98 per cent.
  • Developing countries need to be a part of the solution. The biggest emitters and polluters in the world right now are China, the USA, and the EU; these players need to take the lead in displaying initiative in establishing a more active stance.
  • Emissions in the richest countries need to be reduced by between 25 and 40 per cent; in 2050 emissions need to have been reduced by 80 to 90 per cent. These targets are aimed at developed countries and do not include China. Everyone is aware that China is experiencing rapid growth and cannot be forced to slow down. Instead of getting them to decrease emissions, they need to decide when to peak in their emissions; which should be at some point between 2015 and 2020.

Sustainable Development - A Nordic Perspective

Jan-Erik Enestam
  • Sustainable development has three independent dimensions: economic, social, and ecological. None of these dimensions should be allowed to undermine the others. Economic growth, good public health, and a safe and robust environment are factors that are mutually dependant on each other and are thus preconditions for sustainable development.
  • Economic growth is important for sustainable development, because the resources it generates can be invested in social development and in implementing measures to improve the environment.
  • As far as international competition is concerned, all Nordic countries are ranked in the top ten. Likewise, all Nordic countries rank in the top ten on the global creativity index. When the focus is on technological development, Nordic countries perform exceptionally well, with four out of five Nordic nations in the top ten. Norway is the odd one out, but its oil and gas reserves are ample compensation.
  • Education and training are the pillars of Nordic success, with research and development following in close succession.
  • While a great challenge, greater energy efficiency initiatives hold the most potential for reducing global warming. They also represent the cheapest and least controversial method of achieving meaningful results.

Moving Beyond Copenhagen: International Economics and the Future of International Cooperation on Climate Change (Panel Discussion)

Jan-Erik Enestam, Dan Jørgensen, Dr. Makase Nyaphisi, Prof. Dr. Rick van der Ploeg, Dominique Voynet, Prof. Dr. Lufter Xhuveli
  • Climate change discussion needs to remain on the international agenda. The key players in the international community should try to reach a political solution for the next conference in Mexico, and the European Union should serve as a moderator for an agreement between the United States and China. If the US and China deliver on climate change, India and the rest of the world will follow.  
  • The major challenge in the area of climate change now lies in economics and finance. Governments need to find new ways of generating revenue to finance climate change initiatives. The funds for climate change cannot be taken from current projects; they must be acquired through new methods.  
  • Expectations for Copenhagen were far too high. Everyone wanted to believe that an agreement could be reached, but 190 countries trying to compromise a deal in two weeks is nearly impossible. It would have been wiser to play down expectations to in order to attain better results. With regard to Copenhagen, politicians spoke much, but accomplished little. The need now is for a fair, binding agreement with ambitious targets for Mexico.
  • A global emissions trading system, or at least differing international systems which can be linked together, must be established to regulate global carbon emissions. This system will prevent polluting industries from changing location to avoid compensation for their carbon emissions, and will curb the need for carbon leakage sector adaptations.
  • There is great need to institute a carbon tax, which would encourage companies to adapt new technologies as a means of decreasing their CO2 emissions. This system is one in which the market will be left to solve the climate crisis through a price mechanism. It can also be coupled with the emissions trading system.   
  • Developing countries need to establish proper living standards before they can become involved in the climate change situation. As prosperity increases in these nations, more funding can be made available for research on climate change. If these nations are to reach a point at which reforms can be made, Western nations should provide financial assistance in order to support their adaptation capabilities.
  • The Chinese have already begun to invest in green technologies and have a great interest in fixing their climate issues. China must, however, continue to implement such innovations in order to reduce the pollution, which is increasingly affecting its own citizens.
  • The world needs to act and invest now in order to save money in the future. The longer we wait, the higher the price of climate control will become. Currently, 0.5 per cent of global GDP is needed to combat the crisis. This is an acceptable and achievable amount, and one which encourages immediate action.
  • The EU needs to set higher standards for itself in terms of climate control. It should not wait for the other nations of the world to comply with all regulations. By aspiring to superior technological innovations, a brighter future will be constructed for all EU citizens. Although the European Union is striving ahead, it remains unclear as to whether the extent of developments should be unconditional, or if an unconditional restriction on European industry would merely be detrimental to the economy.

The Crisis, Households - and Equity

Georgi Pirinski
  • The deepening of the global crisis led to increasingly numerous and categorical statements. These included, for example, the assertion that neo-liberal orthodoxy has failed as a policy model both for the developed and the developing world. Most conversation is related to reform policies.
  • The EU is now putting the practices of the Lisbon treaty in order, dealing with global governance challenges, and taking into account the reorganization of large international financial bodies.
  • There is a loss of faith in the Washington consensus and the question now is not whether the consensus is dead or alive, but rather what will replace it?
  • Financial regulation has been a subtle motif for Western capitalism over the last 20 years. Until recently, the approach was to simply break down any barriers between banks and other financial institutions and to grant markets leeway and their own equilibrium, both in domestic and international money markets.
  • The causes of the market failures need to be looked at in more detail. Was it simply a matter of overestimating growth at the expense of other lesser objectives, or was it rather the result of deep-seated greed and the purposeful ignorance of the facts clearly showing that the trend could not continue in the same way?

Losing Faith in Capitalism - Hungarian Perspectives

Prof. Dr. Géza Jeszenszky
  • After 1990, privatization was the new agenda and it quickly became essential. Communism confiscated property, but with the return to capitalism and a market economy, ownership had to be re-clarified. In some countries re-privatization took place: In the Czech Republic, for example, factories were returned to their post Cold War owners. In other states people were simply compensated for their losses.
  • It is easy to turn state assets into private assets and then sell them on to either the highest bidder or western companies, but there was not much enthusiasm from the west to buy eastern companies which were neither competitive nor modern.
  • Very little was available under communism, but that which was available was affordable. After the fall, everything became available but very little was affordable. Some people became conspicuously rich, while others lost their once secure jobs. The result of capitalism was, therefore, greater social inequality.
  • During the final few years, capitalism in Hungary was no longer viable as it was conducted by people claiming to be supporters of the free market economy. Hence, civil society began to blame their leaders, the very system of capitalism, and in turn, globalization.

Climate Change, Resource Wars and the Financial Crisis: A Global Perspective

Prof. Dr. Rick Van der Ploeg
  • The West needs to rethink development aid and foreign direct investment strategies. We must provide developing countries with projects that have long-term growth and job opportunity prospects in order to attract young people away from radical militant organizations. The West needs to stop handing developing countries money with strings attached and instead execute development projects themselves using local labor, materials, and expertise.
  • Europe is, in a sense, a retiring continent. It has been made almost irrelevant by the dynamic growth and international development activity of Asia, China in particular. Most of today's pressing global issues will be solved by cooperation between American and Chinese leaders.
  • The biggest failure of the international capitalist system is the fact that capital flows are not flowing in a traditional direction, i.e. from rich countries to poor countries.
  • Moral capitalism is an oxymoron, but it is the mode of thinking that the international economic community must adopt in the coming decades.

Learning from the Global Financial Crisis: Causes, Impact, and the Challenges Ahead (Panel Discussion)

Gerassimos D. Arsenis, Davorin Kračun, Mart Laar, Prof. Dr. Dipak R. Pant, Georgi Pirinski, Dr. Jacques F. Poos, Prof. Dr. Rick Van der Ploeg
  • A regulatory system which fits the context of the modern world is essential. This regulatory system cannot be national, it must be global. The global institutional structure is currently too weak and if it is not strengthened soon there remains a very real possibility of reverting back to ‘business as usual’.   
  • The movement toward a global governance model has been slow, but it is taking place. This can be seen with the expansion of the G8 to the G20. In many cases, however, this shift merely slows down the governmental process and increases the difficulties of handling serious business.
  • Europe has a monetary, not a fiscal, confederation. A fiscal confederation is not permitted by the Maastricht Treaty, which prevents bailouts. Europe therefore needs to work towards the completion of the monetary union in order to institute better financial supervision and incorporate a ‘lender of last resort’ into the European Union. Until this takes place, Europe is not in a position to collectively face international financial concerns.
  • Rating agencies are one of the major causes of the financial crisis, as they were negligent of the seriousness of their ratings; rating agencies must be regulated and supervised to ensure that are more effective in the future.
  • Crises will always come and go. What nations need to focus on is not preventing crises, but rather using the years that are void of crisis to stabilize, thus making future crises more manageable and less frequent.
  • The financial crisis was caused in part by the emergence of greed as a driving factor of the market economy, when the economy should to be driven by trust. Money cannot be seen as the most important component of society. There is a need for cultural change to re-establish an ethical basis in the economy, promote a movement back to traditional functions, and encourage movement away from phenomena such as shadow banking.
  • A reduction in the risk appetite of bankers is essential and can be produced through reducing leverage and raising the capital ratio of the banks, as outlined in the Basel 2 Accord. These changes could be supervised by the European Central Bank and would impose proper risk and liquidity management on every bank. 
  • The overall awareness established by this crisis is that the economic system needs financial regulation and political balance. This equilibrium can be achieved by balancing market incentives with equity considerations. If the market expands freely, there will be huge divergences in income, as consumers and investors gain from freely expanding capitalism, while average citizens lose out.
  • Banks cannot be permitted to grow so large that they are ‘too big to fail’. It is better to have five or six smaller banks, which must remain competitive, than to have one that need not worry about competition.  
  • Governments should always take care of the small savers of their nation. In doing this, however, they must be careful not to overstimulate the banks, which would lead to a deeper crisis. Trust in the banks is one of the most important elements of a successful economic system.

7 February 2010

Global Sustainability and ‘Extreme Lands’: Economic Policy and Planning at the Edge of the Anthroposphere 

Prof. Dr. Dipak R. Pant
  • Sustainability is not natural; there must be a conscious effort made in order to establish sustainable living. A sustainable lifestyle does not need to be perfect, as it is merely an attempt to avoid the disruption of an existing system, whether it be banking, farming, or some other form.
  • Political, business, and cultural leadership is needed to enact values in society. The establishment of values creates a fair, secure, and healthy environment in which the economy can flourish.  
  • In order to establish a sustainable society the Western world needs to rethink its social model. There must be a focus on well-being instead of well-having, and well-dying rather than well-aging. These concepts foster a social setting in which sustainable living has the opportunity to develop.  
  • The Western economic approach of geopolitics has transformed into geo-economics, where resources are brought to the urban “rim land” from the outlying “hinterland” solely through economic means. This process, however, is not currently sustainable.
  • A human vulnerability assessment score must be produced that evaluates which geological areas are performing better and where people are living better.  

Managing the Post Crisis Global Economic Interdependence

Dr. Vasile Puşcaş
  • The crisis which we are now facing is not only economic and financial, but also political and social.
  • When we look at managing international financial systems, scholars have been excluded from the creation of this management methodology. Corporate managers have been looked to for answers, but this only led to the current financial crisis. We therefore need a systematic, multi-dimensional approach to global management.
  • The world order needs to return to multilateralism; there is a need to think globally and strategically and to include both state and non-state actors.
  • Regional policy-making and organization will be an important tool in global management, thus making the solution of global problems at the regional level more realistic.
  • Politicians are not qualified for managing global interdependence, and corporate managers have led us to global mismanagement. We need to train people in economic policy, in both global institutions and national institutions, to deal with new forms of management.

The Challenges of National Reforms in the Context of the Economic Crisis

Gerassimos D. Arsenis
  • We must accept that the international system has been derailed and that in order to put it back on track, a call for policy action at the global and national levels is needed. We live in an open and interdependent world, and we need to fix the crisis at a global level.
  • There has been a habit, in recent years, for the global system to pass international problems on to national governments, who in turn pass these problems on to the will of market forces. With the emergence of the financial crisis, it has been acknowledged that the markets are not self-regulating and that a regulatory system must be established in order to keep control.
  • In order to bring about systemic change on the international level, the confluence of five factors is required: A favorable external environment; strong and charismatic political leadership; strong cohesive forces in support of the reform agent; the absence of an organized minority group to advance veto wielding opposition; and determination in the pursuit of reform objectives and consistency.
  • Reform does not need to be the outcome of a consensus process. In moments of crisis there is no need to maintain an equal balance between groups. Social groups must transcend their narrow interests and support a broad new vision and a new position, even if their interests are not served in the short term.
  • It is difficult to be optimistic that systemic reforms can be successful in the current climate. It is not impossible, but it will be very difficult to achieve success. The current external environment is unfavorable; there is no charismatic political leadership, and veto players have the power to block changes in society.
  • Due to unfavorable international conditions, the European Union needs to implement regional solutions. There is a need to consider altering the architecture of the European Union: The European Monetary Union should establish institution to serve as ‘a lender of last resort’

The New Economic World Order: The Rise of New Major Players in Global Politics and the Challenge of Interdependence (Panel Discussion)

Gerassimos D. Arsenis, Mart Laar, Prof. Dr. Dipak R. Pant, Dr. Solomon Isaac Passy, Dr. Jacques F. Poos, Dr. Vasile Puşcaş
  • The past 50 years have seen the globe dominated by a Western club of nations. The economic crisis has helped to create a multi-polar world made up of both Western and Eastern countries. The question remains as to whether or not the institutional framework is in place to handle the development of a multi-polar world – a world with many differing and dominant cultures.
  • The West does not fully understand China. If the West attempts to pressure China towards democracy it could prove counterproductive. China has to make its own strides towards democracy. What the West can do to facilitate a democratic China, however, is maintain a constant dialogue and cultural engagement with the Chinese.       
  • Russia will be in a unique position by virtue of its geographical location to act as a moderator between China and the West. Whether or not Russia, acting as a moderator, will be beneficial to global relations is debatable. If Russia does not modernize itself socially, economically, and institutionally within the next decade, however, it will greatly reduce its capacity to act as an East/West moderator.
  • It is clear that China wants direct talks with Europe and it is likely that China would not accept Russia as a middleman. China sees Europe as one of the poles in a multi-polar world and seeks direct relations as an alternative to further dependence on America.
  • In order for Europe to establish itself as a pillar in a multi-polar world it must strike a delicate balance in both economic and cultural relations. Even more important for Europe’s future global presence is vision and leadership, and as of right now it has neither.

Global Foreign Policy and International Economics Today: An Unconventional Approach

Dr. Jacques F. Poos
  • Not every member country of the UN can be ruled by democratic standards; reform and regime change is generally something that can only be handled on a local scale.
  • Violence is often used to suppress populous uprisings against corruption in repressive regimes; this can have the adverse effect of further fueling the popular frustration. Should an outside entity, however, attempt to intervene in the process, it could also prove detrimental, as the people may rally behind their leaders and the reform would be halted.
  • In Iran, intellectual circles, students, and merchants typically try to reform the system from within, but are frequently hindered while facing severe oppression from the clerical establishment. Standard democratic liberties, such as human rights, freedom of press, and gender equality, could soon cease to exist, and quite possibly even become extinct within the next generation.

Renewable Energy and the Challenges of its Implementation in Developing Countries

Prof. Dr. Lufter Xhuveli
  • Civil society has seen a shift in the way the topic of climate change is approached – discussions about climate change have moved from scientific meetings to everyday talk. There is, however, no correlation to the quantity of greenhouse gasses emitted by a state and the consequences it will suffer from climate change. Developed countries are the biggest contributors to greenhouse gasses, yet developing countries are the worst hit by the phenomenon.
  • Developing countries such as India and China are playing increasingly important roles in the manufacturing and installation of viable and renewable energy. Developing countries should establish economical, fiscal, and financial policies to stimulate renewable energy usage and undertake structural reforms to facilitate implementation of established policies.
  • The dilemma of how best to divide the budget is ongoing for developed and developing countries – such as how much to put aside for social policies, how to invest, and how to provide for and contribute to developing countries.

Economic Walls in the International Economy

Dr. Solomon Isaac Passy
  • Walls are erected by societies that believe they have a higher quality of life than the rest of the world.  The purpose of these walls is to protect an individual society and its practices from outside invasion.  Examples of these walls can be seen today in the Security Council of the United Nations and the Schengen Area of the European Union. To make such global walls obsolete, quality of life must be internationally standardized.
  • Optimization theory should be the basis for government policy. Governments need to move away from solving problems based on instinct rather than using proper formulas.
  • A sustainable increase in quality of life could only be achieved by eliminating elections from the democratic process.
  • Imagine a world where there is a simulator for government, in the form of a strategy game, through which candidates for the position of Head of State are required to prove themselves. Whoever runs the simulator best is given a term in office. This enhances a state’s democratic processes, as everyone is given an equal opportunity to run the government.

International Development Challenges for 2010: Where We Have Come, Practical and Ethical Challenges Ahead

Dr. Katherine Marshall
  • We no longer live in a world of walls; everything and everyone is interconnected. Significant dialogue is required to overcome the difficulties of creating a more equitable world.
  • The field of development is extremely complex and dynamic. The flow of funds has shifted from governments to private and civil society groups, with a sharper focus on results, monitoring, and evaluation.
  • The problem of aid coordination is that thousands of aid groups add up to less than their whole; multiple procurement, auditing, and reporting systems are wasteful and need to be better coordinated.
  • No amount of work on the community level can succeed in a failed policy environment. Both project and policy approaches must work together.
  • For the first time in history, we have the opportunity to offer every human being a decent life. It has only to be realized.

The Roles of Global Politics, and Civil Society International Economics (Panel Discussion)

Gerassimos D. Arsenis, Dr. Katherine Marshall, Dr. Solomon Isaac Passy, Prof. Dr. Lufter Xhuveli
  • Collective action at the international level is almost the same story as collective action at the national level. States realize that they will be better off the in long run if they cooperate amongst themselves. A ‘give and take’ mentality, however, is needed to develop such a collective system.
  • The European Union is an example of collective cooperation, since not all of its decisions are to the liking of all member states, but rather reflect a compromise. Some sovereign rights need to be sacrificied for the collective good.
  • Historically, international cooperation and systems emerge after a crisis. At this point, it is already too late. Thus, international schemes and structures are called for which envisage future problems and opportunities. Issues such as climate change are urgent, but the movement of national governments is too slow.
  • The ability to work collectively on issues such as financial regulation will be one challenge, with the environment being another. Thus, the machinery of global governance is not necessarily the right way to go. Rather, appropriate mechanisms that address each problem will be needed; a solution that involves technical expertise and a form of political involvement, and that brings together the private sector and civil society in a creative way are needed.
  • Working on a case-by-case basis does not always work, as was illustrated by the recent financial crisis. The principle of interdependence is therefore of utmost importance and cannot be ignored.
  • The internet poses a good model of the complex international dynamics that exist within the global financial crisis. The laws that apply to internet users in one country are different to those in another; in the same way, each nation functions on the premise of protecting its sovereign laws at international discussions and forums. A common code of conduct is, therefore, required at an international level for all such issues.
  • Not all local problems have local solutions – some need global initiatives.


Following the successful conclusion of the Berlin International Economics Congress, and having reflected on the diverse perspectives offered by the speakers, the Institute for Cultural Diplomacy has derived the following conclusions and policy recommendations:

  • The global economic crisis shook three decades of neoliberal dominance of economic philosophy. New directions in economic thought are required to reconcile neo-liberalism with the Keynesian monetary measures so widely used to combat the crisis. A cultural movement towards moral economic thinking must be made if a greed-induced crisis is to be avoided in the future: We must redefine the concept of “wealth” and the means by which it is accumulated.
  • Existing, formal global governance institutions must be reconciled with the informal Group of Twenty that has taken prominence following the financial crisis. This integration provides an opportunity for the policies of the G20 to become integrated with the regulatory potential of existing international bodies. In time, developing nations should be given a greater voice in the establishment of policy, in order to make this development not only effective, but also fair.
  • Programs such as the ‘Clean Development Projects’ of the European Union need to be expanded upon. The benefits that can stem from the North-South transfer of green technology and information are twofold. The global North can be provided with a large market to which it can export its green technologies, while simultaneously improving the energy resources and sustainability of the South.  This transfer of technology should be supplemented by international and regional efforts to establish uniform carbon prices, taxes and regulations.    
  • A focus on education, research, and the development of green technologies will transform modern industry, improve world living standards and combat climate change.  Progressive training has the ability to change current blue-collar workers into green-collar workers, while research and innovation can provide significant efficiency gains.  Investment in education for future generations will keep industries competitive and effective through awareness of the importance of sustainable living. 
  • Humanity must become linked on an intellectual and cultural level, through the implementation of scholastic exchange programs, the promotion of international art and music festivals, the utilization of networking initiatives and the development and reinforcement of mutual trust. The most important aspect of this process, however, is that this understanding be brought to all levels of society in all parts of the world. The development of a global identity will set in motion demands for both political and economic reforms from the grassroots level, which can be structured and supported by non-governmental organizations and other civic-minded groups around the globe.
The Institute of Cultural Diplomacy would like to extend its deepest gratitude to all participants and speakers that made this event possible.